January 31, 2006, 12:00 AM

RFID starts to show real results, Wal-Mart says

With five Dallas-area distribution centers, nearly 500 Wal-Mart and Sam’s Club stores, and 140 suppliers equipped to handle RFID-tagged shipments as of last October, Wal-Mart reduced by 16% its number of product out-of-stocks on store shelves during a 29-week period last year.

RFID-a web-based system of tracking inventory throughout the supply chain-is starting to show some real results, says one of the technology’s biggest promoters, Wal-Mart Stores Inc.

With five Dallas-area distribution centers, nearly 500 Wal-Mart and Sam’s Club stores, and 140 suppliers equipped to handle RFID-tagged shipments as of last October, the retailer reduced by 16% its number of product out-of-stocks on store shelves during a 29-week period last year, according to a study conducted for Wal-Mart by the University of Arkansas. “No question, this has positively impacted sales,” a Wal-Mart spokesman says.

The process of ordering and receiving RFID-tagged shipments is three times faster than for non-tagged shipments, and RFID has helped to eliminate excess store inventory due to unnecessary replenishment by suppliers, Wal-Mart says.

As RFID tags move toward a sub-10-cent price this year, the RFID project will expand more quickly, Wal-Mart says. It expects to have more than 300 suppliers live with RFID this month and more than 1,000 Wal-Mart and Sam’s Club locations live by year-end.

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