September 13, 2006, 12:00 AM

Wal-Mart gets more bullish on RFID technology

Continuing its leading position as a user and promoter of RFID technology to better manage inventory, Wal-Mart will expand its RFID system by doubling its number of stores and suppliers participating in the program by early next year, it said today.

Continuing its leading position as a user and promoter of RFID technology to streamline supply chains and better manage inventory, Wal-Mart Stores Inc. will expand its RFID system by doubling both its number of stores and number of suppliers participating in the program by early next, it said today. The retailer expects to have 1,000 stores, or more than 25% of its total of 3,900 retail locations, participating in RFID by the Jan. 31, 2007, end of its current fiscal year, while bringing another 300 suppliers into the system, for a total of 600.

RFID, by increasing control and visibility of products moving through supply chains, has been proven to help increase sales while also lowering operating costs, Wal-Mart says. It boosts sales by reducing the number of out-of-stock situations in stores, and it lowers costs by helping to rid excess inventory, it adds. RFID, or radio frequency identification, uses a system of radio frequency tags and readers to record and transmit data over the Internet on shipments and products as they travel from suppliers to stores.

Wal-Mart says it’s encouraged in its RFID plans by continued evolution of the technology, including the wider use of Generation 2 RFID tags that can transmit data across wider distances at stock checkpoints in warehouses, stores and other locations.

"Recent internal analysis of our ongoing efforts, along with the launch of EPCglobal Generation 2 tags, reinforces the value of this technology for Wal-Mart, our suppliers and ultimately our customers," Rollin Ford, executive vice president and CIO, says. "We`re aggressively moving forward with the expansion of RFID-enabled facilities." EPCglobal pertains to the system of using electronic product code descriptions as transmitted by RFID networks.

"We believe this technology, when coupled with new work processes, will deliver even more benefits than we are currently receiving," he adds. "We are actively engaged in designing some new initiatives that will accelerate our program even further and, in so doing, create even more value for everyone involved. We`ll announce those initiatives as we roll them out."



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