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Wal-Mart Begins RFID Rollout
2004 04 30

By Mark Roberti

Apr. 30, 2004—Wal-Mart today begins receiving cases and pallets of product with RFID tags carrying Electronic Product Codes (EPCs) at a distribution center in the Dallas/Fort Worth area as part of a test being conducted with eight suppliers. The tagged goods will be tracked to the back of seven Wal-Mart stores in Texas.

Wal-Mart is billing this as a trial, but Simon Langford, Wal-Mart's manager of RFID strategies, told RFID Journal that this is the beginning of the company's planned roll-out of EPC technology.

"Last year, when we briefed our suppliers, we said that we planned to do a real-world pilot in one distribution center and several stores," he says. "It's been in our plans all along and is a natural follow-on to our testing in the lab."

Wal-Mart said in June 2003 that it would require its top 100 suppliers to begin shipping tagged pallets and cases in January 2005. The retailer has spent nearly a year doing extensive tests in an RFID lab. It has been testing equipment in the Texas distribution center since mid-April.

The eight suppliers participating in the test are Gillette, Hewlett-Packard, Johnson & Johnson, Kimberly-Clark, Kraft Foods, Nestlé Purina PetCare Co., Procter & Gamble and Unilever. Wal-Mart says more companies will be added as the trial progresses.

"We're grateful to these companies for their commitment to improving the supply chain process," Linda Dillman, Wal-Mart's CIO said in a prepared statement. "It isn't easy being a pioneer . . . But that's how progress is made and these eight companies are at the forefront of revolutionizing the way we do business."

Initially, only 21 of the more than 100,000 products carried in a typical Wal-Mart Supercenter will be included in the trial. Tagged pallets and cases of those products will arrive at Wal-Mart's regional distribution center, where readers at the dock doors will automatically scan the tags. The data will be passed to an application that will alert the retailer's operations and merchandising teams and the products' suppliers that the specific shipment has arrived.

At the distribution center, cases will be removed from the pallets and processed, as usual, and then trucked to the seven participating Wal-Mart stores. When tagged cases arrive at the back of the seven stores, the tags on the cases will be read and automatically confirm the arrival of the specific shipment.

Wal-Mart aims to read 100 percent of all tagged pallets coming through the dock doors at the DC and stores equipped with readers and 100 percent of all tagged cases on conveyors within the distribution center. Langford says Wal-Mart expects to be able to achieve 100 percent read accuracy, and the pilot should confirm that that is possible.

The retailer stressed that the goal is to improve the on-shelf availability of products within its stores and that privacy concerns are being addressed. "We certainly understand and appreciate consumer concern about privacy," Dillman said. "That's why we want our customers to know that RFID tags will not contain nor collect any additional information about consumers. In fact, for the foreseeable future, there won't even be any RFID readers on our stores' main sales floor."

Tagged cases may appear on the sales floor of the seven Wal-Mart stores involved in the test, as well as at other stores (which do not currently have RFID readers at their dock doors) served by the Texas distribution center. Some individual products (cases of one, as Wal-Mart refers to them) will have tags. These include two types of HP printers and an HP ScanJet scanner.

The tags will be in the packaging of those individual products and the packaging will be marked with an EPCglobal symbol, indicating an EPC tag is present. The tags will be disposed of when the packaging is thrown away, and customers will not be tracked after they leave the store. Signs featuring the EPCglobal logo will be placed at the shelf where the HP products are sold to help customers identify tagged items.

Many of those involved with the trial and the development and commercialization of EPC technology sense this is a significant moment, on par with the first commercial scanning of a Universal Product Code on a 10-pack of Wrigley's chewing gum on June 26, 1974. "It's historic day," says Jack Grasso, a spokesperson for EPCglobal, who will be on hand to see the first tagged product arriving. "This is the first time EPC technology is being used in an actual application. It's a sign of the momentum that is behind EPCglobal and EPC technology."

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