Wal-Mart Pushing Suppliers For RFID

Weather Storm brings us an InformationWeek article about Wal-Mart's push for suppliers to RFID tag their product shipments. Wal-Mart seems to have lost patience in waiting for its suppliers to adopt the inventory tracking initiative. From InformationWeek: "The retailer says that beginning Jan. 30, it will charge suppliers a $2 fee for each pallet they ship to its Sam's Club distribution center in Texas that doesn't have an RFID tag. The charge is to cover Sam's Club's cost to affix tags on each pallet, says a Wal-Mart spokesman. The retailer hasn't taken such a strong-arm approach yet with the more than 15,000 suppliers that still haven't complied with its request to tag pallets and cases headed for its Wal-Mart stores. Instead, it seems focused on turning its 700-store Sam's Club warehouse-outlet division into an example of RFID supply chain technology in action, down to requiring item-level RFID in 22 distribution centers by 2010."

Sounds like Apple

[cbart387]

Apple takes a similar approach by forcing change, ie floppy drives [theregister.co.uk], the recent Mac Air no optical drive etc. Even though Apple takes a more extreme approach (my-way-or-the-highway versus my-way-or-you-pay-extra) this being slashdot it's because Walmart is EVIL.

Couple of thoughts....

[FooAtWFU]

1. Sam's Club is a good place to try it out for starters. They tend to have a lot of big pallets and since the chips aren't cheap yet it's a good way to get the most for their money as they prove technology.

2. I understand that to not-do-business with Walmart is to await death. To do business with Walmart, however, is to invite death. (Seriously, they will put so much price pressure on you... and are not at all concerned with running you, as a supplier, into the ground, since there are plenty of other suppliers out there...)

RFID and Walmart and more

[Lord Satri]

Maybe I'm missing something here, but this seems like the kind of application we should be supporting.

I agree, without much analysis, to me it seems Walmart is pushing their partners in the right direction: enhanced efficiency for everyone.

Let me act as a karma whore (not that I care about virtual karma). Last May [rfidjournal.com] Walmart was announcing their embrace of the RFID tech, underlining the "green" component of this tech. Then, /. discussed in October Walmart's faltering RFID initiative [slashdot.org]. (Flash map of Walmart stores [brightcove.com]) And today, great news, Walmart is deep into RFID. Technology itself is neutral, it is what we do with it that makes it good or bad.

Other RFID stories that I find pertinent: a successful implementation of RFID tags [ornl.gov] at the Oak Ridge National Laboratory's Washington Navy Yard. Don't forget we discussed over /. the use by Microsoft of RFID for marketing in groceries [slashdot.org]. If Microsoft is using it, it must have great potential? ;-) I won't lie that I'm amazed at passive RFID chips being as small as 0.15mm x 0.15mm x 0.0075mm (Hitachi) [slashgeo.org], enabling rather conspiracy-theory applications of the tech. India [slashgeo.org] and China [slashdot.org] seems are seriously looking at RFID. Well, you get the idea, more stories about RFID here [slashgeo.org]. We live in interesting times. Technology is evolving at an exponential rate... now I wonder if we, as a civilization, will successfully cope with the realities of our resources-limited planet... (I'll stop here, I'm getting off-topic ;-)

Yawn

[Anonymous Coward]

This practice is known in the industry as Expense Offset. When I worked for them 10 years ago, Federated (now just Macy's) assessed their vendors Expense Offsets for a whole host of things. Basically the merchandise was supposed to come as pre-prepped for the floor as humanly possible, and checklists for each type of item came with a dollar amount for each omission (no barcode tag, not on hanger, wrong creases that had to be ironed out, etc.)

Re:Can you charge a supplier $2?

[0100010001010011]

In Levi's case, they just run a separate production line. Less thread count, less stitches, cheaper materials. If you get a pair of Levis from walmart and compare them to a pair of Levis from another store, you may very well get a completely separate pair of pants.

Snapper Lawnmowers [fastcompany.com] on the other hand put their foot down and said No. Walmart asked for that $5 discount and Snapper came back and said No and pulled there mowers.

Some companies still have a bit of integrity.

Re:Can you charge a supplier $2?

[shark72]

"So what you're saying is that bullying is OK - that the larger party deserves concessions, and can do whatever the hell they want just because they're larger, and that this is perfectly acceptable."

This is hardly something that Wal-Mart invented -- all distributors and major retailers assess charges to rework product that doesn't arrive in the expected form. RFID tags are just the latest technological item (which is why this warrants discussion on Slashdot), but if you tell a distributor or major retailer that you're going to ship your product in ten-packs, then ship it in five-packs, you'll be charged to have it reworked. While I grant that this might be surprising news to many Slashdotters, people in the retail industry will react to this story with a collective yawn.

Things like this happen in every industry, in lots of scales. No doubt you've been involved in a contract (such as a rental agreement for an apartment) which states that a late fee is charged if an invoice is not paid by the expected date. Call it "bullying," but it's rather pedestrian.

Re:Isn't this a good use for RFID?

[MagusSlurpy]

Yes, it actually IS one of the few good uses for RFID, one of the things that it was actually designed for - tracking of pallets in a warehouse environment. Having worked in a warehouse in my undergrad years, I can say quite easily that our "pallet tracking system" (i.e., writing the SKU on it and putting it up somewhere in our 150,000 sq ft) needed some improvement.

I am all for legitimate uses of RFID. When Wallyworld starts demanding that individual items be tagged, then I will be upset.

Re:Can you charge a supplier $2?

[Anonymous Coward]

Your wish is granted:

http://www.reuters.com/article/pressRelease/idUS145287+08-Jan-2008+PRN20080108 [reuters.com]