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The Almighty Buck Technology

Wal-Mart Pushing Suppliers For RFID 145

Posted by Soulskill
from the their-way-or-the-highway dept.
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."
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Wal-Mart Pushing Suppliers For RFID

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  • So in other words, Sams Club is going to try to give themselves a $2 discount? I think I tried that with my cell phone bill because the service wasn't as good as I wanted. It didn't work out very well.
    • by rkcallaghan (858110) on Sunday January 20, 2008 @10:39AM (#22116684)
      JimboFBX wrote:

      So in other words, Sams Club is going to try to give themselves a $2 discount? I think I tried that with my cell phone bill because the service wasn't as good as I wanted. It didn't work out very well.
      Imagine you were, well you, and you were standing under King Kong's foot. If he steps on you, the obvious happens. Kong demands "a $2 discount" from you, even though you are his banana supplier.

      The question of the day is, does Kong get his bananas for $2 less? For extra credit, can you explain why reverse would not be true, if you attempted to demand a $2 on Kong's security services he's providing you?

      ~Rebecca
      • Re: (Score:2, Funny)

        by Anonymous Coward
        I'm not sure I understand; could you phrase it as a car analogy for me?
        • by creimer (824291)
          If Windows was installed on your car, and it suddenly demands you pay $2 to avoid having it go blue screen during freeway traffic, would you pay it? Or you could call the Microsoft support line to complain about this and hope that your license to start the car isn't revoked wirelessly?
      • by ShieldW0lf (601553) on Sunday January 20, 2008 @11:41AM (#22116950) Journal
        Imagine you were, well you, and you were standing under King Kong's foot. If he steps on you, the obvious happens. Kong demands "a $2 discount" from you, even though you are his banana supplier. The question of the day is, does Kong get his bananas for $2 less? For extra credit, can you explain why reverse would not be true, if you attempted to demand a $2 on Kong's security services he's providing you?

        Qualifying questions:

        If I give Kong a discount, am I still going to be able to eat? Or am I going to die slow? Can I feed my bananas to another monkey and have them grow while Kong shrinks? Do I enjoy my life enough that I wouldn't just tell Kong to fuck off out of spite?

        Wal-Mart are a short ways from collapse at all times, it's a consequence of their "Keep no back stock" policy. They run everything at the edge, and at some point, it's going to bite them hard.

        In the end, didn't King Kong get killed when everyone united against them?
        • by rkcallaghan (858110) on Sunday January 20, 2008 @11:56AM (#22117040)
          ShieldW0lf wrote:

          If I give Kong a discount, am I still going to be able to eat? Or am I going to die slow?
          There's a web full of anti wal-mart sites out there that can show you just how many companies (Levi Jeans, Master Locks, Huffy Bikes, etc.) this has happened to.

          So your first question is unfortunately irrelevant. Your second, is however, as the only winning move in this situation is not to play with King Kong at all, and attack him instead of yourselves as he demand. How to get that to happen is a topic for another day, under another revolution thread; as the Kong you'd have to defeat here has help this time.

          ~Rebecca
          • Re: (Score:3, Informative)

            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: (Score:3, Interesting)

              And somebody needs to investigate how well Snapper is doing as a result of that move. You never hear a follow-up.

              Here locally, I can tell you that the small mom & pop hardware store, the kind of place Snapper wants to sell through (higher markup, more money per unit sold for Snapper) is now out of business and the building is in the process of being converted into a strip mall.

              So let's see some links to a follow-up story, not that same tired old link. How is Snapper doing a year or so later?
              • by syphax (189065)

                Fair point.

                Why not answer your own question by doing some homework [fastcompany.com]?

                In fairness, the linked article is lighter on details than it should be...
          • by Jesus_666 (702802)
            Hmm... What would happen if the suppliers reacted by simply raising their prices across the board? For every product sold at Sam's Wal-Mart takes two dollars and gives two dollars. For every product sold at a regular Wal-Mart Wal-Mart gives two dollars.

            If they want to make it less obvious, they'll calculate how much of their stuff goes to Sam's as opposed to other Wal-Mart stores and adjust the price in such a way that they still don't lose any money.
    • by gatkinso (15975) on Sunday January 20, 2008 @10:40AM (#22116686)
      It would have if you were responsible for a large fraction of global celluar activity.

      Love em or hate em, Walmart has the clout to do so.
    • Re: (Score:3, Interesting)

      by kenh (9056)
      No, Wal-Mart is charging for a required service the Mfg./Supplier isn't complying with. Two dollars per Pallet is a fair price (IMHO) as they have to tag, inventory, and verify each non-RFID pallet that enters this one facility. That is an important point, BTW - this only impacts one Sam's Club distribution center. This is a reasonable business decision, much more reasonable than their previous position that untagged pallets wouldn't be allowed in their facility after a certain date (with no accommodation l
      • by Aladrin (926209)
        So you think it's fair to charge $2 to slap a $.20 RFID tag on a pallet? As far as I can tell, this is not 1 RFID per item, it's 1 per pallet. It is -only- used to track shipments, not individual products.

        Also bear in mind that just because the RFID says there's 200 widgets on that pallet doesn't mean there actually is. Walmart still has to verify that.

        Let's say a warehouse employee makes $18/hr. (They make less, I'm sure, but it makes the math easy.) $.20 goes to the cost of the tag, and $1.80 goes to
        • by homer_s (799572) on Sunday January 20, 2008 @11:16AM (#22116824)
          Let's say a warehouse employee makes $18/hr. (They make less, I'm sure, but it makes the math easy.) $.20 goes to the cost of the tag, and $1.80 goes to the cost of putting the tag on. This means that it takes 6 minutes (1/10th of an hour) to tag a pallet? If it took 3 minutes, I'd be very surprised. That employee should be able to tag 1 pallet per minute, easily. Remember, he doesn't have to actually COUNT the product, since even the tagged ones still need to be counted. He just needs to read the manifest and enter it into the computer, and slap the RFID tag on.

          Cost of employee to tag at 1 per min= $0.30
          Cost of labour training=0
          Cost of payroll tax, HR management=0
          Cost of chip = $0.20
          Cost of ordering the chips = 0
          Cost of receiving the chips = 0
          Cost of storage of the chips = 0
          Cost of restocking the chips = 0
          Cost of quality control = 0
          Cost of equipment to affix the chip=0
          Cost of insurance=0
          Cost of billing the suppliers and paperwork involved =0
          Interest on capital employed for the above=0

          Yep, your math works out. You should start your own business instead of posting here on slashdot.
          • by Aladrin (926209)
            Even if you did calculate that, most of which will be pennies because we're talking about millions of pallets, not just hundreds, they're still way over-charging.
            • Re: (Score:3, Insightful)

              by DRJlaw (946416)
              Even if you did calculate that, most of which will be pennies because we're talking about millions of pallets, not just hundreds, they're still way over-charging.

              You're suggesting that Wal-Mart is charging a premium to tag pallets of deliveries that they want to have tagged by the supplier rather than tagging it themselves?

              Shocking. If only there were a way for suppliers to tag their own pallets for less...
            • by tomhudson (43916)

              If the supplier thinks WalMart is overcharging, and that the tag should only cost 20 cents, they can always do it themselves.

              If, on the other hand, their cost to do it would be $5.00, why not let WalMart ding them for $2.00?

              Look, WallyWorld is not my favourite store, since I'm pretty much boycotting the crap that comes out of China nowadays, and I still insist on standing in line at the grocery store to talk to a HUMAN rather than use the self-checkout machines, but rfid tags on palettes makes sense, i

          • Re: (Score:3, Insightful)

            by shark72 (702619)

            Good points. I can add:

            • Overhead costs for warehousing the non-nettable inventory: zero
            • Lost sales due to inability to ship: zero

            I think more Slashdotters should go into the retail business. God knows we have the music business already figured out. Too bad we're all too busy playing WoW to change the world.

        • Re: (Score:3, Insightful)

          by Paradise Pete (33184)
          So you think it's fair to charge $2 to slap a $.20 RFID tag on a pallet?

          If they charged their cost, then the supplier could, in effect, "hire" the Walmart guy to put the tags on. It's much simpler - no need to buy the tags or equipment, and no chance of error. Walmart's aim is not to get the $2, it's to get the supplier to put the tags on.

          • It costs less for a worker to attach a tag to an empty pallet than to a loaded one. But, without the $2 fee, it costs the supplier less not to attach a tag at all, so Walmarts fee simply shifts the task to the supplier by making it worthwhile to tag. Sure, Walmart could tag the pallets after they are unloaded, but then the suppliers still have no incentive to use tagged pallets for future Walmart shipments. And it is a onetime expense, once tagged, the pallets stay tagged until either the tag or the pall
        • by shark72 (702619) on Sunday January 20, 2008 @01:11PM (#22117530)

          "So you think it's fair to charge $2 to slap a $.20 RFID tag on a pallet? As far as I can tell, this is not 1 RFID per item, it's 1 per pallet. It is -only- used to track shipments, not individual products."

          I suppose we can add channel management, supply chain management and logistics to the areas of knowledge that Slashdotters know everything about.

          Distribution centers have rules about receiving products. These rules are necessary to keep the inventory flowing and to keep costs down. Retail DCs (owned by Best Buy, Target and the like) have them, as do distributors, like Ingram and D&H.

          The missing RFID tag is a McGuffin -- it could be anything. Missing RFID? Low pallet count? High pallet count? Pallet packed with unexpected dimensions? Unannounced change in the case pack quantity or outer box pack quantity? The product doesn't conform, so it needs to be segregated to another part of the warehouse, and people need to be assigned to rework the product. In the meantime, it's dead inventory that can't be sold.

          As has already been mentioned, your estimate of the rework cost is low, but that's not the point -- Wal-Mart, Best Buy, Ingram et al aren't trying to build a profit center out of RFID tag reworks or any sort of rework! They pass the cost of the rework along to the supplier, and the goal is to have it not happen again. Product that's delayed in the warehouse or the DC means missed sales, and if it's a load-in for a holiday weekend or a scheduled promotion, lots of money is lost.

        • Re: (Score:2, Interesting)

          by Bhalash (797330)
          Inventorying an incoming pallet simply isn't as easy as reading the manifest. You have to physically check that the contents of the pallet match what is on the manifest or you will have stock loss (and lost money!). One major area of stock loss for many companies is transit. Either the company who shipped the goods didn't manifest them correctly, or they accidentally shipped the wrong goods, or stock was misplaced or stolen while in transit. When you receive an order you need to count what is actually on t
      • No it's not reasonable. Inventory has been done for thousands of years without a discount for well, COUNTING the stuff as it comes in. Just because walmart was to automate it's systems does not mean that this is efficient, reasonable, or cost effective for anyone else. With Walmart squeezing the suppliers on price, and the rising cost of shipping, how is this effective thing for Walmart help the supplier?

        Walmart may be the big gorrilla, but as of late customer satisfaction has been decreasing. The store
        • by aix tom (902140)
          RFID (or barcode identification of pallets as we do it) is great, because you don't have to count all the stuff that comes in, because the supplier has already counted it when it was loaded.

          When you receive a truck with one bill of lading and ~30 pallets, it's much easier to scan each pallet, and confirm what is on there against the electronically supplied list than to try to check 30 pallets by running from pallet to pallet with the bill of lading.

          And the supplier also has advantages.

          For example, we often
          • by llefler (184847)
            RFID (or barcode identification of pallets as we do it) is great, because you don't have to count all the stuff that comes in, because the supplier has already counted it when it was loaded.

            RFID on pallets has absolutely no effect on who counts stuff. The supplier is going to count every time they build a pallet, regardless of what Walmart does. Walmart OTOH, does vendor rating. And I would assume that like other businesses, that vendor rating has a metric for shipment accuracy. Once a supplier reaches
        • by Descalzo (898339)
          If you are correct, then what's going to happen is that people will stop doing business with Wal-Mart and they'll crash.
      • by suraklin (28841)
        Two dollars per pallet is not really fair. I work for a logistics company that handles the warehousing for a major cheese company. On a given week we normally send 7-10 trailers to that distribution center. Each trailer usually has between 30 and 50 pallets, so that is $60-$100 per truckload that our customer would lose. So at the high end they stand to lose $52000 per year with this initiative.

        On the other hand if we were to adopt RFID tech in the warehouse we would have to run TWO systems, one for the bar
      • No, Wal-Mart is charging for a required service the Mfg./Supplier isn't complying with

        So Wal-Mart is buying off a supplier who never RFID tagged anything, and probably never agreed to. Now Wal-Mart is going to charge the people who it's buying off a fee for tagging their stuff. This seems to me nothing more than a devious attempt by Wal-Mart to start shafting both ends of their business chain!

      • by rah1420 (234198)

        Two dollars per Pallet is a fair price (IMHO) as they have to tag, inventory, and verify each non-RFID pallet that enters this one facility.

        I believe that turns out not to be the case. (So much nicer than saying "Bullshit," isn't it?)

        My guess is that they receive an ASN - an Advance Ship Notice - for any supplier that they're contemplating hitting with this $2 surcharge (They do from us - I'm trying to remember what hierarchical levels we send, I believe we send Shipment, Order, Tare, Pack and Item level

    • by nip1024 (977084)
      Buy $348 Billion more in cell phone services and try it again.

      nip1024
  • by morbiuswilters (604447) on Sunday January 20, 2008 @10:42AM (#22116690)
    It's not being implanted in anyone, it's not being used to track personal information, it's just for inventory control. Maybe I'm missing something here, but this seems like the kind of application we should be supporting. Complaining about it seems almost as bad as the people who fought against barcodes because they contain the "mark of the Beast".
    • Re: (Score:2, Insightful)

      by Anonymous Coward
      Seems reasonable to me. Wal-Mart has a lot of "stuff" to track. The better they can track it, the better they can move it to where it's needed, avoid waste, and (it is to be hoped) offer lower prices to consumers.
    • Re: (Score:3, Funny)

      by Serenissima (1210562)
      Well, it's obviously NOT a good idea because it's in the "Your Rights Online" category. That has to mean there are some rights being infringed up, right? It's not like they would put in the YRO category just to make a sensationalist headline to get hits rather than actually inform people... right?
    • by Lord Satri (609291) <alexandreleroux&gmail,com> on Sunday January 20, 2008 @11:18AM (#22116836) Homepage Journal

      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 ;-)
      • by TopShelf (92521)
        For most in the retail distribution biz, the cost of RFID hasn't gotten low enough to justify the expense. Unless they apply RFID upstream within their own processes (a huge endeavor in cost & effort), it's just an additional cost of doing business with WalMart, having to slap an RFID tag on outgoing shipments.
    • by homer_s (799572)
      Just curious, why should "we" feel anything regarding this (unless you are a Walmart shareholder or a supplier)?
    • Re: (Score:2, Informative)

      by MagusSlurpy (592575)
      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.
  • Sounds like Apple (Score:2, Informative)

    by cbart387 (1192883)
    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.
    • Ummm I know it's not your point but Apple has always provided an option (and there've always been 3rd party providers as well). There was an external floppy available via USB connect... the same is true of the Air... external optical drive || hook up via external PC and 'borrow' it's drive

      • by cbart387 (1192883)

        external optical drive || hook up via external PC and 'borrow' it's drive
        '||' instead of 'or' ... programming too much? ;)
    • by kindbud (90044)
      Moderator dudes, this guy is employing irony, so he should be moderated Funny, not Interesting, you morons.
  • by James McP (3700) on Sunday January 20, 2008 @10:55AM (#22116728)
    Walmart wants the RFID b/c it will lower their operational costs. RFID has one advantage over barcodes; they can be read and counted at a distance and ignore dirt. If a sticker gets dirty, the barcode is unreadable, while if the pallet invoice is facing the wall it's inaccessible. RFID will still work.

    But this has a non-trivial adoption cost to the manufacturers. Walmart isn't incentivising this; no offers of cost sharing. Just a flat demand. It's not illegal AFAIK but it is abusive.
    • by Gordonjcp (186804)
      The problem is that if you've got a big stack of pallets, it can be hard to work out which one has the RFID tag you want. You either need to be reading from barcode distance, or not that bothered about which of the presumably identical pallets of boxes of breakfast cereal you're looking at.
    • Re: (Score:3, Interesting)

      by Casualposter (572489)
      "walmart isn't incentivising this."

      Exactly. For some operations, RFID makes sense, but there isn't just ONE RFID system installed. Most of these companies also supply other big chain stores who may have other requirements. This was the whole reason for going with Barcodes. Barcodes are standardized. RFID systems are not, as far as I know. Walmart hammers it suppliers for price decreases, while the shipping costs rise due to higher petroleum. The supplier has a choice: make money or go out of busines
      • by jhoger (519683)
        There exist standards for both EPC formats and reader protocols. See EPCGlobal's web site.

        -- John.
    • Re: (Score:3, Insightful)

      by jbengt (874751)

      It's not illegal AFAIK but it is abusive.
      <sarcasm>What, Walmart abusive to its suppliers? Incredible.</sarcasm>
      • by llefler (184847)
        What, Walmart abusive to its suppliers? Incredible.

        I don't see how buying a supplier's product is abusive. But Walmart does appear to have shrewd purchasing agents. Walmart collects huge amounts of data on what sells and what the price points are, so they come into negotiations well prepared. From the various articles I have read about supplier problems with Walmart (Levis, Vlasic, Huffy), it appears that the suppliers have been rather naive about the contracts they signed. If you sign a contract saying
        • by James McP (3700)
          Buying products isn't abuse, it's how Walmart manages the relationship.

          Year 1: BobCo normally sells 10,000 units/year of BobStuff. Walmart contracts for 2,000 units as a test. BobCo throws a party then ramps up staffing to cover the 20% increase.

          Year 2: Walmart decides BobStuff is doing well and orders 10,000 units. BobCo does a major plant upgrade to meet the demand.

          Year 3: Walmart asks for some additional "economy of scale" cost reduction in return for ordering 15,000 units but Walmart will only buy 1
          • by llefler (184847)
            But every step of the way it is BobCo's choice to spend the money and maintain the relationship. If they didn't want to expand their sales, they wouldn't have contacted Walmart in the first place. And it's a well known fact that Walmart expects cost reductions from supply chain efficiency improvements. If a company is making multi-year commitments based solely on a one year agreement with a specific customer, it may well be that they deserve to be bankrupt.

            Walmart isn't the only game around either. BobC
    • Re: (Score:2, Insightful)

      by goldspider (445116)
      Abusive? Please. It's the cost of doing business with Wal-Mart. Wal-Mart isn't forcing anyone to do business with them.
    • by jhoger (519683)
      Actually, there are other advantages.

      Here's one: you can scan an hundreds of items on a pallet wrapped in shrink wrap, *individually*.

      This turns out to be an issue because of an A/R issue called "deductions." This is where the recipient of goods deducts from the invoice saying that they didn't receive everything you claim to have shipped them. With RFID, you can count all items in the pallet right before you ship it.

      -- John.
  • by FooAtWFU (699187) on Sunday January 20, 2008 @10:57AM (#22116734) Homepage
    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...)

    • by tepples (727027)

      (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...)
      Even for patented or copyrighted goods?
      • What does walmart sell in any large quantity that is patented to the point that there is nothing similar right next to it on the shelf? I really can't think of many things that might enjoy such a position, but that would be a unique situation and certainly not something the majority of suppliers would enjoy. I mean even though the Super soaker is patented, there are a lot of water pistols and such in the toy section competing with the Super Soaker.

        Walmart's business model doesn't seem to invite the kind o
        • by tomhudson (43916)

          Board Games. Monopoly, Risk, Scrabble, etc. All trademark (not copyright) protected.

          Video Games. All protected by copyright and trademark

          Books. Copyrighted.

          All brand name products, from electronics to food to motor oil to running shoes.

          None of these are fungible. Ask any parent whose kid insists on Nike or Captain Crunch. Or any car owner who insists on Valvoline. Or EVERYONE who wants a Wii.

          • by cdrguru (88047)
            The problem is with board games and the like, you either deal with the world's largest retailer (and therefore have access to the world's largest retail marketplace) or you go out of business. WalMart's doesn't really care. Consumers are not going to not shop at WalMart if they no longer carry Hasbro products, but Hasbro will certainly be out of business if their products are not sold at WalMart.

            It is pretty simple for suppliers. You conform to the terms and stay in business or else.

            WalMart has pretty mu
            • The problem is with board games and the like, you either deal with the world's largest retailer (and therefore have access to the world's largest retail marketplace) or you go out of business.
              Nintendo could sell as many Wii consoles without Wal-Mart as with Wal-Mart.
              • by tomhudson (43916)

                "Nintendo could sell as many Wii consoles without Wal-Mart as with Wal-Mart."

                Very true. Also, I've seen games sell for less at other stores than they do at WallyWorld. This past Christmas included Cranium (bought 3 copies) and an electronic Sudoku game (5 copies).

                WalMart doesn't have any sort of monopoly on lowest prices. TV DVD recorders - Worst Buy/Future Shit had the best deal - bought 3 LG-850s at $99/each. Much better than anything WallyWorld had, even at a higher price.

                Also, there are manufactu [fastcompany.com]

  • Stack them (Score:4, Funny)

    by Fuzzums (250400) on Sunday January 20, 2008 @11:00AM (#22116750) Homepage
    If wallmart wants pallets with rfid, why don't they put the whole pallets of the supplyers on one of their pallets WITH rfids...

    Problem solved. NEXT!
  • by vodevil (856500)
    Does this really help with controlling inventory? The RFID is not on the product, but on the pallet. So, they're going to be able to track how many wooden pallets they have, but not the product that is sitting on top. Until it's implemented in the product, I don't see how this will help them.
    • I think the idea is that the stock comes in already strapped to a pallet such that it makes it easier to find a given pallet of stock. In the warehouse, the stock isn't removed from the pallet, the pallets aren't opened until the items are already placed in the area for sale to the customer. I think it might make it a lot easier to locate misplaced pallets. It might also be that the supplier electronically sends the tag ID and a bill of lading for that tag so it reduces paperwork. It might even greatly
    • Does this really help with controlling inventory? The RFID is not on the product, but on the pallet. So, they're going to be able to track how many wooden pallets they have, but not the product that is sitting on top. Until it's implemented in the product, I don't see how this will help them.
      This is as silly as requiring each line of code to have its own identifying number!
    • by jjohnson (62583)
      The idea is that the pallet tag is a unique number that can be matched with the electronic paperwork sent by the manufacturer. Scanning the pallet tag matches the physcial skid of product to a pending inventory transaction that lists all the product; after that, the products themselves are in the DC's system, and handled by logistics software.
    • The contents of the pallet (SKU's, qty's, etc) are sent electronically before the pallet arrives. The serial number in the RFID chip on the pallet is read and matched to the same serialized pallet in the database that was sent previously, so the system knows what the product is, who it came from, which purchase order, etc.
  • Wouldn't it make more sense to just have an rfid on each package?

    Pallets are just a bunch of wood. That doesn't give you a direct indicator of your product. It just tells you that that pallet is sitting there. Someone could have removed half of the product from it already, but the rfid reader would indicate that the whole shipment is right there.

    I'm looking forward to this so that I can shop at walmart again without having some annoying person ask to see my receipt as I leave. If it's embedded in the ac
    • by jbengt (874751)

      Wouldn't it make more sense to just have an rfid on each package?
      Even at $0.02 per tag, that would significantly impact the price or profit of a lot of small items, not even counting the initial cost of creating the infrastucture.
      • not even counting the initial cost of creating the infrastucture.
        The infrastructure is already there. Many of their products already have rfids, and they already use them to deter theft.

        • by Todd Knarr (15451)

          Not the same technology. Those theft-deterrent tags are just a small piece of metal foil shaped/sized so it's resonant frequency falls at a particular RF frequency. Broadcast on that frequency near it and it "pings" back with a signal. Hit it with a strong enough signal, the heat generated melts the foil and the tag no longer reacts. Notice that there's no data at all here, the tag's just a reflector. The gates near the store doors transmit a low-power signal and sound an alarm if they hear an echo from a t

    • by jjohnson (62583)
      Four years ago, when I was working for a manufacturer that was facing Walmart's first attempt to require RFID, the tags cost $0.60 apiece, and the equipment to print and program them was in the tens of thousands of dollars. They also failed to read up to 30% of the time. For a company already driving manufacturers out of business on price, adding that much to the cost of each package of product was impossible, even for Walmart.
  • by originalhack (142366) on Sunday January 20, 2008 @11:36AM (#22116922)
    They've probably had this in their terms and conditions on their purchase agreements for years.

    Imagine you run a monster distribution center. You order from a zillion vendors and pallets of merchandise appear. Some pallets have a nice list attached to them describing what is in them so you can route them to the store without unpacking them. Others just show up with a pile of boxes and you have to, at least partially, unpack and re-wrap them to confirm the contents.

    1. Your next version of your terms and conditions require a packing list.

    Then, you find that most of the lists have the PO number on them and list the items by part number, but a few just say something like "Here's 10 cases of green shirts." Most have the packing list printed on a label on the side of the wrapped pallet. Some have it inaccessible from the outside.

    2. Your next revision of your terms and conditions require the list to be on the outside and dictate the format.

    After a few rounds, you realize that these lists are very expensive to produce and to read and all of your suppliers have (or should have) computers anyway, so you have them electronically send you the packing list and specify a shipment number. That number goes on a bar-code label at a specific place on the shipment. On your receiving dock, you have someone dance around each pallet to scan it and then it disappears into your warehouse.

    3. Your next Ts and Cs require the bar-code

    You find that the bar-code requires stopping the flow of items in all sorts of places. You invest in RFID readers for your whole distribution line. You tag all the incoming shipments as they arrive, and you find that it works.

    4. Your next Ts and Cs require RFID labels.

    A grace period comes and goes. Tagged shipments fly right through your distribution center smoothly, but you have some suppliers who still don't comply with your agreements with them and you have to stop each of those shipments on your dock and slap an RFID label on them yourself. The industry gets to the point where labels with tags are down to 40 cents in tiny quantities and the equipment to program them is down to under a thousand. There are also companies that will sell tags preprogrammed for a dollar or two. Still, some of your suppliers who were eager to sell to you and signed the Ts and Cs the day they took the order, fail to follow through.

    5. You start to either refuse to accept shipments that don't comply with the contract or you charge a fee to fix the sloppy shipments.

    Now, a legitimate issue is where the power in the relationship is. WM is well known for holding all the power and that really can be viewed as being all about price and accepting the Ts and Cs in the first place. That's an issue that comes up anytime they meet with a supplier. If your Verizon service stinks, you cannot do anything about it because, when you "negotiated" your contract, you could either sign THEIR terms or you could go to one of a tiny number of serious competitors who seem to have conspired to have equally onerous terms. (This is exactly why legislators keep looking at things like "customer bill of rights" legislation... the individual customer doesn't have the ability to choose a better contract).

    • by HEbGb (6544)
      You are exactly right; most on this forum really don't understand this at all. Good job clearly explaining it.
    • by kindbud (90044)
      (This is exactly why legislators keep looking at things like "customer bill of rights" legislation...

      And they just keep looking, and looking, and looking.... "Now them's some pretty fine consumer rights we're admiring in this here bill."
  • Word of the Day... (Score:3, Insightful)

    by RealGrouchy (943109) on Sunday January 20, 2008 @12:34PM (#22117284)
    When a retailer is able to charge/coerce the people it buys its merchandise from, that retailer is a monopsony. [wikipedia.org] (I'm by far not the first to label Wal-Mart as such)

    - RG>
  • Yawn (Score:2, Informative)

    by 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.)
  • something like this [coolest-gadgets.com]?
  • Unlike bar codes, RFID chips could label an item as specific, making it easier to do inventory by doing a scan without double counting.

    However, if someone purchases it out at the register, do they remove the code from their database, or keep it in their system? Do they purge it after so many days (the concept of 90 day returns, or whatever store policy), or do they keep it indefinitely?

    What happens if the store kept it indefinitely, thus making the unique item specific to you. Meaning, if the RFID chip is p

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