Wal-Mart CIO says suppliers are reaping benefits from tagging program
By Staff -- Manufacturing Business Technology, 4/1/2005 12:00:00 AM
Linda Dillman, executive VP and CIO of Wal-Mart, Bentonville, Ark., says the retail giant's RFID program is working and producing benefits "for everyone involved."
Dillman, who made that statement during her keynote address at RFID World 2005 in Dallas in early March, obviously was addressing the numerous critics who have accused Wal-Mart of forcing suppliers to adopt technology that will only pay dividends for the retailer.
Wal-Mart set a January 2005 deadline for its 100 largest suppliers to start delivering pallets of goods bearing RFID tags to Wal-Mart distribution centers (DCs) in the Dallas area. "We did it," Dillman said. "We are live in 104 Wal-Mart stores, 36 Sam's Clubs, and three DCs in the Dallas area. One hundred suppliers have tagged more than 23,000 pallets, and we've done more than six million reads in a single month."
While conceding that RFID is improving Wal-Mart's ability to track inventory—thus lowering its number of stock-outs, as well as the cost of labor associated with filling store shelves—Dillman said, "The ultimate success of RFID depends on what our suppliers do with it." She added that several Wal-Mart suppliers are using RFID to their own advantage.
Dillman cited Hampton, a Foothill Ranch, Calif.-based manufacturer of locks and other security-related products, which is finding RFID useful in simplifying its payment reconciliation process; as well as an unidentified supplier that discovered its logistics provider was delivering items to Wal-Mart a day later than the supplier thought—information the company can use to enforce a service agreement with the logistics provider.
Dillman also urged the audience to take the first step toward RFID adoption.
"It helps if someone in your company is willing to champion the technology," she said, adding, "I would start sooner rather than later."
