Walmart's RFID Technology Impacts And Concerns

The result of Walmart's effective supply chain management and technology innovation/incorporation was evident through its growth. In the 1980s Walmart began working directly with manufacturers to cut costs and more efficiently manage the supply chain. From 1993 to 2001, Walmart grew from doing $1 billion in business a week to $1 billion every 36 hours, growth that was attributed as much to supply chain management as to customer service. In 2011, Walmart sold $1.22 billion worth of products every day. 

“Walmart Radio Tags To Track Clothing.” That was the headline of a story in The Wall Street Journal back in July 2010. Walmart announced what is now famously known as “the mandate” ten years earlier. The goal of this mandate was to have all suppliers tagging cases and pallets with RFID smart tags by the end of 2006. This implementation propelled Walmart to being one of the most efficient global supply chain managers resulting in much greater visibility and more precise ordering. In addition, Walmart is planning to enhance mobility to its existing RFID tag readers by implementing RFID-enabled forklift.

RFID Functionalities

Walmart has been using the for almost a decade now and the company has cited numerous advantages including the effective inventory management system. Over the years, this technology has helped Walmart to reduce the excess inventory and cut down the out-of-stock occurrences by almost one-third. Walmart has been using the for almost a decade now and the company has cited numerous advantages including the effective inventory management system. Over the years, this technology has helped Walmart to reduce the excess inventory and cut down the out-of-stock occurrences by almost one-third. 

The CIO at Walmart stated that “Wal-Mart has been able to restock RFID-tagged items three times as fast as non-tagged items.”

General points of RFID utilization. Source: Zebra Technologies

RFID and smart tags are just the next generation in supply chain innovation that dates back to the 1960s, when Sam Walton personally attended an IBM school in upstate New York with the intention of landing experts to computerize operations. “The euphoria around Walmart spurred a lot of innovation by the RFID industry,” says Kerry Krause, vice president of marketing for Impinj, a provider of RFID readers and silicon chips. Walmart uses RFID in the following ways (not limited to the list):

  

Walmart's RFID Uses

It is not all rosy for Walmart and RFID. Over the years, there have been a few concerns and controversies around the use of this technology. One such issue with RFID involves privacy concerns. Some public interest groups worry that retailers like Walmart will use the data to profile customers, linking purchases with other identifiers, such as credit cards and driver’s licenses. Will these concerns be a roadblock for the companies that are planning to incorporate this technology in the future?

References:

1. http://www.logisticsmgmt.com/article/rfid_update_back_on_growth_track/

2. Wal-Mart Case Study – RFID and Supply Chain Management - Angrish, Sangita; Chivukula, Venkata S. DeWitt, Brendon; Patel, Raxesh; Shamsi, Shazeb; Yellapragada, Ramachandra. Dated:November 30, 2005

3. http://www.danielmillsap.com/research/rfid-in-wal-mart-global-supply-chain-management.html

4.http://www.arkansasbusiness.com/article/85508/wal-mart-used-technology-to-become-supply-chain-leader?page=all

5. http://www.usanfranonline.com/rfid-technology-boosts-walmarts-supply-chain-management/

6. http://www.ups-scs.com/solutions/white_papers/wp_RFID.pdf