Wal-Mart has decided to ratchet up the pressure on its 15,000 suppliers to comply with a 3-year-old inventory technology mandate. Beginning January 30, 2008, it will charge suppliers a $2 fee for each pallet without a RFID tag that is shipped to its Sam's Club distribution center in Texas.
The strategy is simple, according to InformationWeek:
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. It makes sense: Sam's Club has far fewer suppliers than Wal-Mart stores, and customers buy products by the case, the pallet, or individual packages that are larger ... than what's typically sold in retail stores.
Sam's Club contributed $41.5 billion to Wal-Mart's $344.9 billion in revenue for the fiscal year ending in 2007.
The pallet fee comes as a surprise to some suppliers, though companies that already conform to Wal-Mart's RFID mandate are understandably smug about it. Some, like Daisy's information systems manager, Kevin Brown, attest to the benefits of RFID.
Still, is it right for Wal-Mart to enforce such a mandate? Do you reckon that RFID is ready for the main-stream?
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Paul Mah is a writer and blogger who lives in Singapore, where he has worked for a number of years in various capacities within the IT industry. Paul enjoys tinkering with tech gadgets, smartphones, and networking devices.