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Negative reinforcement: Charging for non-compliance

When WalMart rolled out its RFID program in 2005, it didn't expect that in 2008 most of its 60,000 suppliers wouldn't be complying. Why? Because it would cost them money to do so. That's why the retail giant instituted "fees" for those suppliers who don't follow the program.

WalMart has developed a reputation as quite the corporate bully for its poor labor and development practices. And if you're a retail competitor, you can't hope to compete with the mega chain's low prices (that some say were achieved through intimidation of suppliers).

So you'd think that when the corporate version of Tony Soprano decided to roll out its RFID technology, its suppliers would be eager to jump onboard with whatever it had to do to comply. In this case, WalMart wanted an RFID tag on every pallet of merchandise delivered. The deadline for the initial requirement was 2005. Now, in 2008, most of Wal-Mart's 60,000 suppliers aren't using RFID. Why? Because it would cost them money to do so.

So what's WalMart's next step? How about charging a $2 fee for each pallet that arrives without a tag? Of course, WalMart stresses that this is not a penalty fee, it's a more of a labor charge for their having to put the 10-cent RFID tag on the pallet themselves.

Of course, most of us don't have the gall or the power to make a stand like this when implementing new technology, but charging for non-buy-in seems like something that might catch on in a world where dollar is king. Wouldn't that idea appeal to the Board of Directors!

About

Toni Bowers is Managing Editor of TechRepublic and is the award-winning blogger of the Career Management blog. She has edited newsletters, books, and web sites pertaining to software, IT career, and IT management issues.

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