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Wal-Mart takes 'tough-love' RFID approach

Wal-Mart takes 'tough-love' RFID approach

Wal-Mart is taking a 'tough-love' approach on RFID with the top 100 suppliers that are being asked by January 2005 to ship pallets and cases to its distribution centers using the technology.

Wal-Mart is taking a "tough-love" approach on RFID with the top 100 suppliers that are being asked by January 2005 to ship pallets and cases to its distribution centers using the technology. H. Lee Scott, president and CEO of the retailer, told the US National Retail Federation annual conference in New York that there's pressure to move the suppliers to RFID "but also an understanding that we're not trying to hurt them either."

"If they just can't do it, I mean, it's not like we're going to quit doing business with them," Scott said.

Only Wal-Mart's top 100 suppliers face the January 2005 deadline that the retailer set for compliance, but the rest have been asked to follow suit by the start of 2006. Wal-Mart late last year informed its top suppliers during a meeting in Arkansas that the RFID rollout will start at its three Texas distribution centers, servicing about 150 stores, and continue incrementally across the country. Plans call for the time frame for the remainder of the 108 distribution centers and 3,000 stores to be disclosed later, on a rolling basis, to suppliers through Wal-Mart's RetailLink extranet site.

Scott said he thinks the time frame is realistic, "but if it isn't, we'll back off." He said that he recently met with suppliers, and "they were very positive in what they were doing."

"I don't think they were just doing that -- I don't know what the technical term for it is -- we call it 'sucking up,' " Scott added, his comments greeted by laughter from many of the more than 2,000 retailers and industry observers in attendance. "But I think many of our suppliers are right in the midst of it and involved," he said.

Scott told the attendees that RFID is "a very important innovation" and that benefits will be seen over the long term -- not in 2004. He said RFID ultimately will allow retailers and suppliers to drive costs out of the business and do a better job of keeping items in stock, so they'll be able to pass cost savings on to consumers. -- Computerworld (US)

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