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To: Montana Wildhack who wrote (180)	6/10/2003 9:32:18 PM
From: Montana Wildhack	Read Replies (1) \| Respond to of 342

Wal-Mart's RFID Mandate Radio frequency identification goes mainstream as world's largest company directs top 100 suppliers to use RFID by January 1, 2005 by Demir Barlas, Line56 Wednesday, June 04, 2003 -------------------------------------------------------------------------------- Radio frequency identification (RFID) technology will be receiving an enormous boost from retail giant Wal-Mart at next week's Retail Systems event in Chicago. According to Pete Abell, a research director at AMR research, Wal-Mart's session (entitled, "Forecast How RFID Will Impact Retail," and co-presented with the Uniform Code Council) will see the world's largest company direct its top 100 suppliers to have all their cases and pallets "chipped" by January 1, 2005. Debra Faragher, VP of marketing and communications, says that UCC EVP and COO Mike DiYeso and Wal-Mart SVP and CIO Linda Dillman "plan on a presentation that reflects an industry initiative, not just a Wal-Mart or a UCC initiative." As such, the two organizations are definitely taking a leadership role. Wal-Mart's mandate, along with the adoption of an RFID standard led by EAN-UCC, means the mainstreaming of RFID. "The top 100 Wal-Mart suppliers will use something like 8 billion tags a year," Abell says, indirectly highlighting the vendor opportunity. Indeed, two vendors -- Manhattan Associates, a supply chain execution (SCE) specialist and Alien Technologies, best known for its deal with Gillette -- have already decided to announce a packaged RFID solution targeted at Wal-Mart suppliers, among others. Abell explains how the mandate will impact the operations of Wal-Mart suppliers. "If I'm Smucker's and I put 16 jars of jam into a case, I have to have a reader-writer that writes to the tag, saying it's Smucker's, and adds a serial number. I have to integrate that into my software and material handling." Another aspect of the RFID initiative -- tags for cases -- will largely be taken care of "By corrugated guys like Georgia-Pacific and Weyerhauser," Abell says. Abell adds that Wal-Mart is already working with several suppliers in the context of the Auto-ID Center, and that this will make the transition easier. He concludes that Wal-Mart is deeply committed to the initiative. "They're doing this the way they did barcodes." Analyst Gene Alvarez of META Group is careful to explain that Wal-Mart's mandate will require suppliers to overcome some challenges. "Liquid can have an effect on RFID, or if the packaging is metallic, or if the product comes in large sacks," he says. "Some of my clients, who are already feeling the pressure from Wal-Mart, are finding that the same tag or reader doesn't work for all types of products. The challenge is to become compliant without breaking the bank." Alvarez believes that no e-business software, services, or hardware vendor can step in and be a one-stop RFID shop. "It's a collaborative approach," he says. Wireless system vendors, RFID reader and chip manufacturers, packing vendors, enterprise resource planning (ERP) vendors, warehouse management software providers, and logistics companies, among others, are all involved. Alvarez concludes by cautioning that, because of the novelty of RFID in certain business contexts, "We haven't yet determined the impact on software applications -- it could be minimal, or it could have a significant impact."