RFID at Wal*Mart

Wal*Mart, the world’s largest retailer and one of several pioneers in retail use of RFID tags, along with Germany’s Metro, will welcome another 300 vendors into its RFID program in 2007, joining the first 300. While many observers questioned whether RFID is really ready for retailing, Wal*Mart executives assured financial analysts recently that the system is helping improve the company’s already legendary efficiency.

More than 3 million RFID-coded pallets and cases are moving weekly through the five Wal*Mart distribution centers serving 1,000 stores, according to John Menzer, the company’s Vice-Chairman. More stores and distribution centers will be added to the program, he said, further enhancing company efficiency. One of the programs made possible by the RFID program is the ability to load the fastest moving items into a single truck, departing from a DC to stores, so those items, when they reach the store, can be taken directly to the sales floor, which ensures better in-stock positions, increased sales and happier customers. Tag costs, once 50 cents each, continue to drop dramatically, and are at 8 cents today, Menzer reported.

With another 300 suppliers joining the program next year, even greater efficiencies will be achieved, he promised. Menzer told analysts that 1,200 stores were remodelled by November this year, completed in time for the Christmas holiday selling season. He also said the company is achieving cost-savings and helping the environment by the installation of more than 330 million square feet of skylights in the stores, cutting down on electrical usage. The installation of LED lighting is also underway and is planned for all stores. These systems use 50% less energy than traditional store lighting. The company further committed to helping the environment with the recent launch of its ‘Packaging Scorecard’, a campaign to reduce packaging across its global supply chain by 5% by 2013.

Wal*Mart’s scorecard is a measurement tool, that allows suppliers to evaluate themselves relative to other suppliers, based on specific metrics. These metrics evolved from a list of favourable attributes announced earlier this year, known as the ‘7 Rs of Packaging’: Remove, Reduce, Reuse, Recycle, Renew, Revenue and Read. In addition to preventing millions of pounds of trash from reaching landfills, it will save energy and reduce emissions. More than 2,000 private label brand suppliers now have access to the packaging scorecard, including the ability to input information and measure their performance against competitors. On February 1, 2007, Wal*Mart will share the packaging scorecard with its global supply chain of more than 60,000 suppliers. As of February 1, 2008, Wal*Mart will begin using the packaging scorecard to measure and recognize its entire supply chain based upon each company’s ability to use less packaging, utilize more effective materials in packaging and source these materials more efficiently relative to other suppliers.
Pic: Walmart front revised.jpg Wal*Mart is committed to improving efficiency and helping the environment