Breakneck pace of RFID becomes unstoppable
THE growth of radio frequency identification (RFID) in the US has reached breakneck speed and nothing appears likely to derail the juggernaut in spite of a number on unanswered questions about its application.
Now Australian supermarkets have jumped on board, launching a project to prepare for the use of RFID here. Headed up by the Australian and New Zealand food and grocery councils and ECR Australasia,, the project involves input from retailers Woolworths, Coles and Metcash, suppliers such as Gillette, Arnotts and Cadbury Schweppes and packaging and logistics companies like Visy and Linfox.
In the US last month, retail giant Wal-Mart insisted its target date of January 2005 for its top 100 suppliers to adopt RFID chips on all cases and pallets would be met, refuting rumours that many suppliers could not make the deadline.
The company began its trials of both RFID tags and electronic product codes (EPCs) early last month and claimed its supply chain partners were all on track to meet the 2005 deadline.
Wal-Mart has nominated January 2006 for the rest of its supplier to also meet the RFID compliance demand. The current Australian project does not set any deadlines, but a timetable is expected to emerge from it sooner rather than later.
Meanwhile, powerful Wal-Mart has been further vindicated in its stubborn insistence on the adoption of the technology, with several packaged goods leaders including Proctor & Gamble, Gillette and even the US Department of Defense, committing to the use of RFID technology in open supply chains.
In February this year, Target, the fourth-largest US retailer, implemented a supplier RFID plan, continuing the worldwide RFID supply chain adoption push and ensuring the tear-away growth of the technology is now unstoppable.
RFID is becoming the fastest-growing technology in the automatic data collection industry. But some observers are worried about the questions that have not been answered, questions about cost and about privacy in particular.
Barcodes are scanned up until a product is purchased at the checkout, and not beyond that. But this is not necessarily the case with RFID tags. While some manufacturers may tag just their packaging, others could tag the products themselves. Could the tag and its ability to track the product remain with the product forever?
According to Lexis-Nexis, Wal-Mart is currently testing EPCs with eight manufacturers, including Gillette, Procter & Gamble, Nestlé and Unilever, at a regional distribution centre in Dallas.
The manufacturers' support, at a time when many are raising doubts over the benefits of RFID, will be vital to the success of the project, said Linda Dillman, chief information officer at Wal-Mart.
"We are grateful to these companies for their commitment to improving the supply chain process," she said. "It is not easy being a pioneer, but that is how progress is made. These eight companies are revolutionising the way we do business."
The trial, which will initially cover 21 products in seven stores, will pave the way for Wal-Mart to achieve its target of having its top 100 suppliers using RFID by January 2005, Dillman said.
The announcement followed speculation that Wal-Mart was backing off from the deadline, rumours of which intensified when the first round of suppliers of tightly-controlled prescription drugs missed their deadline.
All but two of Wal-Mart's top 100 suppliers are on track to meet the deadline, with many planning to join the trial earlier, said Simon Langford, manager of RFID strategy at Wal-Mart.
19-May-2004