Wal-Mart Begins Roll-Out of Electronic Product Codes at Seven Supercenters in Dallas/Fort Worth Metroplex
30 April 2004 - 1:00PM
PR Newswire (US)
Wal-Mart Begins Roll-Out of Electronic Product Codes at Seven
Supercenters in Dallas/Fort Worth Metroplex Eight Manufacturers
Participating in First Phase of Implementing Radio Frequency
Identification (RFID) Technology at the Case and Pallet Level
BENTONVILLE, Ark., April 30 /PRNewswire-FirstCall/ -- A new era in
supply- chain management begins this morning as Wal-Mart and eight
product manufacturers begin testing electronic product codes, or
EPCs, at select Supercenters and one regional distribution center
in the Dallas/Fort Worth metroplex. This pilot is the next step in
Wal-Mart's addition of radio frequency identification, also known
as RFID, to improve product availability for Wal- Mart customers.
The real-world trial follows extensive testing at the company's
RFID lab and months of collaborative preparation by Wal-Mart and
its suppliers. Field equipment testing has been underway in Texas
since mid-month but nothing with an RFID tag was placed on store
shelves. "It is imperative that we have the merchandise the
customer wants to buy when they want to buy it," said Linda
Dillman, executive vice president and Chief Information Officer.
"We believe RFID technology is going to help us do that more often
and more efficiently. This will help us increase customer
satisfaction in the near-term and ultimately play an important role
in helping us control costs and continue offering low prices."
Wal-Mart has set a January 2005 target for its top 100 suppliers to
be placing RFID tags on cases and pallets destined for Wal-Mart
stores and SAM'S CLUB locations in the Dallas/Fort Worth metroplex
area. Since announcing that initiative nearly a year ago, 37
additional suppliers have voluntarily chosen to meet that same
milestone. The implementation beginning today will pave the way for
achieving this goal. EPC vs. Bar Codes While bar codes can tell a
retailer that it has two boxes of product XYZ, EPCs help
distinguish one box of product XYZ from the next. This allows
retailers greater visibility in monitoring product inventory from
supplier to distribution center to store. RFID technology -- which
facilitates EPC -- has been in use since the 1940s. Anyone using a
toll tag or unlocking a car door using a keyless remote is already
using RFID. In the supply chain application, passive RFID chips
with small antennae are attached to cases and pallets. When passed
near a "reader," the chip activates and its unique product
identifier code is transmitted back to an inventory control system.
Readers used by Wal-Mart have an average range of 15 feet. "We can
certainly understand and appreciate consumer concern about
privacy," Dillman said. "That is why we want our customers to know
that RFID tags will not contain nor collect any additional data
about consumers. In fact, in the foreseeable future, there won't
even be any RFID readers on our stores' main sales floors.
"However, down the road there are so many possibilities to improve
the shopping experience that we hope customers will actually share
our enthusiasm about EPCs," she continued. "As we look forward
five, 10 years, we see the possibility of offering expedited
returns, quicker warranty processing and other ways to minimize
waiting in lines. There are also positive product recall
implications and a critical ability to combat counterfeit
pharmaceuticals. "If you think about it, this is really repeating
the steps we took in introducing bar codes into our stores back in
the early '80s. And we're seeing much of the same consumer
uncertainty that came with that technology," Dillman said. "We're
confident that EPCs will prove to be just as valuable to retailers
and, more importantly, to their customers as the bar code."
Participating Suppliers The eight manufacturers participating in
the first phase of the trial are The Gillette Company (NYSE:G), HP
(NYSE:HPQNASDAQ:HPQ), Johnson & Johnson, Kimberly-Clark
(NYSE:KMB), Kraft Foods (NYSE:KFT), Nestle Purina PetCare Company,
The Procter & Gamble Company (NYSE:PG) and Unilever
(NYSE:UNNYSE:UL). "We are grateful to these companies for their
commitment to improving the supply-chain process," Dillman said.
"It isn't easy being a pioneer. It takes time, it takes resources
and it takes vision. But that's how progress is made and these
eight companies are at the forefront of revolutionizing the way we
all do business. "Our other partners are making progress as well,"
she continued. "We'll be bringing additional suppliers into this
trial in the weeks ahead. That's possible because companies are
seriously exploring what this technology can do for them above and
beyond anything they are doing to address our goal -- something we
have advocated from the beginning." "As an early adopter of RFID in
our own operations, we can attest to the tremendous advantage it
affords businesses and their customers," said Dick Lampman, HP
senior vice president, Research and director, HP Labs. "We believe
RFID will help retailers, manufacturers and other users reduce
supply chain costs while speeding the flow of merchandise from the
factory, through the distribution center and to the retail store,
ultimately providing customers with better product availability."
Field Test Synopsis Initially, a total of 21 products out of the
more than 100,000 products carried in a typical Supercenter will be
included in the trial. Cases and pallets containing these products
will feature EPCs when delivered to Wal- Mart's Sanger, Texas
regional distribution center where RFID readers installed at dock
doors will automatically let Wal-Mart's operations and
merchandising teams as well as suppliers know this exact shipment
of products has arrived and is inside the building. Cases will then
be removed from pallets and processed as usual through the
distribution center. Wal-Mart is targeting 100 percent readability
of pallet tags through dock doors and 100 percent readability of
case tags on distribution center conveyor belts. At seven pilot
stores in the Dallas/Fort Worth metroplex -- specifically in the
communities of The Colony, Decatur, Denton, Hickory Creek,
Lewisville and Plano, RFID readers at dock doors will replicate the
process from the distribution center by automatically confirming
that this particular shipment is now in the store's back room.
Individual products will then be stocked as needed. During the
initial test, tagged cases and pallets may be distributed to stores
throughout North Texas and South Central Oklahoma -- the
geographical area served by the Sanger, Texas distribution center.
As suppliers expand their efforts to meet the requirements of
multiple retailers, it is possible that tagged cases and pallets
will arrive at Wal-Mart stores around the country. However, readers
will not be installed in stores outside the Dallas/Fort Worth
metroplex so those cases and pallets would be handled as usual.
Although Wal-Mart and its suppliers are focusing on case and pallet
level tagging, there are instances where a case can also be a
product's individual consumer packaging. This is especially true
for electronic items. In the test beginning today, three products
-- two HP Photosmart photo printers and an HP ScanJet scanner --
may feature RFID tags on the outer packaging consumers see on store
shelves. That outer packaging will be marked with an EPCglobal
symbol. EPCglobal EPCglobal (http://www.epcglobalinc.org/consumer )
is a joint venture of EAN International and the Uniform Code
Council. It is the organization chosen by industry to develop
standards for RFID technology in the global supply chain based on
user needs and business requirements. As a charter member of
EPCglobal, Wal-Mart fully adheres to its core principles related to
privacy issues, including consumer notice, consumer education and
consumer choice. EPC education pamphlets will be available to
interested parties at DFW-area stores. Consumers may choose to
retain or remove RFID tags after purchasing the tagged HP products.
Wal-Mart's Linda Dillman and HP's Dick Lampman serve on the board
of directors of EPCglobal. Wal-Mart stores already feature signage
notifying consumers that electronic tagging systems unrelated to
EPC are in use for theft prevention measures. During the initial
RFID test, Dallas/Fort Worth metroplex Wal-Mart pilot stores will
feature supplemental signage to help customers further identify the
tagged HP products. These signs, featuring an EPCglobal symbol,
will be placed at relevant shelf and/or aisle locations. The
remaining 18 products that will be delivered to the store in tagged
cases or pallets for the test but will not be tagged individually
on the shelf include various brands of paper towels, lotion, cat
food, shampoo, feminine hygiene products, laundry detergent,
deodorant, shaving cream, soap, toothpaste and peanuts. About
Wal-Mart Stores, Inc. Wal-Mart Stores, Inc. operates Wal-Mart
Stores, Supercenters, Neighborhood Markets and SAM'S CLUB locations
in the United States. Internationally, the company operates in
Puerto Rico, Canada, China, Mexico, Brazil, Germany, United
Kingdom, Argentina, and South Korea. The company's securities are
listed on the New York and Pacific stock exchanges under the symbol
WMT. In Texas alone, Wal-Mart Stores, Inc. employs more than
130,000 Associates and operates 92 Wal-Mart discount stores, 196
Supercenters, 26 Neighborhood Markets, 69 SAM'S CLUB locations and
12 distribution centers.
http://www.newscom.com/cgi-bin/prnh/20010831/WALMARTLOGO
http://photoarchive.ap.org/ DATASOURCE: Wal-Mart Stores, Inc.
CONTACT: Gus Whitcomb or Christi Gallagher, both of Wal-Mart
Stores, Inc., +1-479-273-4314 Web site:
http://www.walmartstores.com/ http://www.epcglobalinc.org/consumer
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