BALTIMORE -- Albertsons met with its top 100 suppliers last month at its Boise, Idaho, headquarters to discuss plans for an RFID (radio frequency identification) program that will be launched in April and will continue throughout 2005 in its Dallas/Fort Worth division.
John Raudabaugh, vice president of system implementation, Albertsons, referred to the meeting in a panel discussion at the EPCglobal U.S. Conference 2004 held at the Baltimore Convention Center Sept. 28 to 30. The conference, hosted by EPCglobal U.S., Lawrenceville, N.J., focused on the adoption of RFID systems using the EPC (electronic product code), a digital product ID system.
"We're going to partner with our suppliers in the implementation," Raudabaugh said. "We have to be sensitive to their needs as we go forward. We're excited to get started."
Albertsons' suppliers will be expected to attach RFID tags to pallets and cases of products shipped to Albertsons' Dallas area distribution center. The tags, which contain an EPC (electronic product code) that identifies the pallet or case to which it is attached, will be automatically read by stationary RFID readers located at dock doors at Albertsons' DC and stores. The tags will not be applied to items at this time.
"The use of RFID will track the flow of the merchandise in and out of our store back rooms and thus help the company provide its customers with the assurance that the products they desire are on the shelf in adequate quantities when they visit their neighborhood Albertsons store," said Karianne Cole, spokeswoman for Albertsons.
Albertsons' program, originally announced in March, is similar to one begun this year by Wal-Mart in the Dallas market, as well as to one reportedly planned by Target, also for Dallas. Albertsons has selected "several stores" in the Dallas/Fort Worth division for the RFID test, said Cole.
Raudabaugh characterized Albertsons RFID strategy as that of a "fast follower." He said the technology "still had a lot to prove so we want to give it time to settle down." At the same time, he added, Albertsons will support the efforts of EPCglobal, the year-old standards body responsible for the commercialization and standardization of EPC-based RFID technology, not just for retailing and CPG companies but for other industries, including defense, automotive, high-tech and healthcare.
EPCglobal is a joint venture of the Uniform Code Council, Lawrenceville, N.J., and Brussels-based EAN International, the two major bar code organizations that plan to merge under the GS1 name in January.
Raudabaugh was one of many speakers at the conference, particularly manufacturers, who referred to the relative immaturity of EPC-based RFID technology, which is still under development, both in terms of technology and standards creation. The next generation of standards for EPC and related technologies such as tags and readers, the so-called Generation 2, is expected to be ratified by EPCglobal's board by November.
However, Raudabaugh also spoke of the potential impact of RFID technology on supply chain visibility and connecting isolated parts of the supply chain. "In the real world, for many years, we've had many silos in our supply chain," he said. "This is about taking all the silos and bringing them together." By silos, he was referring to not only suppliers, but also transportation, warehousing and retail stores.
He also stressed the importance of getting beyond software and hardware considerations and "changing the business processes around the technology. That's where all the fruits and benefits will come from."