RETAIL SYSTEMS 2006

MICHAEL GARRY

CHICAGO - As Piggly Wiggly Carolina, Charleston, S.C., prepares for an RFID test next year, Rachel Bolt, assistant director of information services, is encouraging more small-to-medium retailers to get started with the technology.

"RFID is for all retailers, not just the big boys," she said during a panel discussion at the Retail RFID Technology Symposium, held here last week at the Retail Systems 2006 Conference & Exposition. Small-to-medium retailers, she added, "can come together as a unit and join the bandwagon for this initiative and we can make a difference."

RFID, the much ballyhooed technology that uses radio frequency tags and readers to track pallets, cases and individual products in the supply chain, has been pioneered by Wal-Mart Stores, Bentonville, Ark., along with other large retailers such as Target, Tesco and Metro Group. Some other food retailers have begun testing the technology, but most are taking a wait-and-see approach.

But Bolt insisted that CPG manufacturers, who have been putting tags on shipments headed to Wal-Mart and other large retailers, might take note of greater retailer participation. "If we can unify as retailers to show the value to suppliers, then perhaps Kimberly-Clark could begin tagging 100% of its products," she said. Kimberly-Clark's senior supply chain consultant, Larry Roth, was a co-panelist with Bolt.

Bolt described Piggly Wiggly, which operates one distribution center along with 114 stores, as offering a "perfect opportunity" for testing RFID technology. "I can just put readers in three receiving doors" to start testing the technology," she said. "Other retailers my size should be just as nimble."

Bolt noted that this was her second RFID presentation. "I'm happy to get the word out there to smaller retailers, my peers." Afterward, she told SN, "I give talks so other retailers will go back to their companies and say, 'We ought to start thinking about this.'"

For the moment, though, retailers continue to move at a modest pace with RFID, according to a new survey conducted by Retail Systems Alert Group, Newton Upper Falls, Mass., and sponsored by NCR, Atlanta. "Retailers are lagging far behind manufacturers in adopting RFID," according to the survey. "Only 9% of retailers who responded to the survey have an RFID implementation timeline."

As for Piggly Wiggly's own plans, the chain plans to begin piloting RFID technology that incorporates the electronic product code (EPC) at its DC in 2007, Bolt said. The company needs first to complete an upgrade of its warehouse management system so that it can accommodate advance shipping notices (ASNs). "There are foundational pieces that must be in place to participate in RFID," she said. When the WMS upgrade is completed in August, it will also be RFID-capable, she added.

The ability to synchronize data with suppliers via the Global Data Synchronization Network is another foundational piece, Bolt said. Piggly Wiggly began synchronizing data a month ago with its first supplier, Kraft.

Piggly Wiggly has identified product receiving at its DC as a labor-intensive process that would benefit from the automation provided by RFID. "We pay a receiving clerk to count every product that comes off the truck," Bolt said. RFID, which would automatically count incoming product, "is an opportunity to take the human element out of receiving. It's like good-faith receiving without the faith."

ASNs will also allow the retailer to begin receiving goods without manual counts, though occasional audits would be employed, she noted. RFID would add extra visibility into the process.

Bolt also sees ASNs - and ultimately RFID - helping to expedite direct-store-delivery receiving at stores. It would allow DSD suppliers to drop orders at any time, eliminating the receiving process, and relieving congestion caused by multiple vendor deliveries.