TARGET ASKING FOR RFID TAGS ON PALLETS 2004-03-01 (1)

MATT KELLY

MINNEAPOLIS -- Target Corp. here is asking its largest suppliers to start attaching RFID (radio frequency identification) tags to pallets and cases of goods delivered to its regional distribution centers by next spring.

Target has thus become the third major retail company to issue such a request to its suppliers. In January at the National Retail Federation conference in New York, Metro Group, Dusseldorf, Germany, announced it will have its top 100 suppliers affix RFID tags to pallets and cases, beginning this November. Last year, Wal-Mart Stores ordered its largest 100 suppliers to start using RFID tags on crates and pallets by next January, with the rest following suit by January 2006. The Department of Defense has made a similar request to its suppliers.

Target declined to say how many suppliers will be affected immediately by its RFID order. The company did confirm that a letter was sent to suppliers last week by Paul Singer, Target's chief information officer, announcing that the 1,200-store retailer wants to use RFID-tagged pallets and cases a little more than one year from now.

"As we plan our technological strategic direction for 2004, we will move forward to build our supply chain infrastructure to support RFID," Singer said in the letter. "We will make the best use of these technologies to benefit all our partners in the retail supply chain."

By placing RFID tags containing the EPC (electronic product code) on pallets and cases, suppliers and retailers will be able to track product movement continuously and automatically through the supply chain. Standards for the EPC are still being developed.

Target spokeswoman Lena Klofstad declined to say when Target will unveil more specifics about its RFID program, although she said the company has no plans to use individually tagged items -- criticized by consumer and privacy activists -- any time soon.

Spokesmen for Gillette and Procter & Gamble, two large manufacturers affected by Target's mandate, said the companies will work with Target as necessary to meet the deadline. Gillette already has its own RFID pilot project and P&G expects to launch at least one.