WAL-MART EXPANDS RFID/EPC PROGRAM 2004-06-28 (2)

MICHAEL GARRY

BENTONVILLE, Ark. -- In a series of recent briefings with its top suppliers, Wal-Mart Stores here announced expanded plans regarding its electronic product code (EPC) initiative using RFID (radio frequency identification) technology.

"We discussed implementation plans with our next top 200 suppliers," said Linda Dillman, executive vice president and chief executive officer for Wal-Mart. "Over the next 16 months, we also plan to significantly increase the number of Wal-Mart stores and Sam's Clubs where customers can benefit from this revolutionary technology."

Wal-Mart launched its initial implementation on April 30 in the North Texas area with RFID-tagged cases and pallets of 21 products from eight suppliers being shipped to Wal-Mart's Sanger, Texas, distribution center, then onward to seven local supercenters. The technology allows Wal-Mart to track the movement of shipments from supplier to distribution center to a store's back room. The primary consumer benefit expected during initial EPC adoption is better merchandise availability.

The company's top 100 suppliers -- plus 37 additional suppliers -- are working toward meeting a January 2005 deadline to be live in North Texas in three DCs and about 100 stores.

Following that, the retailer said it planned to be live in up to six DCs and 250 Wal-Mart stores and Sam's Clubs by June 2005, and-up to 13 DCs and 600 Wal-Mart stores and Sam's Clubs by October 2005. In addition, the next top 200 suppliers will begin tagging cases and pallets by January 2006, Wal-Mart said.

The retailer is working with suppliers to determine in which geographical region the expanded EPC implementation will occur.

Meanwhile, Wal-Mart said its Dallas pilot is progressing as planned. "We're seeing the positive results we expected," Dillman said. "We also anticipated hitting a few minor bumps in the road, which has happened. The whole reason for a pilot is to fix any last-minute issues and clear the path for a smooth implementation. That's what we're doing, and we're looking forward to January 2005 with great expectations."

Wal-Mart expects the number of suppliers tagging cases and pallets for the pilot to expand every few weeks. In addition, consumers may soon see more products displaying the EPCglobal symbol, indicating the packaging has been tagged. The company said it expected many of these will be electronic products or other large items, such as bicycles or lawnmowers.

In all instances, the products will have tags only on the outermost packaging. Wal-Mart will notify consumers of the tag's existence, and customers will retain the choice of keeping or disposing of the tag after purchase.