Wal-Mart Case Study RFID and Supply Chain Management

FINAL PAPER

y !r"up #

!r"up Mem$ers: Angrish, Sangita Chivukula, Venkata S. DeWitt, Brendon Patel, Raxesh Shamsi, Shaze !ella"ragada, Rama#handra

Date% N"&em$er '() #((*

+a$le ", C"ntents

INTRODUCTION..........................................................................................................................................4 WHY RFID OVER BAR-CODE?.....................................................................................................................4 RFID INFRASTRUCTURE...............................................................................................................................5 INTRODUCTION TO SUPPLY CHAIN MANAGEMENT.....................................................................7 WAL-MART INTRODUCTION AND ITS BUSINESS PROCESSES....................................................9 OPERATIONS.................................................................................................................................................9 BUSINESS MODEL.......................................................................................................................................10 Market Strategy of Wal-Mart................................................................................................................10 Organizational Development................................................................................................................10 Competitive Advantage.........................................................................................................................11 Market Opportunity..............................................................................................................................11 SUPPLY CHAIN MANAGEMENT AT WAL-MART.........................................................................................11 Pro urement and Di!tri"ution..............................................................................................................11 #ogi!ti ! Management..........................................................................................................................1$ %nventory Management.........................................................................................................................1$ RFID IN WAL-MART.................................................................................................................................13 EFFICIENCY IN SUPPLY CHAIN WITH RFID................................................................................................14 WAL-MART SUPPLIERS..............................................................................................................................15 &im"erly-Clark ....................................................................................................................................1' &raft (ood!...........................................................................................................................................1' )illette..................................................................................................................................................1' CURRENT USAGE OF RFID....................................................................................................................15 RFID IN MILITARY.....................................................................................................................................16 SUCCESSFUL RFID IMPLEMENTATION IN DIFFERENT INDUSTRIES.............................................................16 *olk!+agen...........................................................................................................................................1, Supermarket trie! out !mart tagging....................................................................................................1, Sun Mi ro!y!tem! !et! up -(%D te!t entre in S otland.......................................................................1, %...M. /0pand! /ffort! to Promote -adio 1ag! to 1ra k )ood!.........................................................1, 1e0a! %n!trument!.................................................................................................................................1, /PC glo"al 2et+ork.............................................................................................................................13 LIMITATIONS AND CHALLENGES OF RFID.....................................................................................18 FUTURE OF RFID.......................................................................................................................................2 FUTURE APPLICATIONS.............................................................................................................................. 0 REFERENCES!............................................................................................................................................22

Wal$%art R&'D, A Case Stud( &all )**+

Intr"du-ti"n
,e#hnolog( is inevita le in ever( s"here o- li-e toda(. it has al/a(s made things easier. Wal$%art /orks on the same strateg(, -rom the a ove des#ri"tion. /e #an understand ho/ diversi-ied Wal$%art is and the volume o- #argo it needs to handle -or ea#h o- its usiness0s. ,raditionall(, it had started /ith #om"uterization oindividual stores /ith small illing ma#hines and had then led to #entralized illing -or re#ord kee"ing. ,he te#hnolog( has gro/n ( lea"s and ounds and has e#ome in#reasingl( #hallenging to maintain large data ases o- in-ormation and maintain re#ords. Po/er-ul #om"uters net/orked /ith high "er-orman#e #lusters maintain and store this data. ,his gives a "i#ture as to ho/ te#hnolog( "la(s a vital role in toda(0s0 usinesses. ,raditionall(, te#hnolog( has een u"graded in illing s(stems and -or storage "ur"oses. A ne/ area /here te#hnolog( #ould e a""lied to, /here man( ex"enses #ould e saved /as in inventor( management and logisti#s. Wal$%art eing so huge, needed to kee" tra#k o- men and material sent a#ross di--erent #ountries and had to maintain hundreds o- /arehouses a#ross the /orld. Bar$#odes have een initiall( identi-ied as a suita le te#hnolog( to meet the "ur"ose. But due to the limitations o- ar#odes, a ne/ emerging te#hnolog( #alled R&'D has een identi-ied to meet the demands. R&'D is lo/ #ost Radio &re1uen#( 'denti-i#ation s(stem /hi#h re1uires minimum human intervention to #arr( out tasks ranging -rom illing to materials tra#king and su""l( #hain management. 't is a small /ireless devi#e /hi#h #an store good amount o- data and #an virtuall( e tagged to an(thing. R&'D is an ele#troni# tagging te#hnolog( as sho/n in -igure 2 that allo/s an o 3e#t, "la#e, or "erson to e automati#all( identi-ied at a distan#e /ithout a dire#t line$o-$ sight, using an ele#tromagneti# #hallenge4res"onse ex#hange.

Fig .% RFID De&i-es 5Source: The Magic of RFID, Roy Want, INTEL RESEARCH, Octo er !""#

Why RFID over Bar-Code?

,he a ilit( to read /ithout line$o-$sight is the est advantage o- R&'D over ar$#ode s(stems. R&'D readers #an sense items even /hen the tagged items are hidden ehind other tagged items. ,his ena les automation. ,he #hallenging "art oim"lementing R&'D is that tagged items should not e missed ( the reader due to inter-eren#e, multi"ath -ading, transient e--e#ts et#. %issed reads are an un-ortunate realit( /ith R&'D s(stems. R&'D uses a serialized num ering s#heme su#h as 7PC 87le#troni# Produ#t Code9. 7a#h tag has a uni1ue serial num er. Serial num er Page : o- );

Wal$%art R&'D, A Case Stud( &all )**+

in-ormation is extremel( "o/er-ul in understanding and #ontrolling the su""l( #hain and "rovides mu#h more detailed ehavior o- the su""l( #hain than #an non$ serialized ar #odes su#h as <PC 8<niversal Produ#t Codes9 and 7A= 87uro"ean Arti#le =um ering9. Serial num ers have man( advantages su#h as -ood -reshness4ex"iration. ,his #an tell ho/ -or ho/ long an item has een in the su""l( #hain /here as su#h in-ormation is not #a"tured in ar #ode s(stem. >en#e items #an e rea#hed the right "la#e at the right time. &urthermore R&'D im"lementation monitors the-t too. &or exam"le i- num er o- items rea#hed at the retailer0s outlet is less than that /as de"arted -rom su""lier0s lo#ation, it #an e easil( tra#ked -or. 'n all these /a(s, R&'D s(stems have stronger sensor net/orking s(stem or monitoring s(stem than ar #ode s(stems.

RFID Infrastructure
%an( so-t/are s(stems used in enter"rise s(stems toda( are not designed to handle serial num ers as re1uired ( the R&'D s(stems. ,he "ro lem in s(n#hronizing R&'D s(stems to so-t/are s(stem #an e est des#ri ed as the "ro lem in s(n#hronizing a s"eaker to a hi$-i am"li-ier. '- the hi$-i am"li-ier is not s(n#hronized to s"eaker there /ill e distortion in sound signal. ?ike /ise there /ill e mismat#h in #a"a ilities and re1uirements i- R&'D s(stem is not s(n#hronized /ith enter"rise so-t/are "ro"erl(. A solution to this "ro lem is to introdu#e a la(er et/een R&'D readers and the a""li#ation so-t/are #ommonl( kno/n as R&'D middle/are. 't has t/o levels o-un#tionalit(: a lo/er level devi#e and data management and a higher level inter"retation level. Data management la(er "rovides some -un#tionalit( o- -iltering o- data due to intermittent a""earan#es and disa""earan#es. ,his #an e a#hieved ( setting some time threshold levels. &or exam"le (ou #ould tell the so-t/are to re#ord tags as missing onl( a-ter the( have not een seen -or a #ertain num er o- se#onds. ,his is im"ortant e#ause i- the reader #annot read #ertain tags due to inter-eren#e o#ertain o 3e#ts, the so-t/are should not #on#lude that the tagged item is eing sold or stolen. ,his me#hanism /ould redu#e -alse reads. Devi#e management is one o- the most #hallenging "art o- R&'D im"lementation. R&'D readers intera#t /ith other devi#es su#h as motion sensors, "rogramma le logi# arra(s and human inter-a#es. R&'D readers o"erate in 'S% 8'ndustrial, S#ienti-i# and medi#al9 ands at 2;.+@ megahertz, A2+ megahertz and ).:+ megahertz. Be#ause im"lementing R&'D is an extensive u i1uitous task, there is a #om"li#ation o- di--erent and/idth standards around the /orld. &or exam"le, Ba"an has ver( di--erent and/idth standard than <.S.A. Se#urit( intrusion is also an issue in R&'D de"lo(ment e#ause R&'D readers o"erate automati#all( unlike ar #ode s#anners /hi#h are o"erated ( humans.

Page + o- );

Wal$%art R&'D, A Case Stud( &all )**+

Fig #% +/" Le&els ", Fun-ti"nality $Source: Integrating RFID, San%ay Sar&a, Oat'y'te&' an( MIT, Octo er !""#)

A-ter the data management la(er (ields data, the data inter"retation la(er must extra#t in-eren#e -rom su#h data and -or/ard it to the a""li#ations that de"lo( R&'D. ,his in-eren#e me#hanism is a ver( so"histi#ated task. &or exam"le i- a tagged "allet #arr(ing tagged items out o- the door should not e #on-used /ith the one that 3ust "asses ( the door and does not go outside it. ,his high level o- reasoning involves a lot o- in-eren#es and asso#iations. ,ags #an e asso#iated /ith ea#h other /hen the( are assem led. 'ntegrating R&'D into the enter"rise is one task ut extra#ting value -or the enter"rise at the s(stemi# level is another #hallenging task /hi#h re1uires lot o#ontrol and e--ort.

Fig '% Ar-hite-ture /ith Independent EPC 0isi$ility Layer $Source: Integrating RFID, San%ay Sar&a, Oat'y'te&' an( MIT, Octo er !""#)

,he 7PC visi ilit( la(er kee"s tra#k o- R&'D data in man( level o- detail. ,he ar#hite#ture -or su#h a s(stem #an e sho/n as in -igure ).,he enter"rise 7PC s(stems #an then e a single sour#e o- all 7PC data. ,he enter"rise s(stem #an kee" a true and multi resolution re#ord o- all 7PC data "ermitting di--erent a""li#ations to

Page @ o- );

Wal$%art R&'D, A Case Stud( &all )**+

a##ess 7PC data at the a""ro"riate resolution. ,he Auto$'D #enter has develo"ed a so-t/are #alled savant /hi#h serves as the edge and the enter"rise so-t/are. ,he( also uilt a "rotot("e o- the C=S. 7PCglo al o"erates C=S. 7PCglo al also sell 7PC #odes to users /ho /ant to "la#e 7PC tags on their "rodu#ts. 7PCglo al run a num er o- hard/are and so-t/are modules o- the 7PC s(stem. ,he 7PCglo al s(stem in#ludes a num er o- standards -or #ommuni#ating /ith readers, -or middle/are othe edge, and -or the edge and enter"rise 7PC s(stems. ,his emergen#e o- 7PCglo al s(stem has #hanged the /a( su""l( #hain is o"erated toda(.

Intr"du-ti"n t" Supply Chain Management

Su""l( #hain management 8SC%9 is the #oordination o- a net/ork o- -a#ilities and distri ution o"tions that "er-orms "ro#urement o- materials, "ro#essing the materials into -inished "rodu#ts, and distri ution o- the "rodu#ts to #ustomers. SC% is seen as involving -ive #ore "ro#esses. ,hese in#lude "lanning, sour#ing, making, delivering, and returning.

Fig 1% +ypi-al supply -hain sh"/ing interrelati"ns $et/een all in&"l&ed parties2 $Source: Auto* ID: Managing Anything, Any+here, Anyti&e in the Su,,-y Chain, .o'e an( /a-, ACM Augu't !""0)

SC% exists in oth servi#e and manu-a#turing environments. A t("i#al su""l( #hain #onsists o- man( intera#tions et/een su""liers, manu-a#turers, distri utors, retailers, /ith the ultimate goal o- "roviding either a servi#e or a "rodu#t to #ustomers. ,his also /orks in reverse /ith the #ustomer at the head o- the "ro#ess /hen returning a "rodu#t. SC% is used as a means to integrate "lanning, "ur#hasing, manu-a#turing, distri ution, and marketing organizations that normall( do not /ork together to a#hieve a #ommon goal. 7a#h /orks to/ard goals s"e#i-i# to their o/n organization that a##om"lish narro/ o 3e#tives. SC% is a /a( o- integrating these var(ing -un#tions so that the( /ork together to maximize the ene-its -or all involved.

Page D o- );

Wal$%art R&'D, A Case Stud( &all )**+

,here are three levels o- SC%: strategi#, ta#ti#al, and o"erational.

Fig *% +hree Le&els ", SCM $Source: Auto*ID: Managing Anything, Any+here, Anyti&e in the Su,,-y Chain, .o'e an( /a-, ACM Augu't !""0)

Strategi# SC% deals /ith -uture "lanning than in looking at market evaluation, #a"a#it( issues, ne/ "rodu#ts, and te#hnolog( #hanges. ,his "lanning is addressing issues that ma( e -a#tors several (ears out. ,his is a##om"lished at the exe#utive management level. ,a#ti#al SC% involves a shorter "lanning #(#le. 't is more #on#erned demand "lanning, inventor( "lanning, and su""l( "lanning. ,his is determined at a less senior level than Strategi# SC%. C"erational SC% is #urrent "lanning a#tivities measured in at most /eeks. C"erational SC% involves the ma3orit( o- the o"erations. 't in#ludes demand -ul-illment, s#heduling, "rodu#tion, trans"ort, and monitoring. ,here are man( de#isions that are made /hen looking at SC%. ,he( -ollo/ the a ove #ategories. Strategi# de#isions are made over longer "eriods o- time and linked to a #or"oration0s strateg(. C"erational de#isions are more short term and look at da( to da( a#tivities. &our ma3or de#isions are #onsidered. ,he in#lude de#isions on lo#ation, "rodu#tion, inventor(, and trans"ortation. A geogra"hi#all( strategi# "la#ement o- the "rodu#tion -a#ilities is ke( to #reating a su##ess-ul su""l( #hain. De#isions on /hat "rodu#ts to e "rodu#ed have to e made /isel( and strategi#all(. Also, /here these "rodu#ts 8/hi#h lo#ations9 /ill e manu-a#tured is ver( im"ortant to SC%. 'nventor( de#isions and management is #riti#al. Some inventories are ne#essar( to hedge against un#ertaint(, ut this #omes /ith a #ost. %anaging these inventories e--i#ientl( /ill e oene-it to the #or"oration. ,rans"ortation de#isions in#lude #ost versus ene-it. Air trans"ortation is #ostl(, ut -ast and relia le. Cther modes o- trans"ortation ma( e #hea"er, ut the sa#ri-i#e is having to hold inventories due to dela(s that ma( o##ur. '- the a ove de#isions are made /ith #are-ul and strategi# thought as /ell as /ith #on#ern -or integration, the su""l( #hain should e e--i#ient and su##ess-ul. ,he overall goal o- SC% is to o"timize su""l( #hains in an attem"t to "rovide a##urate and time sensitive in-ormation that #an e used to im"rove "ro#ess and #ut #osts. Su""l( #hains have een around -or de#ades and a #onstantl( im"roved. ,he ne/est o""ortunit( -or im"rovement is the introdu#tion omore times eing radio

Page E o- );

Wal$%art R&'D, A Case Stud( &all )**+

-re1uen#( identi-i#ation 8R&'D9 tags. R&'D te#hnolog( /ill "rovide real$time in-ormation that /ill allo/ manu-a#turers to get etter readings o- #ustomers and markets thus -urther im"roving su""l( #hains. R&'D /ill hel" retailers "rovide the right "rodu#ts at the right "la#es at the right times. <ltimatel(, maximizing sales and "ro-its Wal$%art has een leading the #harge /ith R&'D te#hnolog(. >aving the largest retailer ado"t and egin to use R&'D te#hnolog( has given strong a#king to the te#hnolog( and /ill onl( -urther and 1ui#ken the ex"ansion o- R&'D. ,he( have egun re1uiring all their ma3or su""liers to im"lement R&'D te#hnolog( on all "rodu#ts su""lied to Wal$%art. Cne exam"le o- /hat Wal$%art has done /ith SC% and its su""liers is that o- its relationshi" /ith Pro#tor F Gam le. ,hese t/o uilt a so-t/are s(stem that hooked Pro#tor F Gam le u" to Wal$%art0s distri ution #enters. ,his s(stem /ould then monitor su""l( levels and /hen "rodu#ts run lo/, automati# alerts are sent out to re1uire the shi"ment o- more "rodu#ts to that distri ution #enter. Wal$%art has taken this as -ar as going to the individual store lo#ations. ,he shelves are monitored in real time via satellite links that send inventor( messages /henever Pro#tor F Gam le "rodu#ts are s#anned at a register. ,his allo/s Pro#tor F Gam le to e -ull( a/are o- u" to the minute "rodu#t inventories at the a#tual store lo#ations and shi" additional "rodu#ts as ne#essar(. ,his #on#e"t is a huge ste" in making SC% as e--i#ient as it #an e.

Wal-Mart Intr"du-ti"n and its

usiness Pr"-esses

Wal$%art is one o- the largest &ortune +** #om"anies, /hi#h is s"read a#ross the glo e. 't is an argua l( the largest retail #hain /hi#h deals /ith ever(thing -rom -ood to #onsumer ele#troni#s. 'n terms o- the revenue generated, it leads the -ortune +** #om"anies like G7 and %i#roso-t. Sim"l( "ut, it has ever(thing a homemaker #an ever think o-. A--orda le "ri#e range #ou"led /ith aggressive online and market strateg( has lead to /ide a##e"tan#e -or Wal$%art in to/ns and #ities alike. Wal$ %art is "ro a l( the onl( largest -ortune +** #or"orations in the /orld, /hi#h dire#tl( servi#es the #ommon man.

Operations
Wal %art o"erations are #om"rised o- three usiness segments: Wal$%art Stores SA%0S C?<B Wal$%art 'nternational. Wal$%art Stores segment is the largest segment, /hi#h a##ounted -or a""roximatel( @D.;H o- their )**+ -is#al sales. ,his segment #onsists o- three di--erent retail -ormats, all o- /hi#h are lo#ated in the <nited States. ,his in#ludes the -ollo/ing se#tions: I Su"er$#enters, /hi#h average a""roximatel( 2ED,*** s1uare -eet in size and o--er a /ide variet( o- "rodu#ts and a -ull$line su"ermarket.

Page A o- );

Wal$%art R&'D, A Case Stud( &all )**+

I Dis#ount Stores, /hi#h average a""roximatel( 2**,*** s1uare -eet in size and o--er a /ide variet( o- "rodu#ts and a limited sto#k o- -ood "rodu#ts. and I =eigh orhood %arkets, /hi#h average a""roximatel( :;,*** s1uare -eet in size and o--er a -ull$line su"ermarket and a limited variet( o- general mer#handise. SA%0S C?<B segment #onsists o- mem ershi" /arehouse #lu s in the <nited States /hi#h a##ounted -or a""roximatel( 2;.*H o- )**+ -is#al sales. SA%0S C?<Bs in the <nited States average a""roximatel( 2)E,*** s1uare -eet in size. Wal$%art 'nternational o"erations are lo#ated in Argentina, Canada, German(, South Jorea, Puerto Ri#o and the <nited Jingdom, the o"erations o- 3oint ventures in China and o"erations o- ma3orit($o/ned su sidiaries in Brazil and %exi#o. ,his segment generated a""roximatel( 2A.DH o- )**+ -is#al sales. >ere, it o"erates several di--erent -ormats o- retail stores and restaurants, in#luding Su"er$#enters, Dis#ount Stores and SA%0S C?<Bs. &or the -is#al (ear ending Banuar( ;2, )**+, Wal$%art to""ed K2* illion in net in#ome -or the -irst time in their histor( and added almost K)A illion in sales.

Business Model
A Business model is #entral to an( su##ess-ul usiness. Wal$mart is no ex#e"tion. Wal$mart has al/a(s een innovating and im"roving its usiness model to suite its organizational goals and also meet #ustomer re1uirements, and so has managed to sta( on to" (ear a-ter (ear. Wal$mart has em"lo(ed a mixed$ usiness model -or its usiness -or the same. ,o understand the Business models used ( Wal$%art, -irst it is im"ortant to kno/ the -a#tors, /hi#h go in de-ining those models, and ho/ does it relate to Wal$%art s"e#i-i#all(. %arket Strateg( o- Wal$%art Wal$%art stresses mainl( on their 7ver(da( ?o/ "ri#es 8L7D?PM9 "ri#ing "hiloso"h(, in /hi#h the( "ri#e items at a lo/ "ri#e ever( da( that uilds F maintains #ustomers trust in their "ri#ing. Sin#e the( em"lo( oth the L#li#ks and ri#ksM and L ri#ks and mortarM methods to market their "rodu#ts, #onsumers get to #hoose their "rodu#ts either the traditional /a( or online an(time o- the da(. ,hough Wal$%art has not advertised in Advertising, as man( o- its #om"etitors do, the trust "eo"le have uilt on the Wal$%art rand has taken them -ar -rom their #om"etitors. Crganizational Develo"ment Wal$%art has restru#tured organizational needs. S"e#ialt( Division $ ,ire F ?u e 7x"ress $ Wal$%art C"ti#al its usiness into t/o "arts to handle s"e#i-i#

Page 2* o- );

Wal$%art R&'D, A Case Stud( &all )**+

$ $ $ $

Wal$%art Pharma#( Wal$%art Va#ations Wal$%artNs <sed &ixture Au#tions Wal$%art Alaska Bush Sho""er

Retail Division - W!"-M!#$ S$%#&' - S()&# *&+$&#' - SAM,S CLUBS - N&-./0%#/%%1 M!#2&$ - I+$&#+!$-%+!" 3!"4!#$.*%4 Com"etitive Advantage Wal$%art has een an undis"uted leader in o--ering the markets lo/est "ri#es to #onsumers. 't has al/a(s given a L"ri#e mat#h guaranteeM, and has #hallenged other stores to o--er lesser "ri#es and has agrees to reim urse the di--eren#e, the di--eren#e o- "ri#e i- an(. =o other store #ould meet this and Wal$%art has een leading the "a#k -or (ears. %arket C""ortunit( Wal$%art em"lo(s a #om ination o- t/o Business %odels viz. .!. Sing-e fir& net+or1 .u'ine'' Mo(e- O SA%0S C?<B segment o- Wal$%art su""orts small usinesses. 'ts main -o#us in this segment is to #reate its o/n net/ork o- trusted "artners to #oordinate su""l( #hains and "rovide ex#e"tional value on rand$name mer#handise at L%em ers Cnl(M "ri#es. .!C E*Tai-er .u'ine'' Mo(e- O Wal$%art uses L#li#ks and ri#ksM methodolog( to "rovide millions o- its #ustomers online version o- its retail store, /here #ustomers #an sho" at an( hour o- the da( or night /ithout leaving their home or o--i#e. Wal$%art em"lo(s Sales revenue model as it is mainl( involved in sale o- goods and servi#es. ,hese t/o models hel" Wal$%art in a#hieving its usiness "ers"e#tives related to its -irms organizational needs and the se#ond hel"s in its intera#tion /ith the #ustomer and manages goods and servi#es o--ered ( Wal$%art to the end users.

Supply Chain Manage

ent at Wal-Mart

Su""l( #hain management at Wal$%art #an e des#ri ed in ; se#tions. Pro#urement and Distri ution Wal$%art0s "ro#ess o- "ro#urement involves redu#ing its "ur#hasing #osts as -ar as "ossi le so that it #an o--er est "ri#e to its #ustomers. ,he #om"an( "ro#ures goods dire#tl( -rom the manu-a#turers, ("assing all intermediaries.

Page 22 o- );

Wal$%art R&'D, A Case Stud( &all )**+

Wal$%art has distri ution #enters in di--erent geogra"hi#al "la#es in <S. Wal$%art0s o/n /arehouses su""lies a out E*H o- the inventor(. 7a#h distri ution #entre is divided in di--erent grou"s de"ending on the 1uantit( o- goods re#eived. ,he inventor( turnover rate is ver( high, a out on#e ever( /eek -or most o- the items. ,he goods to e used internall( in <S arrive in "allets F im"orted goods arrive in re$ usa le oxes. ,he distri ution #enters ensured stead( -lo/ F #onsistent -lo/ o- "rodu#ts. %anaging the #enter is e#onomi#al /ith the large$s#ale use o- so"histi#ated te#hnolog( su#h as Bar #ode, hand held #om"uter s(stems 8%agi# Wand9 and no/, R&'D. 7ver( em"lo(ee has a##ess to the re1uired in-ormation regarding the inventor( levels o- all the "rodu#ts in the #enter. ,he( make ) s#ans$ one -or identi-(ing the "allet, and other to identi-( the lo#ation -rom /here the sto#k had to e "i#ked u". Bar #odes F R&'D are used to la el di--erent "rodu#ts, shelves F ins in the #enter. ,he hand held #om"uters guide em"lo(ee to the lo#ation o- the s"e#i-i# "rodu#t. ,he 1uantit( o- the "rodu#t re1uired -rom the #enter is entered in the hand held #om"uter, /hi#h u"dates the in-ormation on the main #entral server. ,he #om"uters also ena led the "a#kaging de"artment to get a##urate in-ormation su#h as storage, "a#kaging F shi""ing, thus saving time in unne#essar( "a"er/ork. 't also ena les su"ervisors to monitor their em"lo(ees #losel( in order to guide them F give dire#tions. ,his ena les Wal$%art to satis-( #ustomer needs 1ui#kl( F im"rove level o- e--i#ien#( o- distri ution #enter management o"erations. ?ogisti#s %anagement ,his involves -ast F res"onsive trans"ortation s(stem. %ore than D*** #om"an( o/ned tru#ks servi#es the distri ution #enters. ,hese dedi#ated tru#k -leets ena les shi""ing o- goods -rom distri ution #enters to the stores /ithin ) da(s and re"lenish the store shelves t/i#e a /eek. ,he drivers hired are all ver( ex"erien#ed F their a#tivities are tra#ked regularl( through LPrivate &leet Driver hand ookM. ,his allo/s the drivers to e a/are o- the terms F #onditions -or sa-e ex#hange o- Wal$%art "ro"ert(, along /ith the general #ode o- #ondu#t. &or more e--i#ien#(, Wal$%art uses a logisti#s te#hni1ue #alled LCross Do#kingM. 'n this s(stem, -inished goods are dire#tl( "i#ked u" -rom the manu-a#turing site osu""lier, sorted out and dire#tl( su""lied to the #ustomers. ,his s(stem redu#es handling F storage o- -inished goods, virtuall( eliminating role o- distri ution #enters F stores. Be#ause o- L#ross$do#kingM the s(stem shi-ted -rom Lsu""l( #hainM to Ldemand #hainM /hi#h meant, instead o- retailers P"ushing0 the "rodu#ts into the s(stem, the #ustomers #ould P"ull0 the "rodu#ts, /hen F /here the( re1uired.

'nventor( %anagement Considering the ra"id ex"ansion o- Wal$%art stores, it /as essential to have a ver( good #ommuni#ation s(stem. &or this, Wal$%art set u" its o/n satellite #ommuni#ation s(stem in 2AE;. ,his allo/ed the management to monitor ea#h and ever( a#tivit( going on in a "arti#ular store at an( "oint o- the da( and anal(ze the #ourse o- a#tion taken de"ending on ho/ the things /ent.

Page 2) o- );

Wal$%art R&'D, A Case Stud( &all )**+

Wal$%art ensures that un"rodu#tive inventor( is as less as "ossi le, ( allo/ing the stores to manage their o/n sto#ks, there ( redu#ing "a#k sizes a#ross man( #ategories and timel( "ri#e markdo/ns. Wal$%art makes -ull use o- its ', in-rastru#ture to make more inventories availa le in #ase o- items that #ustomers /anted most, /hile redu#ing overall inventor(. B( making use o- Bar$#oding F R&'D te#hnologies, di--erent "ro#esses like e--i#ient "i#king, re#eiving F "ro"er inventor( #ontrol o- the "rodu#ts along /ith eas( "a#king and #ounting o- the inventories /as ensured. Wal$%art o/ns the L%assivel( Parallel Pro#essor 8%PP9M, largest F the most so"histi#ated #om"uter s(stem in "rivate se#tor, /hi#h ena les it to easil( tra#k movement o- goods F sto#k levels a#ross all distri ution #enters and stores. &or emergen#( a#ku", it has an extensive #ontingen#( "lan in "la#e as /ell. 7m"lo(ees use L%agi# WandM, /hi#h is linked to in$store terminals through a Radio -re1uen#( net/ork, to kee" tra#k o- the inventor( in stores, deliveries and a#ku" mer#handise in sto#k at the distri ution #enters. ,he order management and store re"lenishment o- goods is entirel( exe#uted /ith the hel" o- #om"uters through Point o- Sale 8PCS9 s(stem. Wal$%art also makes use o- so"histi#ated algorithm to -ore#ast the 1uantities o- ea#h item to e delivered, ased on inventories in the store. A Centralized inventor( data ase allo/s the "ersonnel at the store to -ind out the level o- inventories and lo#ation o- ea#h "rodu#t at a given time. 't also sho/s the lo#ation o- the "rodu#t like distri ution #enter or transit on the tru#k. When the goods are unloaded at the store, the inventor( s(stem is immediatel( u"dated.

RFID in Wal-Mart
Wal$%art had initiated its "lan to em"lo( R&'D te#hnolog( in its su""l( #hain in Bune )**;. Su se1uentl( Wal$%art rein-or#ed its "lans and a#tivel( asserted on de-ining the R&'D standards it /ill e im"lementing. ,he s"e#i-i#ation o- the -ollo/ing R&'D #om"onents /as laid out in =ovem er )**;. 7PC 87le#troni# Produ#t Code9 s"e#i-i#ation ,("e o- Chi" that /ould e installed ,he Distri ution #enters that /ill a##e"t R&'D tagged "rodu#ts A-ter the de-ining "hase, Wal$%art s"e#i-ied the R&'D re1uirements to its su""liers that the( should #om"l( /ith: 7PC: A@$ it /ith a Glo al ,rade 'denti-i#ation num er ,AGS: Should o"erate in <>& s"e#trum 8E@E %>z to A+@ %>z9 ,he ,AG /ill #arr( the A@$ it serial num er and /ill e -ield$"rogramma le, that /ill allo/ the su""liers to /rite serial num ers to the tags /hile eing a""lied to the "rodu#ts. 7PC O#om"liant tags in <>& and #onsists o- t/o main "arts: 7PC data -ormat on the #hi" Class* or Class2 #ommuni#ation "roto#ol Class* is a -a#tor( "rogramma le tag Class2 "rovides the #a"a ilit( to the end users to /rite serial num er on it Wal$%art "lanned to im"lement Class2 Version), a glo all( a##e"ted "roto#ol that in#or"orates oth s"e#i-i#ation o- Class* and Class2.

Page 2; o- );

Wal$%art R&'D, A Case Stud( &all )**+

'n addition, Wal$%art is "lanning to enhan#e mo ilit( to its existing R&'D tag readers ( im"lementing R&'D$ena led -orkli-t. ,hese readers /ill have the #a"a ilit( to read the tags on the "allets and transmit data through the R&'D net/ork, /hi#h /ould hel" the users to e etter in-ormed a out the su""l($#hain data.

!fficiency in Supply Chain "ith RFID

,he various #om"onents o- Su""l( Chain are: Pro#urement, Distri ution, ?ogisti#s and 'nventor( %anagement. Sin#e the #ore o- Wal$%art usiness is "er"etual im"rovement in its Su""l( Chain im"lementation, it elieves in Lno$#om"romiseM on im"lementing an innovative ', in-rastru#ture and strong #ommuni#ation s(stem as the( are the( the im"ortant links in the #hain -or a smooth -un#tioning o- the #om"lete s(stem. Wal$%art ta""ed R&'D te#hnolog( /ith an aim to in#rease the e--i#ien#( o- its su""l( #hain. ,his is e#ause R&'D im"lementation /ill enhan#e trans"aren#( o- their su""l( #hain and hen#e /ill hel" them minimize #ost and la or and /ill strengthen inventor( #ontrol. A##ording to Venture Develo"ment Cor"oration, LWith Wal$%art selling over K):+ illion /orth o- goods in -is#al (ear )**;, a 2H im"rovement in the out$o-$sto#k issue #ould generate nearl( K).+ illion in ver( "ro-ita le sales.M 'n addition, a stud( ( Cohen at Wharton #halks out the di--eren#e existing inventor( management and the R&'D ena led su""l( #hain. et/een the

L'n #urrent s(stems, (ou ma( kno/ there are 2* items on the shel-, and that in-ormation is #om"iled in an enter"rise "lanning so-t/are s(stem. With R&'D, (ou kno/ there are 2* items, their age, lot num er, and ex"iration date and /arehouse origin. Q'tNs like kno/ing there are 2,*** "eo"le in a #it(,Q sa(s Cohen. QWith R&'D, (ou kno/ their names.Q &rom the a ove studies it indi#ates that em"lo(ing R&'D te#hnolog( /ill hel" in im"lementing a seamless su""l( #hain and hen#e (ield "ro-its. ,he in#rease in their e--i#ien#( is evident -rom the ne/s arti#le at Breit art.#om, /here it states that im"lementation o- R&'D tags in Wal$%art0s inventor( has hel"ed oost sales ( kee"ing shelves etter sto#ked. <sage o- R&'D has redu#ed out$o-$ sto#k mer#handise ( 2@H at the stores that have im"lemented R&'D tags -or more than a (ear. ,he C'C at Wal$%art stated that, LWal$%art has een a le to resto#k R&'D$tagged items three times as -ast as non$tagged items.M 'n addition to im"roving the availa ilit( o- in$sto#k mer#handise, Wal$%art aims to redu#e the "ra#ti#e o- manuall( "la#ing the order and has a#hieved 2*H redu#tion in the #ase.

Page 2: o- );

Wal$%art R&'D, A Case Stud( &all )**+

,he re#ent studies sho/ that 2;* ma3or su""liers shi" mer#handise to Wal$%art distri ution #enters /ith a out +.: million tags. Wal$%art ex"e#ts to in#rease R&'D im"lementation ( adding another )** su""liers that are "ro3e#ted to su""l( to another 2*** stores. At "resent, Wal$%art is at a nas#ent state o- im"lementing R&'D. 'n addition to strengthening the Su""l( Chain, the largest retailer is also looking into di--erent dimensions /here R&'D #an e hel"-ul. As a "ilot test, Wal$%art is /orking on the data #olle#ted ( R&'D to anal(ze the #onsumer ehavior. A##ording to Venture Develo"ment Cor"oration, the ma3or im"lementation milestones o- R&'D at Wal$%art are to ex"and Regional and domesti# im"lementation o- R&'D throughout )**+. ,hese in#lude Regional Distri ution Centers, Gro#er( Distri ution Centers and Sam0s Clu Distri ution Centers in ,exas. And, ( )**@, Wal$%art aims to mandate R&'D im"lementation -or all its su""liers.

Wal-Mart Suppliers
Some o- the ma3or su""liers o- Wal$%art are: Gillette, >e/lett$Pa#kard, Bohnson F Bohnson, Jim erl($Clark, Jra-t &oods, =estle, Purina PetCare Com"an(, Pro#ter F Gam le and <nilever. Jim erl($Clark Jim erl( Clark is a manu-a#turer o- "a"er goods "rodu#ts that in#lude Jleenex, >uggies and De"end. 'n A"ril )**:, Jim erl( Clark tagged its S#ott "a"er to/els shi"ment /ith R&'D tags to e shi""ed to Sanger, ,exas. Jra-t &oods Jra-t &oods, the largest -ood #om"an( em"lo(s R&'D s(stem to im"rove handling oits ulk #ontainers. Jra-t has outsour#ed its R&'D s(stem to ,renStar to handle the #om"lete su""l( #hain. Gillette Smart razor lades have een introdu#ed to the su"ermarkets. Gillette has ordered hal- a illion tags to tra#k razors. ,he Gillette Com"an( uses R&'D -or oth "allet and #ase a""li#ations. All the #ases in a "allet are s#anned /ith R&'D readers as the( move along the #onve(or elt. 'n a trial at ,es#oNs ne/ market Road ran#h in Cam ridge, the "a#kaging o- Gillette %a#h; razor lades has een -itted /ith tin( #hi"s.

Current 3sage ", RFID

R&'D te#hnolog( is ra"idl( evolving and gro/ing, "roviding solutions to a /ide arra( o- "ro lems. %an( #om"anies are -inding value in im"lementing R&'D s(stems toda( es"e#iall( /hen it is a""lied to solve more realisti# su""l( #hain "ro lems. ,he ke( Page 2+ o- );

Wal$%art R&'D, A Case Stud( &all )**+

-a#tor, as /ith an( ne/ te#hnolog(, is to understand the #a"a ilities o- R&'D and evaluate ho/ it #an e use-ul to our o"erations toda(. ,hough R&'D de"lo(ment is still not -ull -ledged, it is #lear that its de"lo(ment is an attaina le -uture goal. ,he value, /hi#h is the most im"ortant metri# -or a R&'D a""li#ation, is determined ( #onsidering the -ollo/ing ke( -a#tors: Basi# asset and inventor( visi ilit( needs, S"eed, range and relia ilit( needed to tra#k the target "rodu#t RC' 8Return Cn 'nvestment9 in the #ontext o- s#o"e -or im"rovements

RFID in Military
,he <.S. militar( has also een heavil( involved in SC%. ,he militar(0s main -o#us is on getting e1ui"ment and ne#essities to the servi#emen and servi#e/omen /ho are on the attle-ield. ,his is 1uite di--erent -rom most usinesses that o-ten lose sight o- the end #ustomer in the "ro#ess. 'n a memo issued a#k in )**; ( the A#ting <nder Se#retar( o- De-ense that said, L,he De"artment o- De-ense /ill e an earl( ado"ter o- innovative R&'D te#hnologies that leverages the 7le#troni# Produ#t Code 87PC9 and #om"ati le tags. Cur "oli#( /ill re1uire su""liers to "ut "assive R&'D tags on lo/est "ossi le "ie#e "art4#ase4"allet "a#kaging ( Banuar( )**+. We also "lan to re1uire R&'D tags on ke( high$value items.M ,he goal o- the militar( is to im"rove data 1ualit(, item management, asset visi ilit(, and maintenan#e. ,he DCD has done a good 3o at meeting this goal. ,he( #ontinue to e on the #utting edge in advan#es in militar( logisti#s using R&'D and SC%. ,he Arm( has ex"erimented /ith a #on#e"t #alled anti#i"ator( logisti#s. Anti#i"ator( logisti#s is 1uite similar to the #or"orate /orld0s SC%. ,he( oth #onsist o- seven main #om"onents. ,hese are su""liers, "ro#urement, manu-a#turing, order management, trans"ortation, /arehousing, and #ustomers. Anti#i"ator( logisti#s is in an attem"t to use te#hnologies, in-ormation s(stems, and "ro#edures to "redi#t and "rioritize needs and "rovide su""lies in a timel( manner. ,he militar( a""roa#h to SC% is onl( slightl( di--erent than that o- the #ommer#ial industr(. ,he militar( -o#uses on mission re1uirements as o""osed to "ro-it and loss statements, /hi#h are /hat drives a #or"oration. A##ording to a en#hmark initiative ( Deloitte F ,ou#he, onl( seven "er#ent o#om"anies are e--e#tivel( managing their su""l( #hains. ,he interesting -a#t is these #om"anies are sevent( three "er#ent more "ro-ita le than other manu-a#turers. ,his lends to the elie- that "ro"er SC% is ene-i#ial to a #om"an(0s ottom line. 7--i#ient SC% is di--i#ult to im"lement and is eing /idel( studied. Com"anies must -ind the right alan#e et/een inventor(, trans"ortation and manu-a#turing #osts. 'this is done "ro"erl(, SC% /ill e su##ess-ul and the #om"an( /ill likel( re#eive the re/ards ( /a( o- in#reased "ro-ita ilit(.

Successful RFID I

ple

entation in different Industries

Page 2@ o- );

Wal$%art R&'D, A Case Stud( &all )**+

Volks/agen Volks/agen, 7uro"eNs largest automaker and the -ourth largest auto manu-a#turer in the /orld are de"lo(ing R&'D te#hnolog( to s"eed u" vehi#le "i#ku" and im"rove #ustomer servi#e. ,he s(stem is used to 1ui#kl( lo#ate a #ar in the holding lot, /hi#h has over 2*,*** automo iles, and to tra#k the vehi#lesN "rogress through a "re$ deliver( s(stem. A-ter the "rodu#tion line, ever( vehi#le is e1ui""ed /ith an i$RE tag, an a#tive tag that #ontains a uni1ue identi-i#ation num er and "re$deliver( tasks. ,he vehi#le is then delivered to the holding lot. An 'ntelligent ?ong Range 8'?R9 $ena led van /ith an R&'D reader identi-ies the targeted vehi#le /hen a""roa#hing the #ar. A-ter the "re$deliver( tasks are #om"leted, the status is /ritten to the a#tive tag. A-ter de"lo(ing a#tive R&'D solution, Volks/agen #laims to have /itnessed the ene-it o- signi-i#ant redu#tion o- the vehi#le deliver( time and "rodu#tivit( has een im"roved ( as mu#h as -our times. ,he solution also "rovides additional ene-its su#h as im"roving 1ualit( #ontrol, ele#troni# /ork$in$"ro#ess tra#king, and automati# status u"date. Su"ermarket tries out smart tagging ,he ele#troni# radio tags /ill allo/ sta-- and #ustomers to kee" tra#k o- the goods in the store. ,he( /ill also hel" "revent sho"li-ting, tra#king the items -rom the shel- to the till and out o- the door. British su"ermarket #hain ,es#o has started to install Psmart shelves0 that #an tra#k items as the( are "la#ed or removed. '- the "rodu#t goes through the door /ithout eing "aid -or an alarm is set o--.

Sun Mi-r"systems sets up RFID test -entre in S-"tland Sun maintains that R&'D tags have the "otential to #ut huge #osts -rom the su""l( #hain o- retailers and manu-a#turers and said the 7uro"ean #entre /ill hel" -irms /ith the tagging o- "rodu#ts, integrating the in-ormation into a#k$end s(stems and sharing it /ith their su""l( #hain "artners.

'.B.%. 7x"ands 7--orts to Promote Radio ,ags to ,ra#k Goods 'B%0s move into the R&'D tag "rinter usiness /ith an R&'D$#a"a le "rinter designed to hel" #ustomer redu#e #osts and im"rove o"erational e--i#ien#ies. Also '.B.%. #onsultants egan selling advi#e on #onsumer "riva#( issues related to the use oradio identi-i#ation tagging o- #onsumer goods. ,exas 'nstruments ,exas 'nstruments de"lo( R&'D in the -ield o- logisti#s4su""l( #hain management. ,'$ R&'D te#hnolog( #onne#ts all "hases o- the su""l( #hain, -rom resour#ing and manu-a#turing to inventor( and distri ution. R&'D #reates real time in-ormation links that s"eed "rodu#tion, im"rove 1ualit( and streamline deliver(.

Page 2D o- );

Wal$%art R&'D, A Case Stud( &all )**+

EPC gl"$al Net/"r4 ,he 7PC glo al =et/ork uses R&'D to ena le true visi ilit( o- o 3e#ts in the su""l( #hain. ,he net/ork has -ive -undamental elements: ,he 7le#troni# Produ#t Code 87PC9 is a uni1ue num er that identi-ies an item in the su""l( #hain, /hether that is an individual "rodu#t or a #ase, or "allet, o- man( "rodu#ts eing shi""ed. 7a#h sili#on #hi" o- ea#h R&'D tag is en#oded /ith a uni1ue 7PC that identi-ies the "rodu#t. ,he sili#on #hi" is /ired to an antenna, and, using radio -re1uen#( identi-i#ation te#hnolog(, ea#h tag #ommuni#ates to an R&'D reader its 7PC. ,he C 3e#t =ame Servi#e 8C=S9 #olle#ts the 7PC that is "assed on -rom the reader. ,he C=S resides on a #om"uter or lo#al a""li#ation s(stem. 't tells the #om"uter s(stems /here to lo#ate in-ormation on the net/ork a out the item /ho0s 7PC it has 3ust en#ountered. ,his in-ormation /ill t("i#all( reside on the 'nternet, making it readil( availa le on a /orld/ide level. Ph(si#al %arku" ?anguage 8P%?9 is an S%?$ ased language that is used to de-ine data on o 3e#ts. Savant -' $/& 4-11"&3!#& $&*/+%"%.5 $/!$ *%%#1-+!$&' $/& 4%6&4&+$ %7 -+7%#4!$-%+ %6&#

$/& *%4)($&# '5'$&4'.

Limitati"ns and Challenges ", RFID

%an( issues still exist a out the im"lementation o- R&'D that even Wal$%art ma( have trou le addressing des"ite their de#ision to move -or/ard /ith the ne/ te#hnolog(. Current -hallenges in RFID implementati"n are% !l"$al standards% A single glo al R&'D standard is highl( unlikel( to evolve. ?ike ar#odes, standards -or R&'D /ill "ro a l( var( et/een man( regions o- the /orld. %ultinationals like Wal$%art ma( need to im"lement a variet( o- R&'D standards and te#hnologies a#ross their glo al organizations. +e-hn"l"gy pr"$lems% Pro lems su#h as signal distortion, reader a##ura#( and s"eed, and tag transmission #a"a ilities "ersist making R&'D still not "ra#ti#al -or /ides"read use. Some o- the ma3or te#hni#al limitations are: 1. Read-range distan-es are n"t su,,i-ient t" all"/ ,"r -"nsumer sur&eillan-e: %ost o- the R&'D tags #urrentl( in use have read ranges o- -e/er than + -eet. ,he read range o- the R&'D tags de"ends on the antenna size, transmission -re1uen#(, and /hether the( are "assive or a#tive. Limited in,"rmati"n -"ntained "n tags : Although some resear#hers on R&'D su""ort this as"e#t o- the te#hnolog( ( "ointing out that the tags asso#iated /ith most #onsumer "rodu#ts /ill #ontain onl( a serial num er. >o/ever, this num er #an reveal a lot oin-ormation, /hi#h is generall( used as a re-eren#e num er that #orres"onds to in-ormation #ontained on one or more 'nternet$ #onne#ted data ases. ,his means that the data asso#iated /ith that num er is theoreti#all( unlimited, and #an e augmented as ne/ in-ormation is #olle#ted.

2.

Page 2E o- );

Wal$%art R&'D, A Case Stud( &all )**+

3.

4.

De,e-ti&e and p""rly per,"rming RFID tags% R&'D tag manu-a#turers #ontinue to "rodu#e -ault( tags. &ailure rates in earl( R&'D "ilots have een as high as ;*H. <n-ortunatel(, Qrelativel( high relia ilit(Q is una##e"ta le i- an R&'D mandate #alls -or a 2**H read rate. Damaged RFID tags% Sin#e tag reading ha""ens automati#all( /ithout line o- sight and no human intera#tion, it #an e di--i#ult to kno/ /hen #ertain tags are not read. ,his e#omes a serious issue -or usiness a""li#ations uilt around R&'D i- 2**H read rates are im"li#it as "art o- the #ore usiness a""li#ation design.

Data management% ?a#k o- develo"ment o- right in-ormation management tools to manage the data e--e#tivel(, is making it di--i#ult to realize the -ull "otential o- R&'D in generating a /ealth o- in-ormation. LCom"anies "lanning to ado"t R&'D -a#e te#hni#al #on#erns related to e--e#tive data #a"ture 8or reading9, and to data volume 8in data ase management and transmission9M. C"st% An( develo"ing te#hnolog( is asso#iated /ith high #osts and so is R&'D, /hi#h is highl( ex"ensive to im"lement. L'ndividual tags #ost a out ;* #ents ea#h. this /ill dro" to et/een one and -ive #ents "er tag on#e illions are eing "rodu#edM . And de"ending on -un#tionalit(, tag readers #an #ost an(/here -rom several hundred to several hundred thousand dollars. ,he largest #ost issues, ho/ever, reside in the re1uired size o- the data ases, their integration /ith a #om"an(0s #urrent s(stems and the e--e#tive transmission o- in-ormation. Asso#iated #osts #an a""roa#h the millions odollars, ut the( are unavoida le i- the -ull ene-its o- R&'D are to e realized. Industry Standards% %an( "riva#( advo#ates are insisting the #om"anies to state their intended use o- the te#hnolog( due to la#k o- industr( standards regarding the use o- "ersonal in-ormation that #ould e en#oded on the #hi"s. Pri&a-y and -i&il li$erties% Cne ma3or #on-rontation -or R&'D te#hnolog( /ould e to deal /ith the threats to #onsumer "riva#( and #ivil li erties. R&'D tags #an e em edded into4onto o 3e#ts and do#uments /ithout the kno/ledge o- the individual /ho o tains those items. %ust e "rogrammed, a""lied and veri-ied individuall(, and data s(n#hronization is usuall( re1uired. A -inal arrier to im"lementation that ma( need managing is em"lo(ee a##e"tan#e, "arti#ularl( in light o- "otential 3o losses.

RFID Pra-ti-es that sh"uld $e pr"hi$ited% %er#hants must not -or#e their #ustomers into a##e"ting R&'D tags in the "rodu#ts the( u(. R&'D must not e used to tra#k individuals a sent in-ormed and /ritten #onsent o- the data su 3e#t. >uman tra#king is ina""ro"riate, either dire#tl( or indire#tl(, through #lothing, #onsumer goods, or other items. R&'D should never e em"lo(ed in a -ashion to eliminate or redu#e anon(mit(. &or instan#e, R&'D should not e in#or"orated into #urren#(.

What Sh"uld Wal-Mart D"5

Page 2A o- );

Wal$%art R&'D, A Case Stud( &all )**+

Wal$%art should rede-ine the s#o"e o- its R&'D mandate ( narro/ing the s#o"e o"rodu#ts to those /ith limited amounts o- metal and li1uid. Su""liers /ould not e a--e#ted /ith a narro/er -o#us on high$"ri#ed "rodu#ts like "res#ri"tion drugs, a""arel, and DVDs et#. 't gives additional time -or vendors and su""liers to "er-e#t tag relia ilit( -or all "rodu#ts. L&orrester re#ommends that Wal$%art use its in-luen#e to hel" #reate a u(ing #onsortium, giving su""liers the #olle#tive "o/er to #ut tag #ostsM . What Sh"uld Suppliers D"5 Su""liers should use their initial kno/ledge to sha"e mandates ( Wal$%art and other retailers. L'n addition to addressing the #hallenges the( are -a#ing in im"lementing R&'D /ith Wal$%art, su""liers should #reate an internal R&'D lead "osition /ith dire#t a##ess to the C7CM.

Future ", RFID

Fig 6% State ", RFID te-hn"l"gy depl"yment #Source$ %MR Research& '(()*

Future %pplications
'n the "harma#euti#al industr(, R&'D tags on drug ottles are eing used as anti$#ounter-eiting devi#es. Pet o/ners have egun im"lanting their #ats and dogs /ith R&'D #hi"s to lo#ate them should the( e#ome lost. 'n li raries, ooks are eing tagged -or sel-$automated #he#kout, -reeing u" li rarians to "er-orm other tasks. ,his also allo/s a li rarian to easil( lo#ate a ook mis"la#ed on the /rong shel-.

Page )* o- );

Wal$%art R&'D, A Case Stud( &all )**+

,he <SDA is "ushing to give ever( #o/ in the <nited States its o/n uni1ue identi-i#ation num er, making it easier to tra#k diseases, su#h as mad #o/ disease, a#k to the originating -arm. 't has een a#kno/ledged that R&'D te#hnolog( #an e used -or marketing "ur"oses or even, in a Brave =e/ World s#enario, government tra#king o- its #itizens. &or instan#e, it is "ossi le to u i1uitousl( em ed the #hi" /ithin a "rodu#t, -or instan#e a "air o- 3eans or a set o- automo ile tires. What is most -rightening, ho/ever, is the a ilit( to im"lant an R&'D #hi" under the human skin.

,he -uture o- R&'D is un#ertain. ,here has een a mixed rea#tion -rom the various su""liers and #ustomers /ho alread( de"lo(ed R&'D into their industr(. 'ndustr( anal(sts are unanimous on the vie/ that R&'D is going to dominate the industr( soon. R&'D te#hnolog( /ill rea#h the zenith ( the end o- )**@ and -rom a retailers "ers"e#tive the te#hnolog( /ill ring a revolution, ke( retailers su#h as ,es#o and, in "arti#ular, Wal$%art o- the <S are "ushing ahead /ith the te#hnolog( that /ill end u" a--e#ting thousands o- su""liers. So too is the <S De"artment o- De-ense. 't /ill e /idel( used in retail and #onsumer goods, automotive, health#are, militar(, "ostal de"artment and other s#ienti-i# use ut i- #onsumers reall( donNt like the idea O i- itNs too #on-using -or them, too mu#h te#hnolog( or their "riva#( #on#erns are too strong O /ill the te#hnolog( survive is the 1uestion to e ans/ered. ,/o things are #lear /hen it #omes to R&'D. &irst o--, there has een no #lear roadma" that a #om"an( #an em"lo( /hile evaluating R&'D o""ortunities or mandates. ,he t("i#al a""roa#h has een one o- trial and error. Se#ondl(, the -uture o- R&'D is going to e determined more ( the dominant a""li#ations rather than ( the te#hnolog(. %an( see R&'D as a te#hnolog( in its in-an#( /ith an unta""ed "otential. While /e ma( talk o- its existen#e and the amazing /a(s in /hi#h this te#hnolog( #an e "ut to use, until there are more standards set /ithin the industr( and the #ost o- R&'D te#hnolog( #omes do/n /e /onNt see R&'D s(stems rea#hing near their -ull "otential an(time soon. Resear#hers have #on#luded that organizations should kee" initial R&'D "ro3e#ts at a sim"ler s#ale. L,his might in#lude single stage im"lementation, su#h as tra#king #ases or "allets /ithin /arehouses, or -rom /arehouse to store, or a#ting as ar$ #ode re"la#ementsM A. Be-ore an( organization #an seriousl( #ontem"late using R&'D to su""ort its o"erations, it should have a -irm understanding o- the ene-its that the te#hnolog( #an "rovide. ,his level o- understanding and ex"erien#e /ill e ne#essar( e-ore moving to more #om"li#ated su""l( #hain im"lementations in making R&'D a ig su##ess. R&'D learning #urve is a long "ro#ess and starting /ith small "ro3e#ts and then esta lishing standards -or e--i#ient -uture "rodu#t movement #an e--e#tivel( im"lement it. LAs the old sa(ing goes, Qthe earl( ird #at#hes the /orm.Q 7ven i- the true ene-its /ill not e realized -or several (ears, esta lishing the ase R&'D in-rastru#ture toda( is the ke( driver -or total su""l( #hain ado"tion and ene-it realization tomorro/M 2*.

Page )2 o- );

Wal$%art R&'D, A Case Stud( &all )**+

REFERENCES%
Bose F Pal. Auto$'D: %anaging An(thing, An(/here, An(time in the Su""l( Chain. AC% Digital ?i rar(: Communi#ations o- the AC%, Volume :E, =um er E, Pages 2**$ 2*@, August )**+. %ilitar( 7di#t: <se R&'D ( )**+. R&'D Bournal. Retrieved -rom htt":44///.r-id3ournal.#om4arti#le4arti#levie/4@*:42424. htt":44///.alm#.arm(.mil4alog4issues4Se"C#t*)4%SDD:.htm htt":44l#m.#sa.iis#.ernet.in4su""l(T#hainTintro.html htt":44kno/ledge./harton.u"enn.edu htt":44///.amein-o.#om4@@*A*.html htt":44///.logisti#stoda(.#om4ASP4vie/arti#le.as"Ustrarti#le'DV2*@):@F"ageV2 Smaller, &aster, Chea"er, Ruieter. So What 7lse 's =e/U=et=e/s, Bune )**: htt":44///./almartstores.#om4Glo alW%StoresWe 4navigate.doU #atgV:+;F#ont'dV+D** htt":44///.tutorial$re"orts.#om4/ireless4r-id4/almart4r-id$-uture."h" htt":44///.r-idgazette.org4)**+4*A4r-idTandT/almar.html htt":44i#mr.i#-ai.org4"d-4C"erationsH)*CaseH)*Stud(H)*$H)*Wal$%arts H)*Su""l(H)*ChainH)*%anagementH)*Pr."dhtt":44///.r-id3ournal.#om4arti#le4arti#levie/4:;+424)@4 htt":44///. aselinemag.#om4arti#le)4*,2+:*,2@2)2:A,**.as" htt":44///.morer-id.#om4details."h"U su detailVRe"ortFa#tionVdetailsFre"ortTidV++) htt":44///.in-o/orld.#om4arti#le4*+4*E4*A4;;CPrealit(T2.html htt":44ne/s. #.#o.uk424hi4te#hnolog(4)@@2E)+.stm

htt":44ne/s.zdnet.#o.uk4hard/are4emergingte#h4*,;A*)*;+D,;A22E)E;,**.htm htt":44/e .mit.edu4)2/.DE:4///4BDH)*Su""lementals4%aterials4<nit H)*,/o4Se#urit(H)*Priva#(H)*'dentit(4'B%H)*"romotesH)*radioH)*tags H)*=!,.html htt":44///."h(sorg.#om4ne/s:+;*.html htt":44///.sear#hemall.#om4rd4results4rd1Tlogisti#sTsu""l(T#hain4///.ti.#om4tiris 4do#s4solutions4su""l(4logsu".shtml4sear#hemallT,'TR&idT8,exasT'nstrumentsTRadi

Page )) o- );

Wal$%art R&'D, A Case Stud( &all )**+

oT&re1uen#(T'denti-i#ationTSolutions9To--ersTtheTmostTextensiveTrangeTo-Ttrans" onderTreaderTandTantennaT"rodu#tsT-orTaT/ide///TtiT#omTtirisTdo#sTsolutionsT su""l(Tlogsu".html htt":44///.r-idgazette.org4)**:4*@4r-idT2*2.html htt":44uk.ne/s.(ahoo.#om4)D*A)**+4))24rsi$aggressivel($"ri#es$r-id$la els.html htt":44///.theauto#hannel.#om4ne/s4)**+4*A4)@42:;A)).html htt":44///.sa"in-o.net4 htt":44///.itr"ortal.#om4 htt":44///.amrresear#h.#om4 htt":44///.r-id$2*2.#om4 htt":44///.r-idgazette.org4)**:4*@4r-idT2*2.html htt":44///.deloitte.#om4dtt4arti#le4*,2**),sidH)+;D):;:EH)+)@#id H)+;D;@E+),**.html htt":44///.internetne/s.#om4ent$ne/s4arti#le."h"4;:)+E*2 htt":44///.in-o"eo"le.org4resour#es4r-idTsurve(4 htt":44///.#om"uter/orld.#om4mo ileto"i#s4mo ile4te#hnolog(4stor(4*,2*E*2,E+2 AA,**.html htt":44@:.);;.2@D.2*:4sear#hU 1V#a#he:ha3&@k"*mR'B:///.-orrester.#om47R4Press4Release4*,2D@A,A22,**.htmlW /hi#hW#om"aniesWareWim"lementingWR&'DWte#hnolog(FhlVen htt":44r-idanal(sis.org4 htt":44in-ormation/eek.#om4stor(4sho/Arti#le.3htmlUarti#le'DV+;)***D+F"gnoV) htt":44@:.);;.2@2.2*:4sear#hU 1V#a#he:A#A7mm+/<):B:net/orks.sili#on.#om4lans4*,;A*):@@;,;A2)2*A2,**.htm W-utureWo-WR&'DFhlVen htt":44hard/are.sili#on.#om4storage4*,;A*):@:A,;A2)**@:,**.htm htt":44///.tom"kinsin#.#om4"u li#ations4#om"etitiveTedge4arti#les4*)$*:$ R&'DTPharma.as" htt":44///.r-idlo/do/n.#om4)**+4224-utureTo-Tr-id.html htt":44///./e o"edia.#om4Did!ouJno/4Com"uterTS#ien#e4)**+4r-id.as" htt":44///.net/orkmagazineindia.#om4)**+*:4vendorvoi#e*).shtml

Page ); o- );