Responding to Wal-Mart's RFID Mandate - ARC Advisory Group

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ARC Strategies • December 2003 Training • $15,000 to $25,000 for training and education. Following these kinds of projects, most project managers will tell you they wish they had spent more on training. Summary There is certainly a lot of hype surrounding RFID, but now that Wal-Mart and the DoD have issued mandates, companies can no longer ignore this trend. Although retailers will enjoy most of the near-term benefits, manufacturers have to find a way to not only comply with these mandates, but also derive benefits as well. Although retailers will enjoy most of the near-term benefits, Learning about the technology and conducting pilot tests manufacturers have to find a way should be the primary focus at this stage of the game. to not only comply with these The information gathered from these tests can be used to mandates, but also derive develop ROI models and answer important questions benefits as well. such as where and when to do the tagging. At low volumes, tagging at the DC is probably the best option. But when volumes reach a certain critical level, automating the tagging process and incorporating it as part of the packaging operation may be justified. Part of the challenge is determining the critical volume threshold for this scenario, thus the importance of having a firm understanding of costs and process implications, and the importance of conducting pilots both at the factory and the DC. The other challenge, particularly for Wal-Mart’s top 100 suppliers, is balancing the need to move quickly in order to meet the January 2005 deadline, and the inclination to wait as long as possible in order to leverage developing expertise and allow some of the uncertainties to fade away. It will take some time for case studies and best practices to emerge. The more information that companies can share with regards to successes and pitfalls, the faster this technology will be adopted and bring benefits to all. ARC will continue to research this topic and serve as a medium for industry collaboration and knowledge transfer. 14 • Copyright © ARC Advisory Group • ARCweb.com
ARC Strategies • December 2003 Analyst: Steve Banker, Adrian Gonzalez Editor: John Moore Distribution: All EAS & LEC Clients Acronym Reference: For a complete list of industry acronyms, refer to our web page at www.arcweb.com/Community/terms/terms.htm 3PL Third Party Logistics API Application Program Interface ASN Advanced Shipping Notice B2B Business-to-Business BPM Business Process Management CAGR Compound Annual Growth Rate CAS Collaborative Automation System CMM Collaborative Manufacturing Management CNC Computer Numeric Control CPG Consumer Packaged Goods CPAS Collaborative Process Automation System CPFR Collaborative Planning, Forecasting and Replenishment DC Distribution Center EDI Electronic Data Interchange EPC Electronic Product Code ERP Enterprise Resource Planning GPS Global Positioning Satellite IT Information Technology LAN Local Area Network MIS Management Information System MRP Materials Resource Planning OpX Operational Excellence OLE Object Linking & Embedding OPC OLE for Process Control PAS Process Automation System RF Radio Frequency RFID Radio Frequency Identification ROI Return on Investment S&OP Sales & Operational Planning SCE Supply Chain Execution SKU Stock Keeping Unit VMI Vendor Managed Inventory WMS Warehouse Management System Founded in 1986, ARC Advisory Group has grown to become the Thought Leader in Manufacturing and Supply Chain solutions. For even your most complex business issues, our analysts have the expert industry knowledge and firsthand experience to help you find the best answer. We focus on simple, yet critical goals: improving your return on assets, operational performance, total cost of ownership, project time-to-benefit, and shareholder value. ARC Strategies is published monthly by ARC. All information in this report is proprietary to and copyrighted by ARC. No part of it may be reproduced without prior permission from ARC. You can take advantage of ARC's extensive ongoing research plus experience of our staff members through our Advisory Services. ARC’s Advisory Services are specifically designed for executives responsible for developing strategies and directions for their organizations. For subscription information, please call, fax, or write to: ARC Advisory Group, Three Allied Drive, Dedham, MA 02026 USA Tel: 781-471-1000, Fax: 781-471-1100, Email: info@ARCweb.com Visit our web page at ARCweb.com Copyright © ARC Advisory Group • ARCweb.com • 15
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Responding to Wal-Mart's RFID Mandate - ARC Advisory Group

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