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

More documents

Recommendations

Info

ARC Strategies • December 2003 Understanding Wal-Mart’s Requirements Suppliers will be required by January 2005 to ship RFID-tagged pallets and cases, with Electronic Product Codes (EPC), to three Wal-Mart distribution centers in Texas that support 150 different stores, including Sam's Club, Sam's Market, and regular Wal-Mart outlets. All SKUs shipped to Wal-Mart must be tagged, but…. % of SKUs % of Shipments …only three DCs will initially be able to receive tagged product; the uncertainty in ramp-up schedule makes planning very difficult. 0% 20% 40% 60% 80% 100% The Uncertainty Surrounding the RFID Ramp Complicates Planning Wal-Mart will expand the number of distribution centers capable of receiving RFID-tagged product throughout 2005, but the ramp-up schedule is unknown. The company’s plans to implement RFID outside the United States is also vague. Wal-Mart continues to work closely with EPCglobal, a standards-setting organization focused on passive RFID and related technologies. Additional Requirements • Continued support of barcodes. Encoder/printers exist that can embed an RFID tag within a barcode label. Zebra is currently the only major hardware provider with this type of solution, but competitive of- 4 • Copyright © ARC Advisory Group • ARCweb.com
ARC Strategies • December 2003 ferings from other suppliers are on the horizon. Get your orders in early - demand is outpacing supply. • Advanced Ship Notices (ASNs) must include EPC. Wal-Mart is currently modifying its ASN specification to make this possible. • Class 1/Version 2 tags will become the long-term standard. Class 1/Version 2 standards should be finalized sometime next year. In the near term, Class 0 and Class 1/Version 1 EPC tags will be supported. Class 0 tags are programmed at the factory; suppliers then need to match the right tag to the right product before shipping. 24-80 Specified Wal-Mart advises suppliers to buy “agile” 64 Specified readers that can be upgraded via software to read new tag protocols. This is an endorsement of readers by EPC Tag Specifications ThingMagic and AWID. Class/Version MHz Type of Tag Bits Status Class 0 900-928 Factory Programmable Class 0+ 900-928 Read/Write 24-80 Unspecified Class 1, v. 1 13.56 Write Once - Read Many Class 1, v. 2 860-930 Read/Write 64 Unspecified • Suppliers must scan RFID tags after they're applied to ensure they work. Wal-Mart expects suppliers to place one antenna on each side of a gateway or dock door and one antenna above. For case tagging and conveyors moving up to 600 feet per second, it expects one antenna on each side of the conveyor (or one antenna underneath and one above). Cases must be 100 percent readable for conveyors moving at 540 feet per second. EPCglobal is working on creating certification centers to allow suppliers to prove that all SKUs can be read, but the details on this are not fully hashed out. Computer supplier, Sun, is scheduled to have an RFID testing center open by the end of December in Dallas, Texas and another in Scotland in February of 2004. The Manufacturer’s Dilemma Wal-Mart has made it clear that it will not accept any price increases from suppliers related to RFID deployment, even though most (if not all) of the near-term benefits will be derived by the retailer. Achieving payback in less than three years will be very difficult for most manufacturers, particularly those with domestic supply chains. Copyright © ARC Advisory Group • ARCweb.com • 5
Page 1 and 2: ARC STRATEGIES By Steve Banker & Ad
Page 3: ARC Strategies • December 2003 Ex
Page 7 and 8: ARC Strategies • December 2003 th
Page 9 and 10: ARC Strategies • December 2003 Ma
Page 11 and 12: ARC Strategies • December 2003 pr
Page 13 and 14: ARC Strategies • December 2003
Page 15 and 16: ARC Strategies • December 2003 An

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

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?