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

ARC Strategies • December 2003
Making the transition from
the DC to the plant depends
on several factors, including
number of SKUs, percent of
shipping volume, and
number of customers that
require RFID tags.
Plant
Where to
Tag?
DC
The decision also
requires a firm
understanding of the
costs associated
with each option, as
well as the impact
on processes.
Low
?
Volume
High
If a service provider is doing Wal-Mart compliance work for several customers,
outsourcing may be a more cost-effective option in the long run.
However, manufacturers must still develop a clear understanding of the
cost implications of the different options, especially costs associated with
process changes.
At low volumes, tagging at the distribution center 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 distribution center.
Considerations and Strategies for the DC Pilot
• A company’s WMS will be used to route SKUs that need RFID tags to
special tag application and verification scanning locations. While this
could be done at receiving, most companies will choose to do this after
picking.
• Some SKUs (with metal or liquid content) may have to use nonstandard
tags and will need to be routed to different RFID encoding stations.
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