Walmart and RFID: RFID Technology for Retail
Introduction
Walmart has grown to the world’s largest retailer by becoming the masters of supply chain management. This successively, allows them to bring the lowest possible price to customers.
With this in mind, Walmart has endeavored to become a pacesetter in the area of implementing supply chain technologies to achieve the type of operational efficiency that make these cost savings possible.
Using RFID to identify and track inventory through the Walmart supply chain is ideal because this technology allows for fast and easy real-time transfer of data stored on tags on a product or pallet. RFID tags also can transfer much more information than bar codes traditionally used for this purpose.
The initial Challenge
Although it is obvious that Walmart’s RFID program is valuable, the initial development of RFID technology has brought some initial problems.
- RFID tag purchase – Because the system is a new process for product suppliers and Walmart, it is not clearing who is responsible for purchasing tags, which is a huge obstacle. It can now be understood that whether a supplier or a retailer buys RFID tags, once the goods are on the shelves, the cost of the tags will be included in the total price.
- Acceptable read rate – Some areas of Walmart strive to obtain an acceptable read rate, and a large portion of the tags that can’t be read. Many of these problems are due to the box containing or made of materials that interfere with radio frequency waves, such as metals and liquids. Now, this problem can be solved with special tags and other mitigation techniques. These options include incorporating Walmart RFID tags specifically for water or metal, or adding radio frequency (RF) absorbing materials. Today, RFID systems can usually achieve an average read rate of 98-100%. This number may be slightly different, depending on the type of RFID system used, the type of items to be marked, and how the marked items are stacked.
- Invalid adhesives – Some labels have ineffective adhesives, causing them to separate from the shipping pallet or even unreadable. The adhesive used on Walmart RFID tag is now more flexible. Now, many RFID tags can also be customized with industrial-strength adhesives, or adhesives that can withstand certain environmental factors (such as heat or water).
- Cost – The RFID tags used to Walmart supply chain are not as cost effective as they are today. Although the current average price of a label is $0.08-0.15, the average price in the early 2000s was $0.50-0.75. Since RFID has not been widely used at that time, the manufacturing costs and hidden costs of this technology are usually higher.
Today, all Walmart locations in the United States use RFID to track purchases and merchandise at the sales site.
Benefits of RFID for Walmart
RFID can continue to revolutionize the way Walmart and other major retailers operate in the following ways:
Inventory visibility: Walmart can make its inventory management clearer and more visible while shaking hands with RFID technology. One way Walmart does this is by digitizing inventory information. By providing accurate inventory information online, customers can view which products are currently available in each store. In this way, Walmart can refill its stock.
Customer convenience: By RFID technology, Walmart can improve its grocery pickup system, which enables consumers to buy goods online and acquire them from in-store whenever they’ve time. The mechanism of RFID helps Walmart’s customers to track the location and quantity of a specific product in more than one store, enhancing customer satisfaction and convenience.
In conclusion
There exists a strong relationship between Walmart and RFID technology. Working with RFID technology, Walmart has improved the functional efficiencies since the beginning. And now, both of them are working side by side to bring steadfast advancement in supply chain industries and inventory management. The relationship between Walmart and RFID creates paths for other retailing companies to embed their sales floor items or track shipments.
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