Dont Mess With Wal-Marts RFID Pilot - Page 2

By Larry Dignan  |  Posted 2004-07-06 Print this article Print

At its supplier meeting last month, Wal-Mart outlined its next set of deadlines. By June 2005, Wal-Mart will be live with RFID-tagged goods in six new distribution centers as well as 250 stores and Sams Club outlets. By October 2005, Wal-Mart will install the technology in up to 13 distribution centers and 600 stores. By January 2006, Wal-Marts next 200 top suppliers will begin tagging cases and pallets. According to Wal-Mart, testing has gone as expected, with the retailer evaluating processes such as routing products on loading docks, putting goods on conveyor belts and handling items with faulty tags. Langford says a pilot works out these issues and insists read rates will hit the 100 percent mark. "A lot of it is choosing the right tag to get performance," he says, adding that items such as a case of soup with liquid and metal may need larger antennas on the tags. To work through these issues, Wal-Mart gets tagged cases and pallets of lotion, cat food, shampoo, laundry detergent and peanuts, to name a few.
In the meantime, meeting Wal-Marts mandate is going to take a lot of trial and error. Kevin Ellison, manager for Sun Microsystems RFID test center in Carrollton, is overseeing testing for two companies-Poly-America, a privately held company in Grand Prairie, Texas, that makes private-label trash bags for Wal-Mart, and tire giant Goodyear. In the Poly-America test, a tagged pallet containing cases of tall kitchen bags was read easily. But the chances of the 140 trash-bag cases on the pallet being read were 53 percent. The test, which was in the early stages, was hurt by the location of the tags on the boxes and the plastic wrap encasing the pallet.
"Its not perfect technology and its early," says Ellison. "We obviously dont have the right tag or have it optimized." Ellison has a few guesses why this test failed. The plastic wrap may have shielded the radio waves. The tags were facing down, away from the reader. And the tags could be wrong. There are dozens of tag makers and each antenna design works differently, depending on the properties of the product. A tag from Alien Technology may work on a case of shampoo, but you may need a tag from label printer Avery Dennison for a case of peanuts. Goodyears tires have yielded better results. In the lab, Ellison has gotten 100 percent read rates on the tires, through weeks of trial and error. Tires, which are tagged individually and often rolled off trucks, present a host of challenges. For starters, their ingredients include oil and steel, two substances that thwart radio waves. Ellison is currently getting 100 percent read rates by putting tags on the outside of the tire, secured by blue masking tape, and running them through two sets of readers from Alien Technology and Matrics to read two classes of tags. Bottom line: You may need two sets of readers to get 100 percent read rates. "If you want 100 percent read rates, it may make sense to have multiple readers," says Ellison. Wal-Mart may have the same idea. One hallway in its Denton store has two sets of Matrics readers just about 10 feet apart from each other. The Matrics readers are designed to read both Class 0 and Class 1 tags required by Wal-Mart. Ellisons tire challenges are far from over. He will have to find glue that wont interfere with radio waves. Goodyear will also need tags that wont fall off when thrown onto a conveyor moving at Wal-Marts preferred speed—nearly two football fields a minute. "I think well see 100 percent read rates on pallets," says Ellison. "But cases will be more difficult. How fast they are read will depend on reader speed, where the tag sits and your middleware." Speed is no small issue, considering Wal-Mart isnt going to slow down its conveyors, which move at 600 feet per minute, for RFID. Wal-Mart says it has had some issues, but wouldnt elaborate. Will Wal-Mart have to change its processes to ensure RFID tags face up or out to a reader? Some suppliers may have it easier than others. Navin Chandaria, CEO of Conros, the North York, Ontario-based maker of Pine Mountain fire logs, is optimistic. Conros tagged pallets in one plant and plans to roll out RFID systems in another seven. Chandaria hired Hewlett-Packards services unit to set up pilots tracking fire logs, which work well with radio waves, unlike liquid, metal and electronics. Chandaria says hes not sure about the immediate benefits, but hopes to manage inventory on Wal-Marts shelves better. Currently, Conros replenishment process isnt automated. When its cold, the company ships a lot of fire logs and hopes stores dont run out. He says RFID tracking data with weather pattern information could make better inventory predictions. For now, the data sits in Conros Microsoft SQL databases for evaluation. "If its a cold night and there are not enough fire logs on the shelf, its not like people come back the next day and buy two logs," he says.

Business Editor
Larry formerly served as the East Coast news editor and Finance Editor at CNET Prior to that, he was editor of Ziff Davis Inter@ctive Investor, which was, according to Barron's, a Top-10 financial site in the late 1990s. Larry has covered the technology and financial services industry since 1995, publishing articles in, Inter@ctive Week, The New York Times, and Financial Planning magazine. He's a graduate of the Columbia School of Journalism.

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