He also said he believes those efficiencies will be significantly delayed unless a global standard is agreed upon.
"What is required in the supply chain?" Ulrich asked, during a March 29 Web seminar hosted by RFID Journal. "A low-cost RFID [radio-frequency identification] solution—thats key, especially at the item level. To get there we need economies of scale … The only way to do that is to get to one standard that supports multiple use cases—that [can] read at a distance for case and pallet, and close proximity for item level."
The battle, at this point, is playing out around tag and reader frequencies: HF (High Frequency) versus UHF (Ultra High Frequency).
There are some vendors, like ODIN Technologies, in Dulles, Va., a company that provides RFID infrastructure software, deployment services and lab testing, which point to HF as the best choice for pharmaceutical tagging—a prime example of an industry that looks to heavily utilize item-level tagging.
Then there are those like Chris Diorio, chairman, founder and vice president of RFID engineering for Impinj, which has offices in Seattle and Newport Beach, Calif., and Ian Forster, technical director of RFID at Avery Dennison, in Pasadena, Calif. Both executives are clearly in the UHF camp (both companies manufacture UHF tags and readers).
UHF is based on the Gen 2 standard, ratified by EPCGlobal last year. Tags and readers incorporating Gen 2 are just coming to market this year.
The issue is that with different industries—and sometimes even different customers in the same industry—requiring either HF or UHF tags, suppliers find themselves faced with the problem of implementing separate infrastructures to support both.
"Total cost of ownership [is key]," Wal-Marts Ulrich said. "Currently certain DVD suppliers have to remain on two infrastructures, with two different standards. We dont want to be in that situation. Standards should help us all. You cant get to item level unless you get to low cost. It may be a ways down the road, but the steps we take today [are what] gets us there—either moves us forward or delays us."
Ulrich said the first thing people in different industries need to keep in mind is that the supply chain is global. "There is a shared ecosystem with a lot of industry lines—where does pharmaceutical stop and health and beauty begin? Its an unclear line, and its very important that the decisions that are made are made for an entire industry," he said.
Despite Wal-Mart, headquartered in Bentonville, Ark., being a clear leader in determining RFID proliferation, Ulrich does not want to see a scenario where the company is defining a standard for others in the industry to follow, he said. "If we make a decision, because of spill-over [into other industries], there is a potential [for Wal-Mart to] put undue pressure on suppliers," he said.
That said, Wal-Mart is decidedly in the UHF camp.