Whats Wrong With RFID?

All the promises made for RFID technology may eventually come true, but it could take longer than you think.

Beaver Street Fisheries is the prototypical manual-labor shop. Tons of clams, lobster, alligator, octopus and other exotica, from coastal waters in over 50 countries—hard-won catches of hard-edged fishermen and hunters—roll in and out of the Jacksonville, Fla.-based companys distribution site every day, to be carried by trucks, planes and ships to customers around the world. Beaver Streets more than 400 workers orchestrate a huge and noisy assembly line producing pallets of individually wrapped items for retailers, such as Wal-Mart Stores Inc., and bulk shipments for restaurants. Until recently, very little about Beaver Streets operation gave off the slightest whiff of high technology.

That changed last year, when Wal-Mart issued a much-publicized mandate requiring that by January 2005, its 100 biggest suppliers place radio-frequency identification (RFID) tags on most cases and pallets shipped to three of its Dallas-area warehouses.


To find out how Wal-Marts RFID project in Texas is going so far, click here.

Beaver Street, with $500 million in annual sales, is hardly on Wal-Marts A-list, but that didnt stop CIO Howard Stockdale from trying to meet the retailers demand sooner rather than later. As he saw it, the mandate provided Beaver Street with a huge opportunity to cozy up to a customer with more shelf space and deeper pockets than anyone else—and to get there before the competition.

So far the strategy is working. Beaver Street has already spent upward of $75,000 to build a beta system that will test inventory management using RFID equipment. Electronic readers stationed at loading and receiving docks in Jacksonville scan incoming deliveries and outgoing shipments for RFID tags that identify the contents of pallets and then send the data to Beaver Streets ERP program. Once perfected, the system will produce detailed, up-to-the- second reports about which items are in-house and which orders are on their way to retailers.

The system is still experimental, but Beaver Street is racing to have it fully running by next year, perhaps even by Wal-Marts deadline. Its efforts have caught the attention of the giant retailer, which regularly invites Beaver Street executives to its RFID brainstorming sessions, where they get to rub shoulders with such supplier superstars as Procter & Gamble Co., Kraft Foods Inc., Unilever and Kimberly-Clark Corp.

"We want to nurture and grow our business with Wal-Mart, and one way to do that is to prove that a medium-size business like ours can be just as innovative as a big, wealthy company," says Stockdale. "We also can automate manual tasks with RFID and deliver greater velocity through the supply chain and better inventory management by always knowing where our shipments are."

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