Someday in the not-so-distant future, when you buy a box of Kleenex at the local pharmacy, it will trigger a chain reaction of events that will result, ultimately, in a tree being harvested in Canada. Call it the RFID Effect.
While not quite as profound as the Butterfly Effect—the notion that a single flap of a butterflys wings can alter the weather on the other side of the world—the potential for RFID (radio-frequency identification) technology to affect global supply chains has been the subject of debate for years.
And though its still early, businesses of all shapes and sizes are beginning to experiment in earnest with this promising but temperamental technology, whether they believe it is the start of a retail revolution or nothing more than a glorified bar code.
Among the retailers that have embraced RFID early and often is Kimberly-Clark Corp., the $15 billion consumer goods behemoth that makes Kleenex, along with a host of other well-known brands, such as Huggies and Depend.
The Dallas-based firm was the first U.S. company to ship an item tagged with an EPC (electronic product code) off a commercial line, in April 2004. (A framed picture of that first box, a case of Scott Towels, hangs in a conference room at the companys RFID lab.)
Six Kimberly-Clark employees have joined EPCGlobal Inc., the international organization establishing the standards for RFID tags. The company is already able to selectively tag more than 144 of the items in its product line.
And in a bold attempt to take RFID beyond the infamous slap-and-ship mandate of Wal-Mart Stores Inc., Kimberly-Clark has even built a 5,000-square-foot warehouse for the sole purpose of testing its use of RFID.
Why such eagerness for an unproven technology? Kimberly-Clark executives say they firmly believe that RFID will give the retail industry the ability to achieve just-in-time efficiencies similar to those of Toyota Motor Corp. and Dell Inc.
“Its going to get to the point where we can send an alert to Wal-Mart and ask them why a store shelf is empty when we know theres product in the warehouse,” said Terry Assink, CIO of Kimberly-Clark.