RFID shows signs of life
If you’ve been wondering whatever happened to RFID,
here’s the answer: It’s still alive, but it isn’t exactly kicking.
Some companies that had planned to implement RFID
have backed away. One prominent example is Albertsons,
the Western U.S. supermarket chain. In 2004, Albertsons
launched an RFID initiative that would require major suppliers to tag cases and pallets for delivery to the grocer’s distribution centers. But retail giant Supervalu Inc., which
bought Albertsons in 2006, was not sold on the value of
RFID, and the program was discontinued.
That doesn’t mean Supervalu has written off RFID altogether. Although it has backed off for now, the retailer may
revisit RFID in the future, Matt Smith, Supervalu’s vice president of supply chain, told DC VELOCITY. “We currently do
not view RFID as a cost-effective solution for our grocery
distribution operation and have allocated our investments
toward other technologies that help us become more efficient
and provide the best service to our customers. That said, we
continue to follow the advancements in RFID technology
and remain open to the possibility of incorporating it into
our distribution environment at a later time,” Smith said.
Concerns about the cost/benefit ratio have led to some
foot-dragging among suppliers. Most of Wal-Mart’s suppliers are only tagging 10 to 15 stock-keeping units (SKUs),
said Sean Campbell, a partner in IBM’s Global Business
Systems unit, at a recent meeting of the Council of Supply
Chain Management Professionals’ New England
Roundtable. But others are picking their battles, using RFID
to address a specific problem rather than adopting it across
the board, he said. Some of the successful applications he’s
seen include asset location and tracking, triggering events
in manufacturing environments, and improving the accuracy of retail floor data. RFID has also been helpful in preventing out-of-stocks and reducing the incidence of “
phantom inventory”—inventory that software says is in a retail
store but is actually elsewhere in the distribution system.
short takes
The Virginia Port Authority has begun using a fuel-effi-cient, low-emissions hybrid locomotive at its on-terminal
rail operation at the Norfolk International Terminal. The
unit, called the “Green Goat,” is expected to save $143,000
in annual fuel costs. The port plans to add two additional
hybrid vehicles in coming months. … The Port of Dunkirk
in France has added two new super post-Panamax gantry
cranes for its deepwater quay. The cranes, manufactured by
ZPMC (Shanghai Zhenhua Port Machinery), will each be
able to work up to 23 rows of containers. … United Fresh
go figure …
1
The United States’ ranking in the World Economic
Forum’s 2008–2009 Global Competitiveness Report.
This is the second consecutive year the United States
has been ranked by the organization as the world’s
most competitive nation.
SOURCE: WORLD ECONOMIC FORUM
Co-presenter Donald Biggs, director of customer logistics
at Welch Foods Inc., said that Wal-Mart’s RFID mandate has
cost his company money, and he doesn’t expect a clear ROI on
Welch’s investment in tags, hardware, and software. Now,
Welch Foods is gearing up for compliance with a similar mandate from Sam’s Club, which required pallet-level tagging as
of January with case-level tags by October and some item-level tagging next year. Biggs joked that although Sam’s
Club—Welch’s third-largest customer—buys only seven
SKUs, tagging will be so costly that paying the retailer’s $2 per-unit fine for “non-participation” might be cheaper than compliance. (Sam’s Club has since reduced the fine to 12 cents.)
Welch Foods is getting some benefits from RFID, though.
Combining RFID data with software analysis, for example,
has helped the company reduce out-of-stocks and boost
sales of its juices, jams, and jellies at some Wal-Mart stores.
The Sam’s Club mandate, like its parent company’s fiat,
undoubtedly will spur more investment in RFID. And
Campbell said nobody should consider RFID to be down for
the count. The development of standards, collective industry action, technological improvements, and open sharing of
information will boost adoption, just as it did for bar coding, he predicted. “When coupled with process change,
RFID is going to be an enabling technology,” he said.
—Toby Gooley
Produce Association has established a new Supply Chain
Technology & Logistics program to help its members learn
about all areas of supply chain management. ... Container
and pallet manufacturer Orbis Corp. has purchased
Norseman Plastic Holdings Ltd., a Toronto-based manufacturer of plastic reusable containers, trays, bins, and pallets.
... Old Dominion Freight Line has opened a new 80-door
service center in Worcester, Mass. ... The assets of C&D
Robotics have been acquired by Euroimpianti SpA, an
Italian provider of robotic palletizing systems.
