BY BEN AMES, SENIOR EDITOR
THE RE-EMERGENCE OF RFID
THE STORY WAS SUPPOSED TO GO
something like this: On June 11, 2003, Wal-Mart Stores quietly ignited the RFID revolution. On that day, the mega-retailer issued
its now-famous mandate decreeing that its
top 100 suppliers be ready to place tiny
radio-frequency identification (RFID) tags
on certain incoming shipments by 2005.
Anxious to avoid being tossed off the shelves
of the world’s largest retailer, most suppliers
swallowed hard and fell in line. They invested hundreds of thousands of dollars in tags,
readers, and software that would eventually
transform supply chains worldwide, and an
era was born.
Except that it wasn’t.
The reality was that the RFID revolution
failed to unfold according to the script.
Despite the technology’s promise—think
absolute inventory accuracy, labor savings,
and enhanced sales through better product availability—RFID adoption progressed
in fits and starts. Part of the problem was
that the technology of the time was buggy.
Another part was its cost. In the face of
supplier resistance and mounting technical
problems, Wal-Mart revised its strategy and
expectations. And the vaunted RFID revolution stalled.
Now, 12 years later, that picture has begun
to shift again. The explanation lies largely in
the emergence of omnichannel commerce.
To succeed at omnichannel fulfillment—
whether that means offering
in-store pickup for online
sales, shipping items from
store shelves, or funneling
orders placed via phone, catalog, store, and website through
a single DC—companies
require 360-degree inventory
visibility and 100-percent accuracy. RFID can provide those
stock-tracking capabilities.
OMNICHANNEL DEMANDS
COULD CHANGE THE TIDE
Although RFID itself dates back to
World War II, its use in the supply
chain is a relatively recent phenomenon. Where logistics and supply
chain applications are concerned, the
rollout of RFID has come in three
major waves, says Justin Patton,
director of the RFID Lab at Auburn
University in Auburn, Ala. The first was
sparked by Wal-Mart’s famous 2005
deadline for retail case- and pallet-level
tagging. That was followed in 2010 by a
surge in item-level tagging of apparel and
footwear, sparked by the improved performance and falling cost of RFID tags
and readers. The latest wave is a rise in
tagging driven by the demands of omnichannel fulfillment.
“Omnichannel is a major driver of
strategicinsight
Despite its early supply chain promise (and
Wal-Mart’s much-hyped 2003 mandate), the RFID
revolution has stalled. Will the demands of
omnichannel commerce reignite it?
Has RFID
found a home?
