RFID in 2007

9/13/2007

In many ways, the retail/consumer goods (CG) RFID space has been a "hurry-up-and-wait" market over the last three years -- waiting for globally harmonized passive UHF standards; waiting for price declines; waiting for major orders (most notably from large retail and CG manufacturers); and waiting for the tipping point. At present, many high volume applications such as pallet, case and item-tagging in the supply chain remain in the early adopter phase.

Like the bar code market, it is important to remember that compliance is king within the supply chain. As seen with Wal-Mart, Metro and the U.S. Department of Defense, customers can force the hand of their CG suppliers. Both have been extolling the virtues and potential for RFID to drive efficiencies in their supply chains and ensure products are on their store shelves when customers want them. Wal-Mart has been expanding its RFID rollout ever since its January 2005 mandate to top suppliers. In June, Metro told about 600 of its top suppliers it would require them to place RFID tags on all pallets shipped to 180 Metro locations in Germany, starting October 1.

While Metro and Wal-Mart both started investigating the potential for RFID around the same time, at the turn of the century, Wal-Mart has been the poster child for UHF RFID adoption in the supply chain. The next few months will show just how quickly Metro will be able to match Wal-Mart's level of deployment. After years of trying to coax suppliers to use the technology, Metro is underlining its commitment to RFID by introducing a per-pallet fine of 2 euros for suppliers that do not ship with RFID tags attached. It has said it plans to extend tagging to cartons as early as next year. Even Wal-Mart's mandates levied no penalty for limited compliance -- not even for non-compliance.