))) Wal-Mart Outlines Tech Plans

Retailer will introduce new inventory process in
D-FW stores first.

Maria Halkias
November 8, 2003

Dallas-Fort Worth is the first region where Wal-Mart Stores Inc. plans to introduce technology that uses radio signals to identify products, according to suppliers who attended a Wal-Mart meeting in Arkansas this week.

Beginning in January 2005, three distribution centers and 150 stores in the area will go live with a technology that one day may replace the ubiquitous bar code. Product categories will begin using it as early as next year, they said.

Wal-Mart, the world's largest retailer, wants its top 100 suppliers to start putting radio-frequency tags on all the cases and pallets they use to transport product to the retailer's distribution centers.

Wal-Mart officials met with 128 companies to fill them in on details of its radio-frequency identification, or RFID, plan so far. The retail and consumer products industries are waiting for Wal-Mart to lead the way on the change before they invest in the technology.

Once the Wal-Mart project gets under way in Dallas-Fort Worth, additional regions will be added quarterly, suppliers said. Shoppers will notice "fewer empty shelves when the project begins," said Greg Gilbert, an RFID product manager for Manhattan Associates Inc., a software supplier that attended the meeting.

Tags initially will be visible to shoppers only on boxes containing large items such as televisions or toys, Mr. Gilbert said. During the meeting, Wal-Mart officials said they plan "to let customers know that the tag is on the box and will give customers the option of having it removed or disabled before they leave the store."

Representatives of Dallas-based Texas Instruments Inc. and Richardson-based GlobeRanger Corp. attended the meeting.

Bill Allen, e-marketing manager for TI's RFID systems, said Wal-Mart endorsed a type of chip that TI and several other industry players promoted and that TI has decided to make. Information can be added to the "read and write" chip multiple times. The chip will be adaptable to product categories and ultimately will contain serial numbers on individual packaging, he said.

"We think it's a positive that Wal-Mart is using themselves as a test case and has identified certain suppliers, such as a number of large pharmaceutical companies, to incrementally start the program as early as March 1 of next year," said John Koenigs, chief executive of GlobeRanger, a company that makes software that tracks inventory and logistics information based on RFID-generated data.

"Wal-Mart reaffirmed their solid commitment," and other high-volume categories will follow as early as May, Mr. Koenigs said. "It's starting sooner than the January 1, 2005, date."

Arkansas-based Wal-Mart has used neighboring Texas — its largest state market — to test and introduce store formats such as SuperCenters and Neighborhood Markets and technologies including self-checkouts and e-checks.