Wal-Mart's new system
This is pretty interesting. Maybe it will allow Wal-Mart to keep better track of inventory.
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"In control: Wal-Mart is trying a bar-code system that puts goods on shelf
By Jim Stafford
The Oklahoman
MOORE - Simon Langford pointed a hand-held computer at an electronic bar-code in the auto parts section at the Wal-Mart Super Center here and pressed a button. Instantly, the computer's small screen showed that Wal-Mart had 10 of the oil filters in the store.
The only problem, they weren't on the sales floor. Langford, Wal-Mart's manager of global RFID strategy, was demonstrating why the world's largest retailer is moving to radio frequency identification tags -- RFID for short -- which is a wireless form of inventory control.
"The system we have now truly doesn't know if that (oil filter) is on the shelf or in the back," Langford said. "RFID does."
So, beginning in January, Wal-Mart's top 100 vendors and 37 smaller manufacturers will begin shipping products in cases that are equipped with pinhead-sized, low-wattage transmitters that send out specific information about the inventory inside.
When the cases are loaded off trucks and pass through doors at Wal-Mart stores' loading docks, special electronic readers will register the information. Store officials will know they have, say, 10 dozen new oil filters in their stock room.
When the cases are wheeled out the stock room doors onto the sales floor, special readers will register that information, so Wal-Mart "associates," as the company calls its employees, will know how many have been stocked on the shelves.
The wireless system will enable the company to know how many items of a certain products are in the store and where they are -- on the floor off in the stock room, said Gus Whitcomb, the company's director of corporate communications.
Whitcomb assisted Langford as he conducted the recent media tour of RFID preparations at the Moore store. It will go live Jan. 1 with the technology.
"Our frustration is seeing this," Whitcomb said, pointing to an empty spot on the sales counter. "An Emory University study showed that retailers lose about 4 percent of their annual sales because of out of stocks."
Wal-Mart describes the RFID technology as the "next generation" of bar codes. "It's kind of like a bar code on steroids," Whitcomb said.
For now, the company will tag only cases and not individual items with the wireless technology.
Each RFID tag includes the transmitter and an antenna of varying size that is actually a thin layer of material that allows electronic scanners to see the information from up to 15 feet, Langford said. The tags cost from 19 cents to 40 cents each, although the price will no doubt go down as their use goes up.
Tests on the new technology began in April at Wal-Mart stores and distribution centers in the Dallas area, Whitcomb said. In Oklahoma, 16 Wal-Mart stores and five Sam's Club stores will be among the first wave of stores that launch the technology.
The use of RFID technology has raised a lot of red flags with privacy advocates, who fear that companies like Wal-Mart will go beyond merely tracking inventory to tracking the sales habits of individual customers.
Earlier this year, columnist Declan McCullagh expressed his fears about RFID use on the Internet technology site, CNET. "It becomes unnervingly easy to imagine a scenario where everything you buy that's more expensive than a Snickers will sport RFID tags," McCullagh wrote. "That raises the disquieting possibility of being tracked through our personal possessions."
However, the Wal-Mart officials showcasing their technology in Moore this week dismissed such fears. Wal-Mart is interested only in ensuring that its stock flows from distribution center to stores to the sales counter in a timely fashion, Langford said.
"We're not doing anything untoward," he said. "Somewhere around 20 million Americans are using RFID every day."
In fact, motorists who use the special "Pike Pass" to bypass toll booths on Oklahoma's turnpikes have been using similar technology for years.
At the National Retail Federation, spokeswoman Ellen Tolley said RFID technology is in its earliest stages for retail use, but that its members expect it to help them operate in a more "cost-efficient manner."
Whitcomb said the company is being up front with its customers about its use of the technology, taking a number of steps including media tours of its stores. In addition, Wal-Mart will alert its customers to use of the technology with special stickers throughout the store and on RFID-tagged products that include an electronic product code symbol that includes the term "EPC."
"All (customers) should see are the benefits if we have done our jobs right," Whitcomb said.
Langford and Whitcomb escorted a guest to the store's stock room, where a crew of "associates" were busy unloading a truck and its scores of merchandise-filled cases.
"It's all about moving the merchandise out on the floor," Langford said. "We can't sell the merchandise if it is back here."
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