US suppliers are facing costs of tens of thousands of dollars each to achieve compliance with Wal-Mart’s new RFID tag targets, according to Sun Microsystems.
All Wal-Mart suppliers must tag cases and pallets by 2006 and the set up costs are “the price of doing business with Wal-Mart” said Sun Microsystems RFID manager Vijay Sarathy.
The retail giant has set a target for its top 100 suppliers to get the radio frequency ID tags on pallets and crates by January 2005. A further 20 suppliers have volunteered to meet the deadline.
Sun Microsystems has set up a laboratory for these suppliers to test their RFID solutions against stringent standards set by Wal-Mart on efficiency.
Sarathy said: “For a lot of suppliers this has come out of the blue, and Wal-Mart is demanding a 100% successful read rate on tags. This is a risk-management exercise for them.”
Bigger manufacturers would soon reap the rewards of RFID in improved business efficiency,