Three out of four of Wal-Mart’s top 100 suppliers will not be able to meet its January 2005 deadline for radio barcoding cases and pallets heading for its Dallas distribution centres, says new research.
Wal-Mart’s RFID targets look increasingly unrealistic as technical problems thwart progress and suppliers remain unconvinced there will be any short to medium-term return on investment, claims Forrester Research.
In a series of new reports on RFID, Forrester estimates the initial cost of compliance for tagging cases and pallets to three Wal-Mart RDCs in Texas could range from $2m to $20m.
However, the hoped for benefits, such as reduced product damage, fewer out of stocks and reduced shrinkage, would not be realised for several years.
And while RFID would increase the amount of information available in the supply chain, it would not make forecasts more accurate, nor help retailers predict promotional demand.
Likewise, until retailers and suppliers start synchronising their data and describing their wares in the same way, the benefits of technologies such as RFID as analysis tools will be limited.
From a practical point of view, however, the biggest issue remains the cost of tags. The price of tags is highly unlikely to fall to five cents in the next decade, predicts Forrester. The most commonly used tags will cost about 26c in 2012.
Wal-Mart’s RFID targets look increasingly unrealistic as technical problems thwart progress and suppliers remain unconvinced there will be any short to medium-term return on investment, claims Forrester Research.
In a series of new reports on RFID, Forrester estimates the initial cost of compliance for tagging cases and pallets to three Wal-Mart RDCs in Texas could range from $2m to $20m.
However, the hoped for benefits, such as reduced product damage, fewer out of stocks and reduced shrinkage, would not be realised for several years.
And while RFID would increase the amount of information available in the supply chain, it would not make forecasts more accurate, nor help retailers predict promotional demand.
Likewise, until retailers and suppliers start synchronising their data and describing their wares in the same way, the benefits of technologies such as RFID as analysis tools will be limited.
From a practical point of view, however, the biggest issue remains the cost of tags. The price of tags is highly unlikely to fall to five cents in the next decade, predicts Forrester. The most commonly used tags will cost about 26c in 2012.
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