Wal-Mart Sets Model for RFID Hardware and Software Systems
The retail giant Wal-Mart is based in Bentonville, Arkansas and it was founded by the late Sam Walton (1918 – 1992). In the mid 60s Sam Walton was looking at technology to use IBM mainframes to store inventory data (Wallgum, p. 1, 2010). “Wal-Mart Stores Inc. built an inventory and supply chain management system that changed the face of business” (Helen, p. 38, 2002). Beginning his career in the mid 40s Sam Walton knew the importance of meeting customer’s needs and this ideology remains today.
According to Berman, “Wal-Mart Senior Vice President of International Supply Chain Gary Maxwell said that understanding the customer needs is the key to designing a fluid global operation” (Berman, p. 38, 2009). In 1975, to maintain inventory control in the warehouse and distribution centers, Wal-Mart leased an IBM 370/135 system and with the use of accounting software and was able to prepare income statements for each retail location (Wallgum, p. 1, 2010).
Diversity in supply chain networks and evaluating supply chains based on the needs of a particular geographic market are major drivers when developing an international supply chain” (Berman, p. 18, 2009). In 2003 Wal-Mart began utilizing an Electronic Product Code (EPC) to track pallets and cases in their warehouses and was capable of reading 100% of their palettes as they came through their warehouse doors with the use of a 96-bit EPC with a Global Trade Identification Number (Roberti, p. 1, 2010).
According to Roberti’s (2010) article the retail giant has shifted from tagging pallets and cases and have focused on tagging items with EOC. Items are put in categories beginning with men’s jean, socks, underwear, and other basics. “Items will be tracked using radio frequency identification tags based on EPC global’s second-generation ultrahigh-frequency (UHF) RFID standard and carrying Electronic Product Codes (EPCs). This effort is part of the next stage of Wal-Mart’s EPC RFID program, which will concentrate on the types of products that have multiple stock-keeping units (SKUs)” (Roberti, p. , 2010).
The tags will be read when the items are received by the stores and manufacturer’s are asked to not sew the tags into the items and they are to be attached to the items. Roberti also said, “New RFID hardware and software systems have been developed, not just to tell Wal-Mart which items need to be replenished, but also to show when items are on the wrong shelf or missing from a shelving unit” (Roberti, p. 1, 2010). EPC and RFID can improve accuracy in inventory and item availability according to Roberti, a study at the University of Arkansas RFID Research Center.