Wal-Mart Begins RFID Rollout in Dallas/Fort Worth Area

April 30, 2004 -- Wal-Mart and eight product manufacturers begin a trial of a radio frequency identification (RFID) system at select Supercenters and one regional distribution center in the Dallas/Fort Worth area.The trial follows extensive testing at the company's RFID lab and months of collaborative preparation by Wal-Mart and its suppliers. Wal-Mart has set a January 2005 target for its top 100 suppliers to be placing RFID tags on cases and pallets destined for Wal-Mart stores and Sam's Club locations in the Dallas/Fort Worth area. Since announcing the initiative nearly a year ago, 37 additional suppliers have voluntarily chosen to meet the same date. The eight manufacturers participating in the first phase of the trial are The Gillette Company, HP, Johnson & Johnson, Kimberly-Clark, Kraft Foods, Nestle Purina PetCare Company, The Procter & Gamble Company and Unilever.Initially, 21 out of the more than 100,000 products carried in a typical Supercenter will be included in the trial. Cases and pallets containing these products will feature electronic product codes (EPCs) when delivered to Wal-Mart's Sanger, Texas, regional distribution center where RFID readers installed at dock doors will automatically let Wal-Mart's operations and merchandising teams as well as suppliers know this exact shipment of products has arrived and is inside the building. Cases will then be removed from pallets and processed as usual through the distribution center.Wal-Mart is targeting 100 percent readability of pallet tags through dock doors and 100 percent readability of case tags on distribution center conveyor belts.At seven pilot stores in the Dallas/Fort Worth area -- specifically in the communities of The Colony, Decatur, Denton, Hickory Creek, Lewisville and Plano -- RFID readers at dock doors will replicate the process from the distribution center by automatically confirming that this particular shipment is now in the store's back room. Individual products will then be stocked as needed.During the initial test, tagged cases and pallets may be distributed to stores throughout North Texas and South Central Oklahoma -- the geographical area served by the Sanger, Texas distribution center. As suppliers expand their efforts to meet the requirements of multiple retailers, it is possible that tagged cases and pallets will arrive at Wal-Mart stores around the country. However, readers will not be installed in stores outside the Dallas/Fort Worth area, so those cases and pallets would be handled as usual.Although Wal-Mart and its suppliers are focusing on case and pallet level tagging, there are instances where a case can also be a product's individual consumer packaging. This is especially true for electronic items. In the test beginning today, three products -- two HP Photosmart photo printers and an HP ScanJet scanner -- may feature RFID tags on the outer packaging consumers see on store shelves. That outer packaging will be marked with an EPCglobal symbol.Wal-Mart stores already feature signage notifying consumers that electronic tagging systems unrelated to EPC are in use for theft prevention measures. During the initial RFID test, Dallas/Fort Worth Wal-Mart pilot stores will feature supplemental signage to help customers further identify the tagged HP products. These signs, featuring an EPCglobal symbol, will be placed at relevant shelf and/or aisle locations.The remaining 18 products that will be delivered to the store in tagged cases or pallets for the test but will not be tagged individually on the shelf include various brands of paper towels, lotion, cat food, shampoo, feminine hygiene products, laundry detergent, deodorant, shaving cream, soap, toothpaste and peanuts.

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