Wal-Mart is throwing its weight around again; this time forcing vendors to invest in RFID by the truckload.
Compliance is a non-negotiable issue, although many vendors see the costly system as too new to be a prudent investment. Money invested now will simply be thrown away as eventual standardization comes into play.
But, waiting to invest means too short a learning curve that could stymie production and cause sales  to plummet. "It's a 'damned if you do, damned if you don't' dilemma," Noha Tohamy, principal analyst Supply Chain Group, Forrester, told NewsFactor.
Pedal to the Metal
But Wal-Mart is not the only driver behind this forced supply chain investment. The Department of Defense (DOD) also has mandated vendors use RFID so that the government can track inventory even on the battlefields of Iraq and Afghanistan.
The cattle industry is piloting RFID to track animals' health and exposures during import or export travels. Pharmaceutical companies are mandating the electronic pedigrees to weed out knockoffs and guarantee quality from the manufacturer.
Construction companies are mandating that manufacturers tag heavy equipment before it arrives at building sites. The United Nations may put RFID to use to ensure that goods sent through food-for-oil programs and the like make it to the right hands.
Analysts expect even more industries to issue mandates in the very near future. "Wal-Mart and the others have set immovable deadlines within the next five to six years. Other industries will likely do the same close to that timeframe," Gene Alvarez, vice president of Technical Research Services, Meta Group, told NewsFactor.
Promises, Promises
In theory, RFID is a great thing. Supposedly, the system can eliminate delivery lag times, keep shelves stocked, determine point of origin, and track orders in the supply chain. It makes inventories more visible on a battlefield, in a warehouse, in a shopping cart, and even on a customer entering the store.
All kinds of useful data from just about everywhere can be retrieved from one tiny tag. And no line of sight is needed -- meaning no more need to line up an old fashioned bar code with an optical scanner.
A full shopping cart, or even a full shipping container, can be swiped in one move with no need to unload or look for the tags. Homeland Security thinks this a great way to quickly and accurately check incoming shipments for terrorist surprises. (continued...)
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