Wal-Mart's three-year push to get suppliers to tag cases and pallets of products with RFID chips has been a long slog. Many food and consumer-goods companies, surviving on slim profit margins, say they can't justify investing in the technology with no guaranteed payback.
One mid-sized company that has complied with Wal-Mart's RFID mandate is seeing the returns. Pacific Coast Producers sells $400m a year worth of packaged and canned fruit to Wal-Mart and other grocers that resell the food under various store brands, including Great Value at Wal-Mart. It complied with Wal-Mart's mandate in January 2006 and has since gone beyond it, says chief technology officer Peter Wtulich.
Pacific Coast is benefiting from Wal-Mart's in-store RFID effort. Data generated shows which stores aren't doing a good job keeping its products on shelves. Wal-Mart and Pacific Coast are using that data in conjunction with other information to figure out how to improve those stores' performance. The supplier has even created a cross-functional RFID team of IT, sales, its distribution center, and customer service employees, who work with Wal-Mart to discuss ways to improve inventory control and collaborate on ways to maximize sales during promotional events.
Source: Information Week, http://www.informationweek.com
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