Wal-Mart Stores Inc. last week canceled a closely watched experiment using radio-frequency identification systems to track individual merchandise. But rather than signal waning enthusiasm for RFID, the decision shows how companies are focusing on the most realistic applications of the technology.
The proposed "smart shelf" program was to be implemented with Gillette Co., tagging razor-blade packages in a Brockton, Mass., Wal-Mart store with small radio transmitters and using receivers embedded in shelves to track the merchandise.
But Wal-Mart shelved the program, saying it wants to concentrate on installing RFID systems to track pallets of goods. The move is in line with a strategy CIO Linda Dillman laid out in June, when she revealed that the company had tested RFID tags on individual items and cases and concluded that the technology for item-level tracking wasn"t ready for widespread use. Instead, Wal-Mart has told 100 top suppliers they need to be able to use RFID tags to track pallets of goods by January 2005.
Consumer-goods manufacturer Unilever Group is in the midst of its own trial programs and has similar priorities. "We"re focused on cases and pallets. That"s where we"re spending our time and energy because that"s where we see the benefit," says Simon Ellis, Unilever"s supply-chain futurist. "I"m not sure we"ll ever do item-level tagging, and if we do, it"s not going to be for a very long time, maybe five to 10 years."