Baseline Magazine featured a well researched story this month on Wal-Mart's RFID initiative. According to the article, initial results from Wal-Mart's RFID project are not very impressive. Inventory levels have gone up. Operating costs have gone up. And Wal-Mart remains steadfastly committed to the project.

In my personal experiences, supply chain leaders from the various companies we deal with have gone from talking about RFID as the dominant topic of conversation, to a post-conversation annotation. If your company always approached RFID with care, tact, and a deep sense that you need to do a whole lot more research before considering implementing the technology, then RFID's lack of pervasiveness is not surprising to you. Many of you have already been nibbling away at the RFID ROI proposition by implementing a supply chain visibility solution. In fact, by reaping the low hanging fruit from visibility solutions, you are pushing your ROI for RFID out that much further. Still, if you're like most supply chain experts, you also know that eventually this technology just has to succeed. It's a no-brainer on so many levels. Articles like this are great lessons-learned documents for the rest of us.

What, therefore, are the reasons behind Wal-Mart's "faltering RFID initiative". Is it the technology? Is it still too expensive? Is scan accuracy still too low? Or is the problem with Wal-Mart's implementation? Was the project timeline too aggressive? Did Wal-Mart's edict of forced compliance turn its partners off to the idea, or perhaps, caused their own projects to fail due to time and budget constraints?

I suspect that all of these are factors in these initial results. As a project manager at heart, I tend to focus on the problems in the management of this project. When building a project team, you need consensus from your stakeholders (in this case, the 600+ suppliers Wal-Mart managed to get involved). How many of these companies saw RFID as adding to their own bottom lines? I just don't think Wal-Mart did a good job at imbuing these partners with a sense that the project would be good for everyone, not just Wal-Mart. This is exacerbated by the fact that the brunt of the project costs were to be borne by the suppliers. Add to that the fact that RFID tag prices have not moved much, and the value proposition for these suppliers looks pretty dismal. Companies like Best Buy are turning more to in-store implementation of RFID now, and I suspect that's because you can take slap-and-ship into your own house, and all the benefits you reap are direct and immediate.

Another mistake Wal-Mart made was by plotting a five and ten year plan using technology which was still in the rapid evolution phase. Companies are now finding that the applications for RFID that are most readily implementable and with the fastest payback are not the same ones they thought about five years ago. How fast can a project the size of Wal-Mart's change focus?

As I finish reading the article, the primary thought I take away is that I need to stop associating the Wal-Mart project with the viability of RFID. It's fantastic that we can reference that project as a baseline, but other companies are showing that there is value in RFID in the present and it can work.

Jason Perrone

Manager of Professional Services

Blue Sky Technologies

jason.perrone@blueskylogistics.com