When you’re the largest retailer on the planet, you have the power to direct positive change that benefits entire industries. Such was the case in 2003 when Wal-Mart announced what would eventually become known simply as “the mandate,” a requirement that, by 2006, its major suppliers equip all cases or pallets of products with smart RFID tags. This strategy of requiring RFID tags for all shipment-quantity packages was quickly adopted by other major retail enterprises. Witness Target’s 2004 announcement that it too would require suppliers to follow suit by the spring of 2007. Perhaps not as well remembered is the fact that, in 2005, the U.S. Department of Defense also mandated shipment-quantity RFID tagging.
But now that Wal-Mart’s decade-old mandate has become the industry norm, what’s next?
The mandate recognized that for RFID technology to provide the greatest control over supply-chain flow, it had to be implemented cooperatively at the supplier end of the tracked chain, not just at the receiving retail end. But retailers are now realizing that case- or pallet-level tagging is, for some classes of items, still too little too late to realize optimum supply-chain control. For some enterprises, it will take ubiquitous end-to-end, item-level tagging to complete the picture. Fortunately, Zebra Technologies has both the expertise and tools required to enable enterprises to make the transition to this ultimate level of supply-chain control.
What factors argue in favor of end-to-end, item-level RFID tagging?
- Cost Efficiency: Is it more cost efficient to add the RFID-tagging step to the supplier’s production or packaging phase of the item’s journey, or to the retailer’s receiving stage? In most cases, just as with standard item-level bar codes, item-level RFID tagging can be most efficiently handled on the supplier’s end.
- Systems Coordination: Are the manufacturer’s, distributor’s, and retailer’s systems sufficiently coordinated to take full advantage of item-level RFID tagging? If not, do the benefits of establishing this level of coordination outweigh the costs? If the other factors in this list favor end-to-end, item-level tagging, the benefits of establishing coordinated systems will likely dwarf the costs.
- Item Differentiation: Items which present a high-level of differentiation, such as clothing for which one item “style” might be further differentiated by size, color, etc., are inherently appropriate for item-level end-to-end RFID tagging. If the individual items are, instead, homogenous commodities, the benefits of item-level RFID tagging may be insignificant.
- Item Value: Return on investment of RFID tagging items of relatively low value may be insufficient to justify the effort, but the overall costs of item-level RFID tagging is falling quickly as economies of scale increase. What we might consider as an item of too little value today might justify its own tag tomorrow as the per-item costs of implementation reach pennies per tag.
- Sales Window: Retail market factors often present surprisingly short windows of opportunity for moving items. Perhaps there are no better examples of this phenomena than in the clothing industry where anticipation of changing seasons and the vagaries of fashion trends can reduce sales windows to weeks, if not mere days, exaggerating the benefits of real-time tracking from supplier to the end sale.
Whatever combination of factors justifies the investment, end-to-end, item-level tracking requires RFID printers, encoders, and software systems that have the capacity, durability, and versatility to meet the extreme demands of high-capacity production and packaging lines. As the industry leader in marking and printing technologies, Zebra Technologies is uniquely positioned to enable your enterprise to take fullest advantage of the benefits of end-to-end, item-level RFID tracking.