While many of its peers struggled just to meet the latest deadline, one of Wal-Mart's suppliers has leapfrogged ahead in the great RFID compliance race. Texas Instruments' Educational & Productivity Solutions (E&PS) business unit has bypassed the Gen 1 RFID technology stage and gone directly to Gen 2.
Texas Instruments' E&PS unit is just one of the 200 Wal-Mart suppliers that were required to begin shipping RFID-tagged cases and pallets to five of the retailer's DCs in January. That marked the conclusion of the second phase of Wal-Mart's now famous multi-phase RFID mandate. Those 200 new suppliers joined an existing base of 137 vendors (Wal-Mart's top 100 suppliers and 37 volunteers), which began attaching RFID tags to Wal-Mart-bound cases and pallets in January 2005.
Wal-Mart is now asking all of its suppliers to transition to Gen 2 in 2006 (the retailer says it will stop accepting Gen 1 tags by the middle of this year). But Texas Instruments' E&PS unit is believed to be the first consumer-goods supplier to use Gen 2 tags on shipments to the retailer's DCs. TI is tagging cases and pallets of its graphing, scientific and financial calculators bound for five Wal-Mart DCs using Gen 2 smart label solutions from its sister division, TI RFid Systems, as well as NCR Corp. and Zebra Technologies.
It appears TI is just getting started with Gen 2. Keith Hodnett, vice president of TI and supply chain manager for the E&PS unit, says that TI is prepared to expand its Gen 2 efforts with other retail trading partners as soon as they are ready. Target, Best Buy and several European retailers are likely to ask suppliers to switch over to Gen 2 RFID tags sometime this year.
As for its experience bringing 200 more suppliers online, Wal-Mart did not return phone calls asking it to comment. But industry analysts familiar with many of the rollout's participants report that the emphasis has been on basic compliance. "Those companies [the second 200] are complying, but just like the top 100, it's a long-term ramp-up," says Erik Michielsen, director of RFID & ubiquitous networks at ABI Research. "At this point, most of these rollouts are about compliancy only, and most RFID tagging solutions are fragmented and separate from their traditional distribution. Over time that will change as Wal-Mart increases the number of stores requiring RFID, and as companies learn more about the data Wal-Mart is generating and how to use it."