To the relief of its vendor partners, Target has launched an RFID pilot program that is kinder and gentler than rival retailer Wal-Mart's.Meeting with suppliers in mid-August, Target announced that between 10 and 20 vendors would participate in Target's pilot program, which will begin this month. Each manufacturer will tag just three products. Like Wal-Mart's, the pilot will be launched at a distribution center in Texas. That DC will initially serve 10 stores.
Unlike Wal-Mart's pilot, Target's policy appears vendor friendly. Target has communicated to vendors that only a small number of products will be involved in the initial pilot. It has also promised to share all pilot results with vendors, something Wal-Mart has declined to do.
"Wal-Mart [took] this Draconian kind of approach, where everyone needed to get started on this," says Scott Lundstrom, senior vice president and chief technology officer at AMR Research in Boston. "Wal-Mart has been selective about the data [it] releases, while Target has promised a much more collaborative and open process with its suppliers. Target has engaged its vendors much more as partners."
Target will expand its RFID pilot in June 2005 to include its top 100 suppliers, which will be asked to add stock-keeping units (SKUs) incrementally for the remainder of the year. In December 2005, that group of suppliers will be expected to ship all products with RFID tags.
Target has earned praise for its willingness to limit its demands to what it can realistically handle. "Target has been very clear about the fact it's [testing] a small number of items going to a single DC," says Lundstrom. That's in stark contrast to Wal-Mart's approach, he says, referring to Bentonville's refusal to scale back on its demands. "They're holding a gun to their suppliers' [heads] and saying, 'You need to be ready to ship 100 percent of your products to all locations.' Most of those tags are going to destinations where they are not even processed."
Target and Wal-Mart have most of their top 100 suppliers in common. That has some predicting smooth sailing for Target's RFID project, since many manufacturers will already be in compliance with Wal-Mart's decree. However, other analysts question whether Target will be able to complete its data-synchronization program before its RFID project gets off the ground.
It's said that there's an organization for everything under the sun, so it makes sense for RFID—the hottest technology on the planet—to have its own advocacy group. Sure enough, the International RFID Business Association (RFIDba) announced its official launch at the Frontline 2004 Conference in Chicago last month.
Members of RFIDba, both solution providers and end users, will work together in a strategic partnership aimed at providing education and training and at ensuring the growth and successful implementation of RFID technologies. The association, through its various vertical industry committees, will serve as a forum for vendors and end users to come together and learn from each other and share successes and failures. The group is not intended to compete with any standards or trade organizations.
"With the rapid growth of the global RFID industry, now's the time for the creation of a dedicated international association that represents the global interests of the RFID industry," says Harry P. Pappas, the president and founder of RFIDba. "Through educational programs, the RFIDba will assist the end user community to better understand this new technology and to help them smoothly integrate RFID into their enterprises.
"We are moving into a new century and the business community needs to adapt to new technologies, just as they have done with the World Wide Web. RFID and other complementary technologies are helping to bring about another paradigm shift in the business world as we move to a global, real-time, digital economy."
For more information or to join the organization, visit rfidbusiness.org.