WAL*MART

     Wal*Mart is the largest retailer in the world with over $156 billion in annual sales revenue in 2005.  Realizing that small efficiencies in supply chain management meant large savings, Wal*Mart has been an industry leader in the research and implementation of RFID systems. 

     In June 2003, Wal*Mart announced its plan to require its 100 largest suppliers to utilize RFID tags on pallet and case level packaging by January 2005.  Additionally, three distribution centers and seven stores in the Dallas/Fort Worth area were to be equipped with RFID systems.  By January 2004, the number of stores to be equipped with RFID systems was set at 130, and an additional 30 of Wal*Marts’ suppliers voluntarily agreed to utilize RFID tags. 

     As an early mover in RFID system technology use, Wal*Mart used various pilot programs in its supply chain and stores to better comprehend the uses, benefits and problems associated with RFID systems.  In October 2004, the results of a 3 month, 24 store pilot program were announced.  The program definitely showed RFID systems reduced stock-outs by 16% and the items that were out of stock were restocked three times quicker. Armed with the advantages of RFID systems and implementation lessons, Wal*Mart by January 2006 had its top 200 suppliers shipping pallet and case level items with RFID tags.  By the end of 2006, Wal*Mart estimates 1000 stores will be RFID equipped, and by January 2007, expects its top 300 suppliers to use RFID tags.  ^{15, 16}

     As an early mover and leader, Wal*Mart was a strong advocate for worldwide adoption of Gen2 RFID protocols.  Wal*Mart expects to begin converting to Gen2 RFID tags in 2006 and plans to implement individual item  RFID tagging with the finial goal of using these tags to allow quick and accurate consumer checkouts utilizing RFID systems.

     Estimates are that Wal*Mart will save $6.7 billion a year in reduced labor costs, $600 million in out-of-stock supply chain cost reductions, $575 million in theft reduction, $300 million in improved tracking throughout warehouse and distribution centers, and $180 million in reduced inventory, and holding and carrying costs. ⁴