Wal-Mart to expand RFID use to improve inventory management

PUBLISHED : Tuesday, 21 October, 2008, 12:00am
UPDATED : Tuesday, 21 October, 2008, 12:00am

Wal-Mart Stores, the world's largest retailer, said it would expand the application of electronic product code (EPC) technology in its warehouses and stores to improve inventory management and boost sales.

EPC is a family of coding schemes created to replace the bar code, which has been widely used in enterprise supply chain management since 1974.

EPC was created as a low-cost method of tracking goods using radio-frequency identification (RFID) technology, which can transmit product data over a distance of 5 to 8 metres.

'By the end of this month, every Sam's Club in the US will be enabled for the EPC system,' said Simon Langford, director of EPC strategies at Wal-Mart Stores. 'And we will implement the system in over 3,000 Wal-Mart stores in the US.'

Sam's Club, founded by Wal-Mart Stores, is a chain of membership-only retail warehouse clubs in the United States. It operates 594 clubs in the US, three on the mainland and 121 in the rest of the Americas.

When a case of products tagged with RFID labels arrives in a warehouse, it is detected by readers on the door. A staff member can then use a handheld RFID reader to trace the case and process the product.

If every product is tagged with individual RFID labels, inventory levels can be recorded automatically and out-of-stocks situations reduced. Previously, the only way to monitor inventory levels was to manually count all items regularly.

'With two million employees in Wal-Mart worldwide, sometimes mistakes happen when counting stock,' said Mr Langford. 'An EPC system can increase data accuracy by 27 per cent to drive better in-stock control.

'In the past, one or two out of every 12 stock items actually got filled on the shelf to meet peak demand on a particular day. Staff members had to spend a lot of time searching for products in the back room. EPC systems can save time and help serve customers better.'

Wal-Mart expects the system to be widely adopted by its suppliers and competitors in the coming decade. Early this year, it partnered GS1 Hong Kong, an industry organisation, to encourage global standards of supply chain management and to promote EPC adoption in Foshan, Guangdong.

EPC is aimed at enhancing the efficiency of import and export activity in the Pearl River Delta.