Walgreens has fully integrated radio frequency identification (RFID) technology into its warehouse operations at the company's distribution facility in Anderson, S.C., according to RFID Update. The system tracks products in and out of the facility with RFID readers at its 45 dock doors. Readers track more than 170,000 totes and other reusable shipping assets that have passive UHF RFID tags attached.
"The significant thing is that Walgreens is using RFID in the core of its systems and they vitally depend on it. There is no backup system," John Beans, vice president of marketing at Blue Vector, told RFID Update. "If the system isn't running, they're not shipping."
Walgreens has been running the system since last year but only recently went public with the news.
"Walgreens has a long tradition of pioneering break-through technologies in the industry," said Randy Lewis, Walgreens' senior vice president of distribution and logistics. "Today, we're leading the charge to revolutionize our distribution center systems and processes to drive significantly higher efficiency, accuracy, and ultimately higher margins."
Interestingly, the Anderson distribution center has received a lot of national attention for Walgreens as 40 percent of the employees in the facility suffer from either a physical or cognitive disability.
The drugstore chain implemented the technology with the expectation it would make it easier for workers to do their jobs. In the end, Blue Vector's Beans said, "What they discovered is that the best system for their employees with disabilities is actually the best system for everyone."
Walgreens is currently installing an RFID system to support the same processes at its distribution center in Windsor, Conn., according to Mr. Beans. That facility, according to the Walgreens' website, will also seek to hire a large percentage of employees with disabilities. That facility is currently under construction and is scheduled to open next year.
Discussion Question: Does Walgreens' experience in Anderson, S.C. make the case for large-scale deployment of radio frequency identification (RFID) technology in distribution centers? What, if any, concerns would you have running a facility that relies completely on an RFID system?