An article on the RFID Journal website, written by Kevin Ashton, co-founder and executive director of the Auto-ID Center, claims Walmart has it right when it comes to its radio frequency identification technology program and all those who have questioned its implementation are working under three flawed assumptions including:
- Tag cost kills the business case for RFID with suppliers;
- There's not enough time for vendors to prepare;
- The technology is not ready for the real world.
On the first point, Mr. Ashton said that it was vendors including CHEP, Gillette, International Paper, Philip Morris and Procter & Gamble that adopted RFID first and not Walmart. The retailer started to see the promise of the technology after observing its use by suppliers. A key point was that the technology was able to help vendors lower costs, which could be passed on to the retailer. It would make no sense for Walmart to push a technology that increased costs for suppliers since it would eventually have to pick up the tab.
Companies have had since 2000, when Walmart first began to explore RFID, to get ready for its conversion. Even those who only got started when Walmart unveiled its mandate last year have had plenty of time, according to Mr. Ashton. "With few exceptions, companies that aren't ready for RFID have only themselves to blame," he wrote.
On the final point of whether or not RFID works, the author claims that numerous studies from "around the world have shown RFID is good enough now." The technology may not be perfect but the best way to improve on it is to create a mass market for it. Walmart is in the process of helping to create that market and, Mr. Ashton posits, so should its vendors.
Discussion Questions: Are Walmart and other advocates of RFID right? Are critics, as suggested by the RFID Journal article, operating under a set of "flawed assumptions?"