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CHICAGO - Wal-Mart Stores Inc. is working with its top 100 suppliers to deploy new radio frequency identification (RFID) tags for tracking crates and pallets in its supply chain beginning in January 2005.
The company announced its plans during the Retail Systems 2003/VICS Collaborative Commerce conference here.
RFID uses low-powered radio transmitters to read data stored in tags, at distances ranging from 1 inch to 100 feet. The tags are used instead of bar codes and can contain a lot more data, allowing manufacturers, suppliers and retailers to track and manage assets more efficiently.
By asking its top 100 suppliers to support RFID technology, Wal-Mart hopes to improve inventory management and gain better visibility into the supply chain, said Pam Kohn, VP of the company's global supply chain operations. Though RFID tags can be used to gather and track a variety of product-related data, Wal-Mart's initial effort will be narrow, focusing mainly on better inventory management.
Deploying RFID tags at the pallet and crate level with the retailer's top 100 suppliers will involve about 1 billion tags, she said.