NYT: Wal-Mart Slows RFID Plans, Suppliers Resist

securitas writes "The New York Times' Barnaby Feder reports that Wal-Mart has scaled back its plans to deploy RFID tags because the majority of its top 100 suppliers will not be able to meet the Jan. 1, 2005 deadline that the retailer demanded. Suppliers are resisting Wal-Mart's RFID demand for a variety of reasons according to AMR Research. Only 40 suppliers will meet the deadline, with two suppliers 'so tied up in a complete overhaul of their entire information technology infrastructure that they have put off attempting to introduce radio tagging.' A more pragmatic reason for the delay is that 'no one who uses the technology has systems that can reliably read the information 100 percent of the time in factories, warehouses and stores; Wal-Mart said the rate was around 60 percent in its stores.' It's hard to make the case that RFID will help track inventory when you can't reliably find 40% of it."

Bad title

The title makes it sound as though Wal-Mart's suppliers are resisting the slowing of the introduction of RFID, while the truth is quite the reverse - that the slow-down is happening because of supplier resistence, not despite it.

Re:Bad title

It isn't even supplier resistance - they simply cannot get it implemented in time.

Walmarts great 'do as we say - sell for the price we say - dont be late - fuck you in general' policy may just be a little too oppresive after all.

It would be good if the suppliers could get a little more power back because of this.

Re:Bad title

Walmarts are a scourge on society.

Yes, I used to shop there. No, I don't any more.

I am willing to pay a little more for things that I need if my money is going to "stay local". For this reason, I don't shop at Walmart and, instead, give business to the local "mom and pop" concern.

They are suffering from what I term the "3G Effect". Any time you have a family business that grows into a large powerhouse, the 3rd generation of the family is the one that is spoiled / fucks up the company.

The 1st generation (the owner) cares about the business - its ideals, its goals, its employees. He / she treats it like another child, caring for it and nurturing it. Generally, it is not an evil company.

As the company grows and the children of the owner come into the business (2nd generation), things generally stay the same. The 2Gers respect the company and their parent. They saw the hard work and dedication that went into the company and want it to continue along the original path.

When the grand-children come on board (3G), they've only ever seen the company at the top - they've never seen the hard work that went into it. When it's their turn at the controls, usually just after the owner kicks, they morph the company into a "how can we make the most money possible?" organization - forgetting the community and employees that the 1G and 2G dedicated themselves to. Sometimes, the 3Gers don't get involved in the company and just live as spoiled, ignorant brats (Paris, although you are a 4Ger, this means you!).

Now, I call it the "3G Effect" when, in fact, the schedule could be moved up or back. In the case of Walmart, as soon as Sam kicked, the kids really started decimating the company by going offshore for more goods and putting the screws to the manufacturers.

Enough of my tirade....

so who benefits more

as a % out of this situation in profit and capital

Customer
Wallmart
Distributer
Manufacturer

then perhaps you can understand the remaining parties reluctance to make the expenditure

Roles reversed

Given that Wal-Mart has been bullying its suppliers since donkey's years, it's high time they got a taste of their own medicine. However, rumour has it that the Pedigree has pawed the line in this initiative. Only, they're calling it Arf-ID.

cough, sorry

Am I the only one who likes RFID?

I have an RFID card I leave in my wallet that allows me access to parts of my work building. much better than swipe cards.

I'd love them to be used in shops too. if you could just walk round a shop putting things in a bag, put the bag on a pay station, insert your credit card, type your PIN, and leave... I think that would be great, and a real case of technology actually making life better.

and the only people (*cough* luddites *cough*) I want to hear privacy complaints from are the people who are posting from an internet cafe, wearing a disguise, putting a tinfoil blanket over themselves and the computer, and then paying with cash they've cleaned any DNA from. and you guys probably don't even go to shops ever since they introduced the eeeeeevvvviiiilll of barcodes anyway.

Re:Am I the only one who likes RFID?

I don't have DNA anymore. It cost a lot but my right to privacy remains intact.

Re:Am I the only one who likes RFID?

addition: the system I describe above is what happens at my uni library. there are self-service checkout (and checkin) stations. you scan barcodes but it also has a system to deactivate the alarm.

it's great and means you only need to see the people if you have a problem - that's the main reason for long queues at shopping etc - the 1% of the people that take up 99% of the time and delay everyone else.

(the books aren't actually RFID, but books are easy to stack and scan individually anyway, unlike a bag of mixed shapes and sized items.)

No, you aren't

I like RFID in the same way I like barcodes. Both are amazing for certain applications (RFID kinda beats the pants off barcodes for most things, though it needs to be backed up by a barcode and a human readable identifier...)

Their usefulness, however, in my mind, does not preclude discussion of their drawbacks. Sure, there are people who are screaming BAN RFID OMG WTF but they're already the fringe and are being officially and unofficially ignored. Just because some fringies are mewling does not make the entire line of inquiry invalid.

I think it is a reasonable point to make in general with technology that once we feel that our assumptions in terms of civil life are being changed, we have to step up and say something.

Re:Am I the only one who likes RFID?

A quick thought experiment: what would happen if "somehow" a pack of chewing gum would "accidentally" stick itself to the bottom of the pay station, still within reach of the RF ID?

How many customers would just shrug the unintended penny purchase off? Enough maybe for someone to haul a few large boxes of the chewing gum out of the back door after the day is over?

I don't know about you, but I always watch what the clerks scan and where they put it. Not because they are always evil - they simply don't care. And I would rather bring home everything that I bought. And I would hate to pay for something I didn't intend to purchase. With RFID such visual checks are hardly possible, unless you are a genius who can scan 30 items on your receipt and instantly correlate them to what you wanted to buy.

Re:Am I the only one who likes RFID?

You're thinking of this stuff as being way more powerful than it is.

Really, the best mass use of RFID is in a direct replacement of barcodes- RFID with a range of just a couple of feet extra beats the hell out of a barcode (think of trying to scan a barcode on a big case of soda... is it on this side? no! flip it over! oof. Is it on that side? no! Flip it sideways!)

Re:Am I the only one who likes RFID?

Well, it is more powerful than the bar code, according to your definition. A couple of feet? This would force me to pay for things that two or three other customers piled onto the belt. How do I sort them out? Ask them to pick it up and walk three feet away? And then scan again?

My point was that with bar codes the scanning speed matches human perception speed, and you can visually check how the barcode is used, and even how much you are being charged for each item (if you lift your eyes to the large display at the checkout position.)

I see no such verification possible if you just park your shopping cart at the pay station and the printer rattles out a list of 50 items that you may or may not have picked. You have to pay and move on, because this is supposed to be the "quick" line and the peer pressure won't allow you to linger and check everything in your cart against the receipt.

And if anyone suggests that there will be more such checkout positions - there will be less human clerks, that's the only sure thing in all this mess. That is bad in many aspects, primarily that there will be less jobs.

Re:Am I the only one who likes RFID?

assuming the RFID was still enabled after purchase, and someone wanted to track the packaging of an item I bought, and was close enough to scan they could see and touch it anyway.... sorry but I just don't care.

complain when it's abused, not because it CAN be abused. if you listened to complaints based on something COULD be a problem, we wouldn't have the internet or 99% of inventions.

implantation? you must be taking the piss. how many of us have barcodes tattooed on our foreheads? that's what happens to prisoners in all the sci-fi movies but years later we still don't have it! WTF!?!!123

Re:Am I the only one who likes RFID?

There are a lot of reasons for consumers to not want RFID tags. The primary reason I can think of is personal security. Would you want to literally broadcast the fact that you had thirteen platinum Visa cards in your wallet? Walk into the wrong bar one night and count yourself lucky to wake up again.

RFID reading is secret -- nobody needs to ask your permission to scan you. (Barcodes require you to expose them to the reader.)

There are also other privacy related reasons you might not want RFID tags in your clothing. What if you walked into a fancy restaurant and they scanned you on the way in, realized you had on Walmart underwear, and refused to serve you? "Excuse me, sir, but we don't serve your kind here. You can play dress-up in an Armani suit, but we know who you really are." Or, would you want that restaurant to throw you out before they seated you because they saw your Visa cards were maxed out? "Hey, I was just here to meet a friend!" "Sorry, sir; may I suggest you meet him at McDonalds instead?"

Re:Am I the only one who likes RFID?

There are a lot of reasons for consumers to not want RFID tags.

Perhaps, but you can't really think effectively about this with as much confusion about the technologies as you have.

Would you want to literally broadcast the fact that you had thirteen platinum Visa cards in your wallet?

1. The chips being put in credit cards are not RFIDs, they're contactless smart cards. There are many technological differences but the main practical difference is range. Contactless smart cards have a practical range of about four inches. Actually, I've rarely been able to read one at that range. Typically, to get a reliable read you need to get the card within about 1 cm of the reader. In practice, the most convenient thing to do is to lay the card on top of the reader.
2. Contactless smart cards and readers can't operate with multiple cards in range of the reader. If you put a stack of them on a reader sometimes the reader will be able to talk to one of them but usually none of them will be readable.
3. Contactless EMV cards don't provide any information about the type of card they are, so there's nothing to distinguish between a starter card with a $500 credit limit and a platinum card.
4. If the banks are smart and go to contactless cards with a PIN, the card will refuse to divulge any significant information until the PIN has been transmitted to it. PIN transmission is only done in a secure channel (encrypted).

So, your hypothetical barroom scanner must:

1. Get his reader within a foot (let's be generous) of your wallet.
2. Hope you only have one card in there, because otherwise odds are good he'll get nothing.
3. Have the keys necessary to establish an encrypted session with your card.
4. (Maybe, depending on configuration) Get you to tell him what your PIN is so he can send it to unlock the card.
5. Grab your card number and then use his hacked access to that bank's computer to find out whether or not it has a high credit limit.

I think he'd be better off looking at your clothes and car to see how much money you have.

There are also other privacy related reasons you might not want RFID tags in your clothing. What if you walked into a fancy restaurant and they scanned you on the way in, realized you had on Walmart underwear, and refused to serve you?

Well, retailers who plan to use RFID (and these are RFID tags, not smart cards) also plan to deactivate the chips at the checkout stand. Among other things, that will allow them to identify items that have been stolen, rather than purchased.

Or, would you want that restaurant to throw you out before they seated you because they saw your Visa cards were maxed out?

In this case the restaurant would have to do everything the barroom scanner would, plus perform a credit check. EMV cards don't provide (don't really even know) your credit balance. I suspect the restaurant's jet-setting clientele would get irritated at all of the extraneous credit queries. What would the restaurant do when someone walks in who has their credit records blocked?

There may be privacy concerns with RFIDs and contactless smart cards, but your examples are both infeasible and, frankly, rather silly.

When you take this into consideration...

I can only find what I'm looking for in Wal Mart about 60% of the time anyway, so really it all balances out in the long run...

RFID Threat

RFID technology is the greatest threat to individual freedom in our times. In order for there to be liberty, we must be free to be anonymous. "Tagging" things -- making items identifiable -- is really nothing more than a step toward tracking us (we are our things in spite of what fight club would have us believe). It all began when the U.S. laid back and allowed social security numbers to be attached to every citizen....

Finding 60% at Wal-Mart is Pretty Good

I usually can't find about 90% of what I'm looking for a Wal-Mart

Dammit!

Now my crazy grandpa will have to find a NEW Number of the Beast to frighten my kids with.

doesn't make sense

IT doesn't make sense that Wal Mart would continue to hold the Jan 1 deadline when they can't even get it working. If it isn't 100% reliable (or closer to it, anyway), both Wal Mart and all their suppliers would have to maintain two inventory tracking systems (old one + new rfid). With that much volume, that is no small thing.
Granted, that is normally how the bugs are worked out - you put it in and force the technology providers to keep working on it until it hits the 98%+ accuracy range.

Jerry
http://www.syslog.org/ [syslog.org]

RFID is not cost effective and is very problematic

I am currently working with one of the RFID companies that is "working" with walmart on the actual implementation of RFID. Let me tell you that there is no foreseable ROI in the near future. Currently at a cost of about 25 cents a tag, it is much too expensive to be worth it for anyone. The technology is in its infancy so there are so many problems we have encountered so far.

One of the problems is the tags. Not only do they cost so damn much, but they are also not very high quality. There's a feature called "locking" which allows you to set a number on the tag and not allow it to change, but when using this we have too high a failure rate to be effective (10-30% depending on the tag type). So we had to turn off the locking, meaning its much easier to change the unique number associated with the tags (which will be a problem when tags hit the retail sector) and now we only get around a 1-2% failure rate. But when doing high volumes, even this small percent is expensive to deal with.

Another is the hardware. Part of the tag writing problems we have seen may be due to the tags and/or the reader/writer units. But right now, some tags get created and written to with no problems, but when they go by a reader, the reader just does not see a number on that tag, meaning as i said before its either a bad tag or some sort of incompatibility/problem with the reader unit. Currently we are trying to get the tags applied cost effectively, but unfortunately its pretty much boiling down to using people to grab tags from a RFID printer and hand-apply everything.

We have also been having trouble verifying all the product on a pallet, and certainly cannot expect to read 100% of product 100% of time. Some product is easy to see, but depending on the density/material in the materials on the pallet, it can be very difficult to read many of the tags.

Software is another hinderance. While the company i have been working with has had its large share of problems in the last few months, they are getting better, but still are not perfect. And unless things work perfect, it can cause so many problems. One small chink in the software can make it inoperable (essentially crashing the software a-la Windows), but the software is slowly getting more and more stable.

The fact that Walmart madated this is certainly causing issues, especially for smaller companies and products that companies make almost no money on anyway. For us, we have a very expensive product so tagging at the case level is not too big a deal (it still has/will cost us millions of dollars to do), but just remember theres lots of companies that make almost no profit on the case level and that 25 cents for a tag eats pretty much all of their profits. RFID isn't going away, theres just too much potential. RFID can certainly work as a technology, as seen in the success of toll-tags like EZ-Pass and Smart-Tag. And many of these problems would have arisen anyway in the future, its just that the Walmart mandate basically caused the problems to happen faster.

Slowly but surely

Sooner or later, RFID is going to be a reality in Walmart, with other retailers to follow. Why? Because Walmart is the 800 pound gorilla of the retail world. And what the gorilla wants, the gorilla gets. Its only a matter of time. Resistance is futile.

The lead-in for this story made it sound like suppliers are standing up to Walmart on philosophical grounds, when nothing could be further from the truth.

Sounds about as good as its self-checkout scanners

I don't know who picked out the equipment for the self-checkouts at Walmart, but it's gotta be the worst available. Mis-scans constantly, thinks stuff is not in the bag when it is, made for midgets. (I'm 6'5" and it's a major pain after bending over the 50th time to put a single jar of babyfood in the bag that's only two feet off the floor.) And nothing like standing in line for 10 minutes just to watch the person in front of you have to get the attendant over three times in a row just to get one item scanned.

Between either waiting in line for a "real" (attended) checkout lane (Which there are less and less of since cheap walmart is pushing everyone to the self-checkouts) and waiting in line for the crappy self-checkout to work, I am seriously attempting to avoid Walmart whenever I can lately. It's too big of a pain in the ass. It takes 2 minutes to get into the store, pick up the few items I need (I'm talking about man-type shopping, not female shopping where they stare at everything and take hours to pick up a few items), then stand 10 to 15 minutes just to pay for it.

I think that if it takes longer to pay for it than to find the item and walk to the checkout, it should be free. I don't have time to stand around because Walmart is too damn cheap to make it convenient to do business with them.

Compare to the elf-checkout (er, that should be Self-checkout :) ) at Krogers/Bakers grocery stores. The Kroger scanners ROCK! They work pretty much flawlessly. The bagger is at a more realistic height (rather than assuming that EVERYONE is in a wheelchair), and you don't stand in line for 10 minutes just to watch the person in front of you have to get the attendant over three times in a row just to get one item scanned.

The issues are not just the tags themselves

My company designs and sell equipment to the producers of corrugated and solid fiber packaging. We don't deal with the IT aspects of RFID. However, there are a number of implementation issues which are affecting this part of the supply chain.

Increasingly, recycled paper fibers are being used to make boxes in the U.S. Some of that is scraps or mistakes from the box plants, some is recovered material.

This stuff is dumped into a chemical bath to seperate the paper fibers, adhesives, inks, etc. then run through various filterations to make sure only the paper fibers are recovered. That's one big part of the problem. RFID tags aren't necessarily removed. They must be large enough that they won't slip through with the paper fiber. If they do go through, the paper will be messed up which can damage the machinery which works with it and also the tags might still be active.

Another issue is related to signal strength and resiliency. There's been work with conductive inks. The idea is to print an antenna pattern on the inside of a box to which the RFID tag is attached. This is supposed to help the tag have a greater detection range. However, regulations and technologies for using conductive ink are different than regular inks. Metallic inks are powdered metal suspended in a carrier. Those little pieces of metal aren't as easy to flush from printing machines as clay or organic-based colorants.

There are also stringent regulations concerning the manufacture of paper products used for foods and medicines. They cannot exceed very minute limits of metallic content. Little specs of metal can come from the automatic sharpening of rotary knives which happens during conversion from paper rolls to corrugated or solid fiber board. Imagine the problems which would happen from conductive inks...

Hold on a second

So according to the second link Walmart achieves 60% accuracy with the scanning of the tags?

I know that they are considered to be top-of-the-pops in logistics, but when you achieve 40% failures in stock maintenance and merchandise flow I wouldn't call that state of the art, I'd call that outright shoddy (even considering that accuracy _might_ get to 95% one day)

By calling up the psychic hotline (9$99 a minute) they probably achieve more accurate results..

(But then again, maybe it's just an engenious way to piss of their suppliers).

Bodes poorly for consumer use

So here we have an RFID implementation in a controlled environment - one in which everyone is babying the system along and trying to make things work.

If the system is this unreliable in the warehouses then imagine it in the consumer world (ie checking out a whole buggy of products at a time), where the complexity, volume, and general misuse will be amplified. Throw into that mix people actively trying to circumvent or sabotage the system, and things look pretty dismal.

Dan East

hmmm....

It's hard to make the case that RFID will help track inventory when you can't reliably find 40% of it."

Sounds like Kmart to me.

New rule of thumb

New rule: Anything that Wal-Mart wants is inherently evil.

Therefore, RFID must be evil.

Now Wal-Mart is saying...

http://cnn.netscape.cnn.com/ns/news/story.jsp?id=2 004122712430002794526&dt=20041227124300&w=RTR&covi ew=

Think of the thieving applications.

When I was out Christmas shopping with my brother, he made sure his Canon EOS 1D was out of view before we locked his truck.

Walking across the parking lot, it occurred to me that people who are Christmas shopping quite often have gifts they bought locked in their cars. So all a thief needs to speed his holiday "shopping" is a RFID reader with a directional range extender antenna. Sit it in back seat, perhaps with an accomplice/operator, and cruise up and down the crowded parking lot, pretending to look for a parking space, while actually scanning all the cars. The guy in the back can read off what each car has, and when you find one with lots of pricey gifts, they can stop and break in, or mark it down for later robbery.

For that matter, if the thieves were of more the mugger variety, one guy could sit in a parked car near a mall entrance, and scan the people walking out, and contact the mugger via cell phone telling him who to target.

And I am sure that is just scratching the surface.

Wal-Mart employees rejoice!

I'm actually an employee, and let me tell you that the inventory system in place is pure junk. Although I'm sure we'd all love a new wonderful technology to help take care of the current problem(and it is a problem for productivity and thus price of product), we're definately doing better than 60% right now, I'd say closer to 80%. But is that really good enough for the world's number one retailer? I, and every single one of my fellow employees and managers, don't think so.

Re:Wait...

True but..
You need readers, a system to take the info from the readers (just a number) look it up in a database, download the real product info from database (price, what it is etc)

And we all know that new tecnologi is fool proff as soon as it is developed right?

Re:Wait...

Suppliers were due to have ability to tag at the pallet/case level. At current tag prices that's not to bad of a hit. However, the tags are the trivial part of an implementation. It's getting the data from the tags into your information infrastructure that will kill you. I've seen demos where pallets of case goods were trucked S-L-O-W-L-Y through an array of antennas and even at that rate one or more items on the manifest were not recognized. So, what do you do? 1) Check off each item visually? 2) Run around the warehouse looking for the missing items? or 3) Read the boxes with a barcode scanner? Bentonville, we have a problem.

Re:Wait...

I just went over costs with a local RFID vendor, and the costs are not as cheap as I was led to believe. Couple this with proxity challenged systems, and it's another solution looking for a problem the way I see it. Maybe later, but not now, thanks.

Re:Go-To Card

Radio noise is a big problem with RFID. Discrimination is another. Not racial, but ID discrimination. If someone is sitting in the first or second row with a 'go-to' card, the reader may have a tough time discriminating between their card and yours as you enter the bus.... This is a real problem with RFID as many such cards and tags can be read up to 17 feet away. People need to buy a wallet that is made from cloth with steel mesh in it.