Operating Strategies Case Study

Case Title:

Wal-Mart: Implementing RFID

Abstract:
In 2004, Wal-Mart announced its plan to implement Radio Frequency Identification Devices (RFID) technology. RFID was to be pilot tested at its three distribution centers at Dallas before being fully implemented. The top 100 suppliers were given a deadline of January 2005 to be RFID compliant. Wal-Mart wanted to revolutionise the supply chain through real-time tracking of products. According to an analyst, Wal-Mart would save around US$8.4 billion annually once the project was completed. However, during the initial phase of implementation, various issues like cost of compliance, consumer privacy, and insufficient knowledge of RFID tags made the suppliers skeptical about the system. Industry observers in general and suppliers in particular, doubted whether Wal-Mart’s RFID implementation was a wise decision.

Pedagogical Objectives:

• The efficacy of RFID at Wal-Mart distribution centers
• The reaction of suppliers towards RFID implementation
• The challenges faced by Wal-Mart during RFID implementation.

Keywords :  Wal-Mart; Radio Frequency Identification Devices (RFID); Tags and readers; Inventory control; Operating Strategies Case Study; Wal-Mart suppliers; Wal-Mart distribution centres; Consumers of Wal-Mart; Data storage; System integration; Tag standards; Linda Dillman; Electronic product code; Barcode; Auto identification standards; MIT (Massachusetts Institute of Technology) centre