Wal-Mart Case Study – Rfid and Supply Chain Management

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Introduction

Technology is inevitable in every sphere of life today; it has always made things easier. Wal-Mart works on the same strategy, from the above description; we can understand how diversified Wal-Mart is and the volume of cargo it needs to handle for each of its business’s. Traditionally, it had started with computerization of individual stores with small billing machines and had then led to centralized billing for record keeping. The technology has grown by leaps and bounds and has become increasingly challenging to maintain large databases of information and maintain records. Powerful computers networked with high performance clusters maintain and store this data. This gives a picture as to how technology plays a vital role in today’s’ businesses.

Traditionally, technology has been upgraded in billing systems and for storage purposes. A new area where technology could be applied to, where many expenses could be saved was in inventory management and logistics. Wal-Mart being so huge, needed to keep track of men and material sent across different countries and had to maintain hundreds of warehouses across the world. Bar-codes have been initially identified as a suitable technology to meet the purpose.

But due to the limitations of barcodes, a new emerging technology called RFID has been identified to meet the demands. RFID is low cost Radio Frequency Identification system which requires minimum human intervention to carry out tasks ranging from billing to materials tracking and supply chain management. It is a small wireless device which can store good amount of data and can virtually be tagged to anything.

RFID is an electronic tagging technology as shown in figure 1 that allows an object, place, or person to be automatically identi¬fied at a distance without a direct line-of-sight, using an electromagnetic challenge/response exchange.

Fig 1: RFID Devices [Source: The Magic of RFID, Roy Want, INTEL RESEARCH, October 2004 ]

Why RFID over Bar-Code?

The ability to read without line-of-sight is the best advantage of RFID over bar-code systems. RFID readers can sense items even when the tagged items are hidden behind other tagged items. This enables automation. The challenging part of implementing RFID is that tagged items should not be missed by the reader due to interference, multipath fading, transient effects etc. Missed reads are an unfortunate reality with RFID systems. RFID uses a serialized numbering scheme such as EPC (Electronic Product Code). Each tag has a unique serial number. Serial number information is extremely powerful in understanding and controlling the supply chain and provides much more detailed behavior of the supply chain than can non-serialized bar codes such as UPC (Universal Product Codes) and EAN (European Article Numbering). Serial numbers have many advantages such as food freshness/expiration. This can tell how for how long an item has been in the supply chain where as such information is not captured in bar code system. Hence items can be reached the right place at the right time. Furthermore RFID implementation monitors theft too. For example if number of items reached at the retailer’s outlet is less than that was departed from supplier’s location, it can be easily tracked for. In all these ways, RFID systems have stronger sensor networking system or monitoring system than bar code systems.

RFID Infrastructure

Many software systems used in enterprise systems today are not designed to handle serial numbers as required by the RFID systems. The problem in synchronizing RFID systems to software system can be best described as the problem in synchronizing a speaker to a hi-fi amplifier. If the hi-fi amplifier is not synchronized to speaker there will be distortion in sound signal. Like wise there will be mismatch in capabilities and requirements if RFID system is not synchronized with enterprise software properly. A solution to this problem is to...
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