Drug suppliers will miss Wal-Mart RFID deadline

Wal-Mart Stores has confirmed that some of its pharmaceutical suppliers will not meet its 31 March deadline set to put radio...

Wal-Mart Stores has confirmed that some of its drug suppliers will not meet its 31 March deadline set to put radio frequency identification tags to packets they ship to its distribution centres.

Gus Whitcomb, a spokesman for the retailer, said Wal-Mart expected non-compliant suppliers to meet its directive by the end of June.

The 31 March date marks the first in a series of deadlines facing Wal-Mart's suppliers.

Wal-Mart told its top 100 suppliers that it expected them to comply with a January 2005 deadline to affix RFID tags to pallets and cases they ship to its three distribution centres in Texas.

The remainder of the suppliers are expected to comply by the start of 2006.

Next month, eight of the top 100 suppliers will begin a test involving selected products shipped to one of Wal-Mart's distribution centres in the Dallas-Fort Worth area.

The test will expand to Wal-Mart's other two distribution centres, but Whitcomb said the timing will depend on how the first test goes.

Whitcomb emphasised that Wal-Mart views its RFID initiative as a partnership with suppliers. He said those having trouble meeting the deadlines are being urged to discuss their problems "early on" with Wal-Mart "so that we can see if we can work with them on a solution that gets them in target with the deadline".

RFID tags can be used to track goods throughout the supply chain without need of manually operated line-of-sight scanners. The tags emit radio waves that are interpreted by readers and converted to a digital form that can be passed to computer systems.

Wal-Mart made waves last year when it issued its directive to suppliers about shipping pallets and cases with RFID tags, but other retailers have since followed suit. They include Target, Albertson's and European retailers Metro Group and Tesco.

Industry analysts have said they expected many suppliers to have difficulty meeting the deadlines and finding near-term benefits that make their efforts worthwhile financially.

Carol Sliwa writes for IDG News Service


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