I think companies should develop processes and systems to improve out-of-stocks  before the introduction of any "RFID" technology. Firstly, companies should create the processes and secondly, they could introduce technology to improve their productivity. If companies want to introduce technology and processes altogether they would have a higher risk of fail. Make a change by steps.

Jorge Vasquez

Priceline

Australia

This is a late response to Wal-Mart OOS article. Wal-Mart problems start in the backroom where pallet is stacked upon pallet and the Wal-Mart associates cannot access the bottom pallet or the pallet that is in storage rack with stacks of pallets prohibiting fork-lift access to the rack. When the major CPG companies send in merchandisers to stock shelves their hands are tied because they cannot access their products in the backroom. Result is empty shelves and the consumer ends up selecting a substitute product because they just traveled to a big box store and are not about to get in the car to find the merchandise in a competing store. Great for Wal-Mart and the CPG company whose product was selected, but this does not fit my definition of customer service.

Another point. So Wal-Mart does not want to do business with non-RFID suppliers. Great news for Wal-Mart but terrible news for the consumer. Again the consumer is pushed to the end of the line as another criteria is introduced to limit the available selection in a Wal-Mart store. If the trend continues, only a very limited number of manufacturers will be selling in Wal-Marts. Wal-Mart has already discovered that higher income consumers go elsewhere. They do not settle for the limited merchandising offered in a Wal-Mart store.

Jim Volovich

Company unknown

Dave Schneider [Pep Boys – Letter to the Editor, Jan. 26, 200 issue] is right on about the retail issue of on-shelf out of stocks being more order fill rate related that RFID.  RFID is not a panacea for out of stock.  Recent benchmarking studies of customer service stated that on-time and complete are, far and away, the key metrics for manufacturers.  This is what retailers’ demand of their suppliers.  Manufacturers would do well to fix their fulfillment issues as their number one supply chain investment and chase RFID as reliability / costs come into line.  For retailers, RFID may have a larger impact on the consumer shopping experience then fixing out-of-stocks on the shelf.

Richard A. Carman

Dechert-Hampe Consulting

As a shopper at Wal-Mart and a 30 veteran of distribution management, I have some questions on the RFID/out-of-stock study.

How does Wal-Mart add back the sale of the competitive product against the lost sale of the OOS product? My own experience at Wal-Mart is often having to pick something else because the major brand is the OOS item, and the Wal-Mart clone is on the shelf.

Secondly, only "missed" scans at the register, using current technology, vs. RFID "missing none" would impact the qty. on hand numbers, hence impacting the predictive OOS flag on their purchasing system. Is it possible that missed scans could justify RFID costs?? You would think lower labor costs at both receiving and at checkout are the only significant savings here,
over returns from lower OOS. Maybe I've "missed" something here.

I think RFID is much like Hybrid cars so far. Sounds great but does not stand up to sharp pencil just yet.

Gary McDougle
Distributor Operations Manager

BRG Inc.

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Do you have additional comments on the Wal-Mart out-of-stock study, our review, or any of these reader comments? Let us know your thoughts.