The fun continues over the recent Wall Street Journal article that painted a negative picture of Wal-Mart's RFID rollout, and the value equation for Wal-Mart suppliers. (See RFID Program at Wal-Mart Going Slow, Wall Street Journal Says; Xterprise CEO Rebuts Negative WSJ Article; Wall Street Journal Gets at Least Part of RFID Story Wrong; Investment Company RW Baird Says WSJ Article on RFID Slowdown at Wal-Mart Part Right, Part Wrong; Just what is the “Sweet Spot” for RFID?).

After we've just published a Supply Chain News Bite in which Sara Lee's CIO George Chappelle offers a perspective that is roughly in line with the "there's not a lot of value for manufacturers now" line of thinking (see RFID Debate Continues, as Sara Lee CIO says Technology Limitations Mean RFID Not Ready to Deliver Benefits to Consumer Goods Companies Yet), we now a letter sent to the Wall Street Journal by Wal-Mart CIO Rollin Ford, who was formerly head of its supply chain.

We were baffled by your Marketplace article on Wal-Mart's use of Radio Frequency Identification and, judging by the calls we've received, so were many of our RFID-enabled suppliers. They, and we, know the fact of the matter is that RFID is increasing efficiency and providing customers with a better shopping experience. Stores with RFID have proven to be 60% more effective in replenishing items from the back room to the store shelves than stores without RFID. An independent study showed that out-of-stock items were reduced by 30% with RFID, and stores with RFID have experienced a 10% reduction in manual orders, leading to less excess inventory.

RFID is still in rollout, the critical stage before widespread implementation when any new technology continues to evolve. When fully operational, we expect the generated benefits of better tracking and moving of inventory, faster receiving, improved quality inspection, fewer out-of stock items and greater predictability in product demand to increase exponentially.

Wal-Mart strives to continually stand on the cutting edge of technology to bring better efficiency to our business and better prices to our customers. Our RFID initiative is one example of that approach. We will continue to hone and integrate our RFID technology with that goal, and that goal only, in mind.

Rollin Ford
Executive Vice President and Chief Information Officer
Wal-Mart Stores, Inc.

As printed in the March 7 edition of the Wall Street Journal