SupplyChainDigest Editorial Staff

John Clarke, chief technology officer at Tesco, gave a refreshingly straightforward presentation on their RFID experiences, and shared directly with SupplyChainDigest his thoughtful responses to some of our questions on the state of the RFID universe. It was bullish without ignoring the current real challenges, and recognized this was going to take some time.

Tesco is one of the world’s top five largest retailers, with multiple store formats including grocery, hypermarkets, and convenience.

Clarke noted that before they thought about making suppliers begin tagging, they first wanted to gain real-world experience themselves, and so began a couple of internal pilots, such as an EPC-based track and trace applications for trays/totes of high-value-items (e.g., batteries) from DC to store.

When conducting initial pilots with suppliers, they also wanted to get multiple perspectives, and so in the initial group of 20 vendors, they included a mix of very large companies along with mid-sized and even smaller suppliers, to better understand the likely issues and challenges across the entire supplier base.

They describe RFID as “radio bar codes,” important terminology, as it suggests to internal staff and suppliers, a natural transition from the widespread use of traditional bar codes to something similar, but better. This is notably in contrast to the admonitions we frequently heard early on (much less common now), that companies using RFID as just a “bar code replacement” were somehow misguided.

Tesco puts RFID (and all new technology) through three filters: Is it better for the customer? Does it make life simpler for their employees? Does it lower operating costs? Clarke believes that RFID will positively impact all three areas, though he noted there were still many challenges, and that their current efforts are really to gain learnings, not to roll-out a full program yet. Key is to really determine how to change business processes, such as replenishment, and how to use RFID information effectively. Tesco is working selectively with suppliers at the SKU-specific levels, as it believes that returns will vary substantially by vendors and SKU types.

We caught up with Clarke after his presentation, and asked him whether RFID was really needed to re-engineer supply chain processes - couldn’t some of them be improved without using RFID at all?

“Well, you’re absolutely right,” Clarke told SCDigest. “However, given where we are at today, if you are going to re-engineer supply chain processes, you’d be crazy not to include RFID as at least part of that design.” While he recognizes there are still many challenges, including some specific to Europe and its regulations around reader protocols, in general “RFID prices are going down, benefits are going up, performance is improving, and customers like what they see,” Clarke told us.

We’ll note, however, that Mike Bargmann, chief logistics officer at Wegmans Food Markets, in his panel presentation noted that Wegmans is looking at re-engineering many supply chain process now, before they believe EPC is fully ready: “There are many areas where we don’t need RFID technology to change those processes, though it could add further improvement later,” Bargmann said.

Do we need more straight talk from early adopters about what’s really happening with their programs? What’s the right way to think about RFID and supply chain process design right now? Let us know your thoughts.