SCDigest Editorial Staff

In what many are now referring to as the “post-Wal-Mart” RFID era, it may be worth looking back at the history of the bar code industry some two decades previously to see what lessons that experience has for the current RFID market.

Compliance Programs Take a Lot of Time: Companies almost always overestimate the time it will take for vendors to respond to compliance “mandates,” even if they swing a pretty large stick, ala Wal-Mart.

This is especially true if the costs of the program are high and fall almost exclusively on suppliers.

In the early 1990s, for example, Kmart announced several programs that included serialized carton labeling (UCC-128s) tied to advanced ship notices, and told some shocked vendors that they had only 90 days to comply, a virtually impossible deadline.

Few hit the target dates, and many weren’t complying years later.

The lesson: Don’t overestimate suppliers’ ability or willingness to comply with new requirements when developing an overall schedule for the use of a new technology such as RFID.

Identification as Part of Manufacturing Process is Key: Labeling or tagging anything as part of distribution processes can be very time consuming and expensive. Enabling that process to happen as part of manufacturing is often (but not always) the best choice in terms of cost and acceptance.

One reason why the Automotive Industry Action Group (AIAG) and US Department of Defense bar code labeling programs were so successful is that, in general, suppliers could easily do the labeling as part of manufacturing processes – no information was required on the label that would only be known at a later date. Ditto with basic case labeling in consumer goods to retail, where a case identifier (I 2 of 5 case code, the same for each carton of a given SKU) was used.

UCC-128 serialized bar code labels, however, did require order-specific information that meant the labeling usually had to be done as part of distribution processes. In the worse case, some retailers, such as Target, would order a full pallet quantity of goods, but then require that each case on that pallet receive a “mark for” label – a UCC-128 that identified the Target DC and then final store destination for each case.

This required vendors to break down pallets, label the cartons, and re-build the pallets, a very expensive process. It was much the same for many vendors participating in the Wal-Mart RFID program, because few vendors could reach the magic “tipping point” where volumes justified tagging in production. This operational challenge served as a major force of resistance among Wal-Mart vendors.

(RFID and Automatic Identification Article - Continued Below)