Wal-Mart Stores Inc. said on Tuesday it was on schedule to launch new radio-based inventory tracking technology next January and will meet with its 300 largest suppliers next month to hammer out details.
Michael Duke, chief executive of the U.S. Wal-Mart Stores division, made a rare public speech to reassure suppliers and competitors that Wal-Mart had no intention of delaying the official launch of radio frequency identification -- or RFID -- technology, which promises some day to replace bar codes.
"There is no plan to slow down the deployment," Duke said at a retail conference here. "We're full speed ahead."
Last year, the world's biggest retailer used the same forum to announce its plans for RFID, which uses radio frequencies to transmit information such as what a box contains, where the good were made or when perishable items expire.
Wal-Mart expects RFID to lower distribution costs, reduce theft and help it keep merchandise in stock. Critics contend the technology is still too pricey and could compromise consumer privacy if retailers use it to track purchases after shoppers leave stores.
Step-by-step roll-out
Duke said Wal-Mart was on track to have 137 top suppliers affix RFID tags to cases and pallets of goods by January 2005. But he stressed that the retailer would only use the technology in the Texas region at first -- a fact that he said led some people to speculate Wal-Mart was slowing down the roll-out.
"We didn't say we would be live in all stores, clubs and (distribution centers) for January 2005," Duke said, blaming media reports for the impression that Wal-Mart planned to start using RFID nationwide in January.
Duke is in charge of the massive U.S. store base, which generates two-thirds of Wal-Mart's revenues. But he has kept a relatively low profile since assuming that post last year.
Duke urged suppliers and competitors to get on board quickly so that costs can come down and RFID can become the industry standard.
He said Wal-Mart plans two supplier meetings in June, one with its 100 or so largest vendors, who will be part of the January 2005 launch, and another with the next tier of 200 suppliers, who are expected to be ready for RFID by 2006.
Duke dismissed reports that some suppliers were upset about Wal-Mart's deadline and having trouble meeting it, noting that dozens of companies had voluntarily adopted the January 2005 date even though Wal-Mart's mandate did not apply to them.
However, he did say that there were a couple of cases where suppliers had "other business issues" to work through, and said Wal-Mart was helping them to meet the deadline.
Duke said the retailer would give more details around mid-year on how it plans to use RFID, and hopes to roll it out globally sometime after 2005.
He compared RFID criticism to the backlash when bar codes were introduced years ago.
"I remember going through the transition to bar code technology ... and all the naysayers who said it wouldn't work," he said. "Well, obviously it did work."
