Question

How can RFID technology contribute to the Walmart overall strategy?

Answer 1

            Headquartered in Bentonville, Arkansas, Walmart has more than 10,000 stores in the world. For a company like Walmart, the essential element of its success lies in how the distribution system works. In 2003, Walmart decided to replace its barcode technology with RFID technology. RFID stands for Radio-Frequency Identification. The decision was taken by the management with the thought that this would lead to fall in supply chain management costs and would increase the efficiency of the work as well. Durability, security and powerful sensors were the concepts where RFID seemed better than barcode.

           The objective behind choosing this technology was also to increase transparency in the supply chain , reduce labor costs and strengthen inventory control globally. RFID tags are valuable as they provide all the essential information related to what the product is, where it has been, and even when it expires. It provides all the information from production of a product to its picking, packaging and even shipping. It also helps in not running out-of-stocks for a large number of things.

           Walmart not only operates in its own country but also in a number of other countries and RFID technology helps in providing information about each and every unit electronically. All the information is available at the click of mouse. Computers communicate not only locally but nationally as well as internationally because of this technology. Walmart uses RFID tags to keep its shelves fully stocked. Walmart not only reduced its inventory levels but also improved its service levels drastically because of RFID. No other company was able to develop a more efficient supply chain and excel in the competitive market. Walmart was quick enough to tap the opportunity as and when it arrived.

             Even though the company faced a little resistance in the initial stages of implementation of this technology but the after effects and the results had amazing figures and proved to be fruitful. The company is able to provide low cost service to its customers because it was able to manage and reduce its operational costs long back with the introduction of RFID technology into the business. This is how RFID technology changed the game for Walmart.