Archive for the ‘Sam’s Club’ Tag

A Step Back for RFID?

In my first blog post ever (beside my introduction), I spoke about Sam’s Club requirements regarding pallet, case, and item level RFID tagging for their suppliers.  Sam’s Club issued a letter in January 2008 with an aggressive schedule to require item level tagging by Oct. 2010.

However, Sam’s Club recently published a new letter to its suppliers dated Jan 15th, 2009.  At a first glance, the updated letter seems to be a step backward for RFID adoption:

  • Sam’s Club is reducing the fine for each pallet that arrives at its DeSoto, TX plant without an RFID tag from $3 to 12 cents per pallet (4% of the previous fine)
  • The updated letter stated that case level tagging is now optional (Jan 2008 letter mandated case level tagging by 10/31/2009)
  • The updated letter stated that the time line for item level tagging is now TBD (Jan 2008 letter mandated item level tagging my 10/31/2010)

The Sam’s Club initiative and DoD mandates for RFID tagging were cornerstones of RFID adoption.  What do you think of these new requirements?

Upon closer inspection, it doesn’t seem all bad:

  • Sam’s Club is established a new Supplier Council to help organizations understand the costs and benefits associated with pallet, case, and item level tagging
  • Sam’s Club has several RFID initiatives in development to include RFID enables point of sale (POS) systems
  • Case level tagging was made optional because the company feels that sellable unit (item level) tagging provides more benefit

In a way, I believe that Wal Mart and Sam’s Club are actually trying to speed up the adoption of RFID by ensuring their suppliers understand the costs vs. benefits as well push straight for item level tagging in the foreseeable future.  The letter acknowledges that suppliers will need 12 to 18 months to prepare for sellable unit tagging and that an appropriate time line would be developed.

If you want to read more, view the story at RFID Update.   Sound off and let me know what you think in the comments!

Sam’s Club RFID Fines

Beyond WiFi, one of my interests lies in RFID, another wireless technology.  I ran across this interesting story at RFID Update.

Nearly a year ago, Sam’s Club sent some of their suppliers a letter ( dated January 7th, 2008 ) requiring RFID tagging of shipments to the DeSoto, Texas distribution center by January 31st, 2008. In the letter, Sam Club outlined fines of $2 to $3 per each non-tagged pallet.

Additionally, Sam’s Club is requiring tagging at the case level to all distribution centers by October 31, 2009 and at the item level by October 31, 2010

Have you heard of a company that received a fine after last year’s deadline? Is this a program that is “all bark, and no bite”?

Is Wal-Mart trying to pass along the additional cost of handling non RFID tagged goods? It seems that it would be equally effective for Wal-Mart to negotiate different purchase prices with suppliers who do not implement RFID tagging. I would be interested to hear Wal-Mart’s reasoning behind the fines in lieu of their other options. After all, what happens to suppliers who chose not to pay fines?

This story is interesting to me from the stand point that it seems to further the precedence for one business to fine another, rather than fines being levied by government or other regulatory bodies. Did this trend start with the Payment Card Industry? The PCI framework allows banks to fine institutions for non-compliance with their Data Security Standard, which is meant to protect card holder data.

What do you think about the situation?