36. Radio Frequency Identification• In efforts to implement new technologies to reduce costs and increase the efficiency, in July 2003, Wal-Mart asked its top 100 suppliers to be RFID compliant by January, 2005.• Wal-Mart planned to replace bar-code technology with RFID technology.• The company believed that this replacement would reduce its supply chain management costs and enhance efficiency.
37. • Because of the implementation of RFID, employees were no longer required to physically scan the barcodes of goods entering the stores and distribution centers, saving labor cost and time.• Wal-Mart expected that RFID would reduce the instances of stock-outs at the stores.• Although Wal-Mart was optimistic about the benefits of RFID, analysts felt that it would impose a heavy burden on its suppliers.• To make themselves RFID compliant, the suppliers needed to incur an estimated $20 Million.• Of this, an estimated %50 would be spent on integrating the system and making modifications in the supply chain software