Walmart's retail link system - Essay Example

Organizations will use various tools including technological tools to make this process effective, and one among them, which is being commonly used now, is RFID. Understanding their benefits, many well known organizations Harley Davidson, Walmart, etc., are incorporating RFID as part of their SCM, and are getting good results. When one particularly focuses on the RFID usage in Walmart, it is clear that it has been improving its operations, although some privacy concerns are raised against it.

System of RFID RFID (short for Radio Frequency Identification) is electronics and Information technology (IT) based tool, which helps organizations to trace their finished products as well as the raw materials needed for making those products in the supply chain. Basic RFID system is made up of three components, a transponder (RF tag) electronically programmed with unique information, an antenna or Reader and a computer or a transceiver (with decoder). RFID works on the concept of invisible radio waves, emitted by the microchip, which are attached to the consignment of raw materials and products, or even individual products of a particular company including retail company, which are being transported.

Then, by using the reader or the antenna, which will detect the invisible radio waves, the position of the consignment or the product can be tracked. Also, the reader decodes the data encoded in the tag's integrated circuit (silicon chip) and then the data is passed to the host computer for processing and retrieval or transfer of the information. (“Technologies”). This can be used by the retail companies to track both the products and the raw materials being received from the suppliers, as well as the finished products, which are being transported to the supplier or distributor and the eventual customer.

In addition RFID can also be used by retail companies as part of their operational processes. Inside manufacturing or assembly units or even storing unit, RFID reader can identify individual materials, fitted with the RFID tag, and then route them to the relevant sections of those units. RFID in Walmart Walmart, one of the largest retailers, incorporated RFID tags as part of its operations in 2005, when it asked its suppliers to adopt this tool. The main reason for this decision is, it wanted its suppliers to know when the finished goods have arrived at the backdoor of the stores, thereby allowing them to make the plans.

Plans in the sense, where to put or route those products, ranging from distribution centers, shop floor to the intended customers. “The roll-out started in 2005 with a couple of hundred suppliers tagging cases being sent to 2 or 3 WalMart distribution centers in Texas” (“RFID News”). Schwartz pointed out another application of RFID in Wal-Mart, “In addition, another RFID tag placed at the entrance to the sales floor will tell the supplier, what is on the sales floor and what is left in the backroom.

” This was expected to aid the suppliers by giving them a good read of their inventory figures, along with sales velocity. However, suppliers opposed this initiative due to issues like installation and maintenance costs (which were put on them by Walmart), ROI (Return of Investment), etc. Such opposition led to problematic implementation of RFID, but Walmart does not want to let go RFID. They wanted to optimally use it and so in 2010, they decided to incorporate it in its 3,000 stores in men's apparel area.

“These are little radio frequency ID RFID tags that are attached to the apparel that allow us to—