Sam’s Club Wants RFID Tagging from Suppliers
Sean Murphy, Associate Editor -- Supply Chain Management Review, 1/23/2008
Sam’s Club has unveiled a plan to use RFID tagging on every level — pallet, case, and item — by the fall of 2010.
In a letter to suppliers dated Jan. 7 of this year, Sam’s Club outlines a two-year plan to phase in the tagging, starting with pallet-level tagging on products coming into the club’s Desoto, Texas distribution center by next Wednesday, Jan. 30. As of Oct. 31 of this year, pallet-level tagging will be required at the company’s distribution centers in Kansas City, Mo., Dayton, Texas, Searcy, Ariz., and Villa Rica, Ga. As of Jan. 30, 2009, pallet-level tagging will be required at Sam’s Club distribution centers nationwide.
The club plans further expansion of its plan to include case-level RFID tagging phased into its centers from Oct. 31, 2008 to Oct. 31, 2009. Item-level tagging is planned as well, according to the letter, to be phased in from Oct. 31, 2009 to Oct. 31, 2010.
The letter makes it clear that RFID tagging is not optional for suppliers, at least on the pallet level. Sam’s Club plans to charge any suppliers who do not tag pallets at required centers escalating fees per pallet of $2.00 from Jan. 31 to Oct. 30 of this year, $2.50 from Oct. 31, 2008 to Jan. 30, 2009, and $3.00 per pallet starting on Jan. 31, 2009.
Susan Kohler, a spokesman for Sam’s Club, insisted that the fees mentioned in the letter are not a punitive “fine,” as they have been classified by some reports. The fees, she said, are part of what she called a “service” the company is offering to help suppliers who are not currently able to provide their own tagging yet.
Dean Frew, President and CEO of Xterprise, an RFID software company, said some of his clients, which include about 40 consumer packaged goods suppliers, have never used RFID technology before. Those suppliers will have to go through a crash course in using RFID tagging to prevent getting socked with fees from the club.
“It’s going to be a sprint for some of these (suppliers),” he said.
Kohler said the plan is a long-term one which will take some time to fully implement, and that the club’s competitors are likely to implement similar plans soon.
“It’s not as though we’re the only retailer that’s headed that way,” Kohler said.
The Sam's Club notice to it's Suppliers (PDF)
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