Window on Organizations: Wal-Mart Grapples with RFID
1. Since Wal-Mart’s business model is “based on selling a wide variety of general merchandise at "always low prices”” (http://en.wikipedia.org/wiki/Wal-Mart), RFID technology would help keep those low cost products in stock at all times. One of the deterring factors of having everyday low prices is the turnover of stock. RFID technology would allow for replenishment of stock quicker than without, and would cut down or eliminate time for the new stock to replace the empty shelves. RFID technology would reduce costs through making the process more efficient, and would increase sales to meet the impending demand for the out of stock products. This would allow for increased profit sales as the turnover rate would be greater. It would allow suppliers to be efficient in shipping, as they would be aware when stock was getting low. They, in turn, could prepare shipments at the discretion of the transmitted data, and diminish costly mistakes, such as shipping delays, and employee incompetence with ordering. Suppliers would know ahead of time that stock was getting low in certain stores, and respond in a timely fashion.
2. With the original demand for suppliers to tag products scaled back to 65%, management was sending suppliers mixed messages. With such a large scale operation, it was expected that suppliers would not be able to comply in such a quick manner. Even at 65%, suppliers had troubles implementing the changes. Management was demanding that suppliers completely change their technology and business processes, which for some suppliers, was not worth the time. Only 30% of suppliers made the major changes, while the rest simply “slapped” on the RFID tags to a small percent ...