Walmart’s RFID Mandate: The Roadmap from Compliance to Transformative Supply Chain Operations
Whether new to RFID or optimizing an existing deployment, learn how to achieve Walmart compliance while maximizing your value from an RFID program with inventory accuracy, visibility, and automation across supply chain operations.
Video transcript:
Ashley Burkle, Business Development Director, Solutions Partners, Impinj: Hello everyone and welcome to our webinar, “Walmart's RFID Mandate: The Roadmap from Compliance to Transformative Supply Chain Operations."
My name is Ashley Burkle and I lead business development in the retail industry at Impinj and will be your moderator for today.
So, we're going to discuss the Walmart RFID mandate, including how to become compliant quickly and easily and the additional benefits your business can realize when adopting RFID technology.
So, Walmart has long been a leader in the retail industry's use of RFID and continues to drive RFID adoption across the retail industry. And recently, they've expanded their RFID item level tagging requirements to a dozen products or more, in areas more than just apparel.
So, the big question is, does your business have a strategy in place for complying with Walmart's growing RFID mandates? We are here today to help you make sure that you do. We're going to walk through all the steps for hassle-free Walmart RFID compliance with our RFID experts, and we'll go beyond just meeting mandate requirements.
Our experts from both Impinj and Barcoding will explore how implementing a full RFID strategy can deliver transformative benefits across your entire supply chain and operations. And then we'll also cover the fundamentals of RAIN RFID technology and walk you through a five-step plan for compliance.
So, whether you're just getting started with RFID or looking to take it to the next level, today you will walk away with a clear roadmap for this game-changing technology.
So first, I would like to introduce our two RFID experts.
So, Drew Gassiot is the director of global enterprise sales at Impinj and has more than 15 years of RFID industry experience with a primary focus on helping companies apply RAIN RFID best practices to improve operational efficiency and accuracy. And JW Franz is the director of IoT and automation solutions at Barcoding.
JW is a RAIN RFID expert with a deep knowledge of product transparency and traceability within the manufacturing, warehousing, and supply chain and logistics industries. So, Drew, JW, so nice to meet you. Welcome.
JW Franz, Director of IoT & Automation Solutions, Barcoding: Thank you.
Drew Gassiot, Director of Global Enterprise Sales, Impinj: Good morning.
Ashley Burkle: Alright. So let's dive into the details of Walmart's RFID program and how companies can properly strategize and implement RFID, not just for compliance but also to drive business value. So I'll start with JW. So what is the Walmart RFID mandate?
JW Franz: Well, I think before we kind of go into the Walmart mandate, Ashley, maybe just a little context and history to it because this isn't something that just popped up yesterday. It's been actually a part of Walmart's history now for quite some years. And if you go back to 2004 or 2005, generally speaking, that's roughly when they first started working with their top 100 suppliers to talk about RFID enablement at the pallet and case level way back then. And, obviously, there had been a lot of successes that came out of that. Unfortunately due to some industry events, some litigation and such, that was kind of put on pause and put on the back burner for some period of time. But out of it came a lot of lessons learned, a lot of successes. And ultimately, as time has gone on and RFID has kind of represented itself...call it that...and within Walmart, they made another focus, another attempt to utilize that within their store operations, back around 2020, 2021. And at that time, they were focusing around how to utilize the technology to have better visibility of their inventory related to their soft goods or apparel-type items.
And out of that, they saw such great success, success being ensuring on-hand shelf availability, ensuring that they have the accurate inventory for us as consumers, whether we're buying it online or buying it in-store or a combination of both. But ultimately, with the successes that came from that next wave of RFID implementation, that's when they ultimately decided to then roll out the technology across other product categories, which are clearly illustrated here on your screen. So, you know, we've kind of gone in iterations and phases, but ultimately, what you're showing on your screen at this point is representative of where Walmart is today with their newest RFID initiative.
Ashley Burkle: Fantastic. And thank you for that background.
And, Drew, before we talk a little bit more about Walmart compliance and beyond, can you give us a quick overview of why this mandate is important?
Drew Gassiot: You bet. Happy to, actually. I kind of wish there was a different word besides mandate. RFID is a disruptive technology, and sometimes you have to make mandates to kind of break through to get the “value add” out of it. But in a nutshell, RFID is one of the most successful initiatives that Walmart has deployed to date, and it has given some pretty dramatic results that are out there. We don't have, and we can't share those specific ones, but what we can do is kind of talk about how on-shelf availability ensures customer satisfaction, how you can enable buy online/pickup in-store, things like that, and we'll go into that in a bit more detail.
But if we look at an industry level, not Walmart-specific, but retail-specific, what you'll find is that on-the-floor inventory in a well-run store can be around 65% in a lot of categories and, in some cases, less, in some cases a little bit more.
But with RAIN RFID, what you find is inventory can get as high as the 95th percentile. You can maintain that 95 percentile level of accuracy, and that enables a lot of those other applications and use cases for ensuring customer satisfaction that are out there.
A couple of other things that are in the industry, if you look at it, RFID helps reduce out-of-stock. So, things that you think are on your shelf but actually are not there or might be in the store but not on the sales floor...it reduces those by roughly 16% in most cases. But in some categories, we've ran across and done tests and found that that actually increases as much as 50%. That's a pretty dramatic increase overall.
So we'll call it a mandate, but the mandate is important because, for us, it leads to greater RAIN RFID adoption, it helps automate the industry. But for customers and for people who go shopping or buy online, it helps increase the accuracy. And you know that when you put something into your cart online, it will be there when you check out and it'll get delivered or it'll be at the store when you pick it up.
So Walmart has kind of set the standard for what needs to be done inside the U.S. because they have established this mandate, and we expect a lot of other retailers to kind of follow along and take that leadership role. We'll see RFID grow in customer satisfaction and the ability to just buy things at the store or have it there when you get there...it's going to be huge.
Ashley Burkle: Absolutely. I think as shoppers, we feel that as well. So thank you.
Talking a little bit more about the mandate, what are some of the specific product categories? I know we saw a few on the slide. Is there an expected next phase? I believe that'll be a phase three. Any insight into who will be impacted? What categories could be impacted?
Drew Gassiot: Sure. So if you look on the right side of the screen there, you'll see most of the Phase 2 mandate items that are out there, and those are in the process of being deployed still. And there's no...I don’t want to assume that I can speak for Walmart...they have their specific categories that are out there...but since we're a global company, we do have some idea of what's happening across and what other retailers are doing. So there are some pretty good examples that we can follow. If we look to Latin America, many of the Latin America retailers have been some of the earlier adopters for apparel, and they're continuing to adopt more into accessories in a lot of the categories that you'll see with Walmart. But they're also starting to tag and track cosmetics and things like that.
So if you go to some of the retailers in, say, Brazil, you will come in and you will see that there are going to be little RFID tags on a lot of the cosmetic items that are out there. So I wouldn't be surprised to see, you know, some major retailers, and again, not speaking for Walmart, but I wouldn't be surprised to see those starting to be tagged at some point in the future. It's a challenging item, but it's also one that you can't just substitute your foundation or your lipstick, you know, for another color if it's not in stock.
So it's one of those items that you have to have it there.
The other thing that we're seeing...and actually, I will say that Latin America cosmetics and also in Europe cosmetics, you need to correct that. And in Latin America, we're also seeing what we have in the U.S. called over-the-counter pharmaceuticals being tagged that's out there. So there are a lot of things that are being tagged just to ensure that they're in stock and that if there's a recall, they can identify those and pull those off the shelf that’s out there. And interestingly enough, not so much in Europe...a lot of the over-the-counter items that we pick up in the U.S. or in Latin America...those are behind the counter in Europe. So we're not seeing that adoption happen in Europe, but in countries where you have access to aspirin, Tylenol, ibuprofen, things like that that you can readily pick up, we're starting to see those things getting tagged, and so I would expect to see that make its way into the U.S.
Last but not least, some grocery stores in the U.S. are starting to tag more perishable goods, and so there seems to be a big interest in things that are baked or things that are fried inside the store. So if you think about those deli items, we're seeing some things picked up there. And again, just to be clear, I'm not saying this is going to be Phase 3. I'm saying this is what we're seeing as emerging trends, and I would expect, you know, that we will see major retailers starting to take those types of approaches in the near future.
Ashley Burkle: Yeah, absolutely. Well, thank you, Drew. I mean, I think we're seeing trends as you pointed out. I think we're seeing adoption across the retail industry, going through different regions and how this initiative by Walmart is definitely groundbreaking for so many other retailers.
So before we go deeper into the compliance requirements and the strategies, I think it might be helpful to level set on what is RFID technology for those who might be new to it. So, JW, can you give us a quick overview explaining RFID, specifically RAIN RFID which is the technology that Walmart and others are utilizing, and why it's such a powerful tool for inventory management?
JW Franz: Yeah. Happy to. And it's funny because I was talking to an industry colleague this morning and, you know, we, as those that are focused in this space on a day-to-day, we take it – I at least – take it for granted and just assume that so many people know about this thing that we talk about so casually. But obviously, there are still many out there that don’t.
So, if you were just to take a few minutes to talk about RFID in general, I always refer to it as there's this umbrella of technologies under the world of RFID. And we're not going to go into any details or specifics of any one of those today, but there's a whole family of technologies that make up active RFID that's, you know, GPS-like capabilities.
Then there's this world of passive RFID technologies. But then even in the world of passive RFID, you have different frequencies that are attended or tailored for specific use cases. So you have NFC, which we're familiar with from our mobile pay and our phones. You have LF. You have HF. You have UHF. And I leave UHF for the last part because UHF is essentially what we're talking about today when we talk about RAIN RFID.
And I had to make sure when I joined this webinar that I wore my RAIN Alliance pin. And I point this out specifically because, you know, RAIN, the term RAIN, which now represents UHF passive RFID, is something that came to be in recent years from a standards body, an organization known as the RAIN Alliance. And the RAIN Alliance basically set out to do what other technologies have done in past years, which is to basically standardize a specific technology. So if you look at, like, Bluetooth or wi-fi, there are other standards in place that represent that specific technology.
So, similar to UHF passive RFID, or now what we most commonly refer to as RAIN, is essentially that, that GS1 UHF Gen 2 protocol, which I know is a tongue twister, and there’s a lot behind that in itself, but for the audience today, when we talk about RAIN or UHF passive RFID, we're effectively talking about the same thing, which is a battery-free, sensor-based technology that inherently uses radio waves that are transmitted from devices to detect tags. And those devices, those readers as we call (them), can be a handheld device, it could be a fixed reader with some antenna configuration, but ultimately, it's a device that's transmitting radio waves to a tag, like these here on my desk that I've gotten through my purchases at different stores. And those readers are communicating with the chips that are in these tags, and ultimately, it's a way to track items through the supply chain.
And one of the reasons that RAIN RFID has become such a commonly widely adopted technology is because it has all intended purposes in manufacturing, warehousing, distribution, and into the retail store. So it doesn't really have necessarily “limitations”...which is probably the wrong word...but it has a lot of applications across the supply chain.
And when I say supply chain, I mean well into the retail store. So that is ultimately what we're seeing today, being the most widely adopted for supply chain and more so in retail apparel that we're talking about.
Ashley Burkle: Yeah. Fantastic. I always say that RAIN RFID is the gift that keeps on giving because from the time you tag it, until it leaves the store and possibly comes back in, you're able to track that item and know more about that item. So it's very, very interesting. Thank you.
JW Franz: And, if you don’t mind, I clearly missed the key differentiator because most of us today are very familiar with barcodes, right? So when we look at how RFID is comparing to other similar technologies that are truly complementary to one another, as we look at how barcode is used in retail, you know, scanning one tag at a time with RFID, now we can read tens, hundreds, thousands of items in a fraction of the time. So that's inherently where it also provides performance differentiators versus barcode technology. Sorry about that.
Ashley Burkle: No, no, it's true, right? And inventory being the most important part of a retailer's business, knowing what you have and where you have it and being able to do that quickly and as often as you want is obviously a huge benefit to any retailer.
And speaking of that, so Drew, can you talk a little bit about why you think Walmart would be implementing this mandate and why now?
Drew Gassiot: Sure. I guess first, I should say I'm a little bummed now, JW. You wore your pin, and I have a pin. It's in my backpack. I just completely forgot to wear it, I should have done that, so bad me.
So to your question, if you look at it, I mentioned early on that if you go out there, you’ll find quotes where, Walmart, you know, has said, you know, RFID is the most successful deployment for technology that’s out there, looking at the retail floor. And JW touched on it when he said that, you know, compared to barcoding, it's vastly scalable. So instead of scanning a barcode at a time, I can pull a trigger and read multiple tags through the protocol and the approach that RAIN RFID does. And so it gives you this capability of inventorying entire shelves or entire departments in minutes, what used to take hours.
And that overall increases your on-shelf...availability, and that increases your customer loyalty. And, you know, people have the brands they're looking for.
Outside of Walmart, there are a lot of retailers that are always looking to...actually inside Walmart too...retailers are always looking for some approach to increase their advantage. If I go to a store and they always have what I'm looking for, chances are I'll return to that store because I like the availability. Or, conversely, if I try to buy something online and have it shipped from the store or if I want to buy something online and pick it up from the store, inaccurate inventory might allow you to actually place that in the shopping cart and order it, and then you might get a back-order notification or some sort of cancellation. And that's the opposite of customer loyalty. That's going to reduce...decrease customer satisfaction.
So when you look overall, most retailers are trying to really increase their buy online/pick up in the store.
And, obviously, if you look at the trends and if you read the Walmart quarterly reports, you'll notice that they're huge on in-store fulfillment. And if you go to a Walmart store, you can experience the in-store shoppers yourself. You'll see them going around filling multiple orders. That's a huge area of growth that's out there.
So it's all around ensuring that you have the product in the store, that you're maintaining adequate inventory levels and getting those onto the sales floor so those can be picked and sold. So it's pretty simple. It's all about increasing the overall accuracy in your total supply chain.
And I don't want to...and everybody always brings up COVID, you know? And I try to think that we are in a post-COVID world. That being said, one of the things that came to light during COVID is supply chain issues. And visibility to your supply chain and visibility to what was in the store became super critical. And not Walmart, but retailers in general, if they had a pretty good understanding of what the supply chain was, you had this general, not “down to the item level” understanding, and you were pretty comfortable...that was the status quo.
And then what happened as all of the supply chain shortages came into play, the status quo just didn't cut it anymore. You had to have a much more accurate understanding of what's going on and what's inside your store.
So, that also increased the buy online/pick up in store, or buy online/ship from the store. So all of those benefits combined. You know, we see other big box stores. You know, Target has their initiatives. And if you look, you'll see Costco has their initiatives that are out there and then stores, like Macy's, Dillard's, Nordstrom. All of those stores are in the process of putting some sort of RFID initiative in place. So it's going to grow.
And at the end of the day, the benefit is the consumer. That's what it's kind of all about. That competitive nature of ensuring that products are there. It's exactly what you want at the right place at the right time, And I think “right place, right time”...that's one of the jingles from all the stores, right? So you'll see those continue to grow, and I think you'll see the supply chain overall...it'll be a great experience for the consumers as the technology is adopted.
Ashley Burkle: I agree. Again, as shoppers, we feel it when the retailers are on top of their inventory in their operations. I think as you pointed out as well, Drew, post-COVID, understanding the cycles that retailers went through during that time period and after, RFID is here to stay. And I think we'll continue to see more adoption by retailers, and that's only going to continue to grow. And I know that I've worked with many retailers from the start of their journey and implementing RFID tagging is not without its challenges, especially for suppliers who are focused on getting ramped up for a mandate like this. So for JW, Drew, what are some of the common pitfalls or hurdles that companies face when they're trying to implement an RFID tagging program? Maybe you want specifically, again, for compliance or this Walmart mandate. And how can those potential issues be prevented or mitigated?
JW Franz: I'm happy to start and then obviously Drew can chime in and piggyback anything that I say good, bad, or otherwise.
But no. If you look at the expansion of these mandates, you're getting into inherently different product categories that start to present their own levels of complexity just because of the sheer nature of what they are. And, as I continue to hold here, one of my hang tags that I got off a shirt from a previous purchase at another retail store...it's much easier in the manufacturing process to put a hang tag on a shirt, for example, that's RFID-enabled versus working with different products that make up those that are in, like, say, a Walmart store.
And what I mean specifically is one of the customers that we were working with earlier this year, they...obviously I won’t way names...but they manufacture a wide variety of products that could be paint to glues to other adhesive-like products. And, in talking with them and then going into the stores to see these products firsthand, it became really clear very quickly why they were having some levels of anxiety because some of the products, while they were ultimately removed from Walmart's list of required items to be tagged, they met some various exception criteria. There were still others that had to be tagged and it wasn't necessarily a challenge to read the tag, it was how to get the tag on the product.
And in this case, one of the things that they were really struggling with was, if you think about the big tubes of glue that go in the glue guns or the epoxies or whatever, there was a very specific place inside the tube that they wanted to put the tag because it was just based on their packaging criteria and other factors. And, not only was it a very small form factor tag that had to be put into a difficult place, but it was also how do you do this as a part of the manufacturing packaging process. So those are some of the challenges that they had to recognize upfront, because they still did not meet that exception criteria, which means they had to be tagged, so they did have to look at their internal processes and work with their packaging vendors and partners like Impinj and Barcoding to help them kind of go through that process to figure out how to not only get the tag on the product, but getting it on the product in a way that doesn't totally disrupt their process and still can provide them value.
So, I would say that those are some things to be realistic of is, you know, because these mandates, as we know, also have windows, you're usually given some advance notice that you're going to have to do this by such and such date. Don't wait until weeks before that date occurs to start to figure out these problems or these challenges that are going to be dependent on you amongst others within your organization as well as even some of your suppliers. So, that is something that we're just seeing firsthand as these...mandates continue to expand and grow, you're getting into other, more challenging tagging applications.
Drew Gassiot: That's good, JW. If I were to add a few things to it, I'd probably want to take just a little bit of a step back and kind of look at it from a holistic perspective.
My first interaction with what would be the modern RFID was in the mid to late nineties, and the Gen2 spec was passed around what, 2004, 2005?
So, you know, it's...we’re 20 years or so into this. And you would think that it's a lot more mature if you think about how wi-fi was adopted over 20 years, but it took wi-fi a long time before it was everywhere. So RFID, RAIN RFID is still somewhat of an emerging technology, and that means that there's a lot of companies that just don't have that in-house RFID expertise.
And I'll say, specifically, within the U.S., globally, there seems to be more of a linear adoption rate, and we've seen some ebbs and tides inside the U.S. It's been a couple of things that have affected the marketplace. So we'll go through a period of very rapid adoption, then a period of slow adoption, and then a period of rapid adoption. And today, we're in a period of rapid adoption. So it's not just Walmart. There's a lot of companies that are doing this.
And, in a period of rapid adoption, we will find new experts that come out. And so I would say, word to the wise: You want to research and ensure that you're working with somebody that is indeed familiar with RFID, that they have the experience. So you can reach out to Barcoding, you can reach out to Impinj, and we can definitely partner with you and ensure that you're getting quality advice.
And in the case of Walmart specifically, if you're a retail brand owner and you're part of what their mandate was to get items tagged, they actually provided some online training, and they would have seminars that would say, “This is what you need to do, and this is how you approach it.”
And it was a big help for the retail brand owners to get up to speed. The one thing that it did is it got a bunch of items tagged.
And what I would expect to be happening inside the industry is that now that we have all these individual items tagged, the retail brand owners themselves are using that same information that you're using for compliance with Walmart to be able to optimize and start working your supply chain systems. And, so that is occurring.
And if you're talking about what is the outcome or what are the challenges of the mandate, one is just getting everything tagged, you know? And then the second part is now that we're doing all this, we have all this information, let's get this information. And then the next thing is, like, OK...we have all this great information, and there's clear value to it. But sometimes companies have a little bit of a challenge trying to go back in and take this incredible amount of new information and applying it to their business processes.
Ashley Burkle: Yeah, absolutely. I mean, I think between JW and Drew, you've showcased that there is a lot of complexity to adopting RFID.
It's a proven technology, but for so many companies, it's not a technology that's necessarily embedded into their staff currently or into what they're doing. So having partners to shepherd them into how to really adopt a strategy and to comply is important. So I think it's a good transition for us to talk about the guide to Walmart's RFID mandate that Impinj and Barcoding created earlier this year, which lists five steps to take so you can reach Walmart's RFID compliance.
And the five steps include understanding your scope, finding an RFID partner that understands your business, defining a tagging strategy, defining a reading strategy, and identifying your earliest tagging opportunity.
So let's start with step one, understanding your scope. Drew, what should be the first thing someone considers when they're trying to understand their scope?
Drew Gassiot: So when we're trying to understand what a business needs....and in this particular case, it would be Walmart... So for Walmart, we're trying to understand: What is the minimal scope that would realize a benefit?
So, obviously, for Walmart, it's a mandate, they want these items tagged. So there are some processes that you have to put in place to be able to do that. And, if it's okay, I'm going to just take a step back. There's a mystery around RFID. I think you said...I don't know if I remember your specific term...but I think you said, you know, RFID can be complex, or it can be challenging. And the reason it's challenging is because there is a very rich set of best practices, and we really try to communicate all of those best practices, like (through) webinars like this. And there are numerous of them out there. But the propagation and the expansion of that knowledge is occurring. I just wish it could happen a little bit faster.
So all of those, like the CompTIA boot camps and things like that, there are a lot of people that attend those, and that really does help get the knowledge spread out there. So I would say, the first thing to keep in mind is, don't panic. There are methods that are tried, true, established, and replicable that you can do.
So you would apply this type of approach with a lot of other things. So, one: Start with the minimal scope – what is going to be there. Once you get into RFID and you understand what information can be harvested from it, and you're meeting that minimal compliance piece, then you can start to take a step back and understand those other applications or use cases or those thresholds of information that you want to have that will help your overall operations that are out there.
So, the most important step to getting started is to, one, determine if you're going to have a subject matter expert that will be somebody you hire, or as a consultant, or somebody you establish.
And I would say the inverse of that is what you don't want to do is just have a person that has a minuscule amount of knowledge. You want to find someone that is committed to understanding the technology, not, “I have to do this,” it’s an "I want to do this and I want to understand this.” So you want to identify that person that has the passion for improving the process and understanding how the technology works in real use cases.
So that was probably a little long-winded, but that would be step one for me.
Ashley Burkle: JW, anything to add?
JW Franz: No. Drew is spot on. One of the things that I was going to add at one point, just because you both have said it in different ways, is it's not a matter of if the technology will work. It's proven to work. It's just a matter of how it'll work with a part of your process. So, and I'm getting a little bit ahead of myself because I know that we're probably going to talk about this a little more, but yeah, you have to look at your people, look at your processes, and look at how the technology fits within that. It's not just starting with technology and expecting it to work. It will work, but just make sure that it aligns with how your business operates.
Ashley Burkle: Very, very important point, absolutely. So Drew, how can someone start to define their tagging and reading strategy quickly and effectively? What are the key factors to consider when selecting RFID hardware and software solutions to make sure you have a successful implementation?
Drew Gassiot: Sure. So, Walmart specifically, they have training, they also have guidebooks, and they use ARC...I’m sorry, Auburn RFID Labs for identifying those. There are classifications for product types and tags that have been approved to work, and that makes your selection process a lot easier. That's in a nice little guidebook, and I'll take a second to plug our guidebook. We have our guidebook, you can go to our website, I think Ashley will mention that here in a little bit, but it kind of gives you that shorthanded, abridged version where you can get a lot of information, a lot of quality information, in a very few number of pages to better understand what’s out there.
And then once you've identified your tags, the next part out there is really understanding where those tags need to be applied. And that’s where you have to start to assess your product packaging that’s out there. Then, there are processes that we follow, and JW can go into a ton of details on this. If there are specific use cases, we can go into them and say, “Here are a few things you need to take into consideration.”
One of the challenges we run into is people say, “Where do I put the RFID tag?” Well, it kind of depends. Just like you can’t just put a barcode anywhere, you can’t just put an RFID tag anywhere. Some thoughtful consideration needs to go into where the tag needs to go, and in this case, it’s not purely aesthetics. There’s some physics that are involved that you have to go into there.
So now you have your tags, where you want your tags to go, you need to work with an RFID vendor, you want to understand how you want these tags applied: Is it going to be a print-and-apply method, is it going to be something that will already be embedded into a tag? JW had the hangtag that he showed, and you know, sandwiched inside that material is the RFID tag and somewhere on the back side there’s probably the UPC code and the price. So all of that can happen all at once so it makes it very minimal to do that.
Now that you have your tags decided, you know where you want to put it, you really just want to go through and validate that everything works like it’s supposed to, and there are some very clear guidelines that Walmart has for that as well. So there are some testing methodologies that you can do, there are some certifications that you can get in place. And once you go through that, if you have selected an in-house subject matter expert, once they’ve gone through that, they’re going to have a pretty good working knowledge of RFID. And that same person that you use to identify where the tag goes, how it applies, and all that good stuff, then you can start to say, “OK – now that we have those items tagged, how can we leverage this information inside our own operations?” That was kind of long-winded again there, but that's kind of the steps you would go through there to get that first little bit done. JW, I’m sure you probably have some comments there – I think I skipped a couple of bits.
JW Franz: No you're fine. I know you were kind of teeing it up, kind of like the reading strategy and I think that’s ultimately where we’re getting to. So I come back to where I left off before which is around that whole “people, process, technology”...because to many of the points that you made, Drew, putting a tag on, again, a t-shirt like what I’m wearing and then putting hundreds of t-shirts into a box and then putting those boxes onto a pallet and thinking that I’m going to read all those t-shirts as it goes through my dock door becomes an unrealistic expectation really quick for all the challenges that we all know as to why that would be.
So when we look at, you know, where the technology fits within the process...to give the technology the best chance for success, to make you operate your business at a level where you expect it to...so we definitely want to look at, you know, how it benefits the personnel, the people working in the plant, whether it’s the manufacturing facility, the distribution center, the retail store for that matter...but also looking at just, realistically, where do I need to have that visibility through my process, and then how am I going to achieve that.
So I keep using the t-shirt example but it’s because we know that there’s going to be specific areas that we need to have visibility, and to do that, we need to make sure that we’re giving the technology the best chance and architecting the solution to the best of its ability.
And then what comes with that is the whole testing and validation. So it’s not just the physical installation of the hardware and it’s not just ensuring that whether you’re using fixed readers at dock doors or fixed readers at pallet wrapping stations or handhelds at a QA station or a combination of all of the above, that once you’ve effectively ensured that you can read these tags and collect that data...back to your point, Drew, it's how do you adjust that data, how do you make it meaningful to you because inevitably you’re going to get a whole lot more data than you ever really had at your disposal before and how do you consume and adjust that and actually make that something that can benefit you versus something that actually becomes more of a distraction because you don’t know how adjust that data. So it’s definitely...there’s a combination of factors but I think, like you said, everything from the finding a very clear scope – short term, long term, that way you’re not just trying to “boil the ocean” as they say. Get that near-term win, that success story, before you start to take on those added complexities that inherently will benefit your operation. But you have a very concise starting point that you can define an ROI around before you just start going at it holistically.
Ashley Burkle: Yeah, I mean it makes sense to take that process in those steps. So Drew, step five, we talked about identify your earliest tagging opportunity. So do you have any guidance on what is the optimal point of entry for an RFID tagging program?
Drew Gassiot: That's a really good question. So we will take JW’s t-shirt analogy, right? So the unique thing about the t-shirt is not only can you count all of the t-shirts, every t-shirt has its own serial number. So not only can you count it, you can uniquely identify each individual t-shirt that’s out there. So general rule of thumb, the earlier in your process you can apply the tag and apply that uniqueness, that digital twin to where you understand what that product is, the better. So there will be some point somewhere in the manufacturing process where you should be able to place that tag on there. And it might be today, if there is a hang tag that is applied, then that's pretty easy. You just put the RFID tag in that. But regardless, and in each of those instances, there will be some place early on in the manufacturing that you can identify a place where you can apply a tag and you have uniqueness to that individual product and that gives you total visibility throughout your production cycle.
And oh by the way, it complies with what Walmart's asking you to do, so you're able to leverage that stuff. And kind of that people always want to, in the days of when we did a lot of barcoding systems, everybody would say, I have a shipping problem, my shipping isn't accurate. Right? We would look at it and go, no, you don't have a shipping problem. Shipping is where the problem becomes visible. You might have a receiving problem, you might have a manufacturing problem, you might have losing stuff in the warehouse problem, we don't know. Right? So the earlier you can identify things, the better – it starts giving you that little bit of information. And then we recommend kind of a crawl-walk-run type of approach. You want to pick that – earlier I mentioned – that minimum viable use case to where you identify what data points you're attempting to capture in your process. And as soon as you have that, you'll get all of this increase of information and then you'll probably have a better understanding of what other points in either my supply chain or in my manufacturing process. And if it's not, it's a more complex manufacturing process, you know, what place in my working process do I want to capture those data points? And then so hopefully that's answering your question. I got a little off, but it's kind of like you want to tag as early as you can and then collect that data where it makes sense.
Ashley Burkle: That makes perfect sense, Drew, thank you. We've gone through a lot of the steps and the best approach, and I heard many times over choosing a partner and making sure you're choosing the right partner. So how does a supplier go about, or a retailer go about, finding the right RFID partner or provider to help them through this process successfully?
JW Franz: I think there's a couple factors. One, when you are, in this case a supplier to Walmart, and as I think we've mentioned it or at least referenced it now once or twice, the nice thing is they've defined a very clear cut path forward to success. This isn't the first time they've done it, they've gone through multiple waves, multiple iterations. Obviously it's grown and has rinsed and repeated itself as the categories have kind of expanded. But within that playbook as they call it, they're giving you very specific instructions: You must do this, do that, do that, do that. And if you follow that playbook step by step, it's really going to help navigate through that process. And the reason I bring up the playbook specifically is in those playbooks, they certainly then reference some others in this space that like us here talking today that can help facilitate this endeavor that these suppliers are going on.
So I would say the playbooks are a great starting point, but also if you look at the thought leaders in the space, those are doing things like we are now continuing to be out there to advocate for the technology, promote its use cases, its benefits, all the cost savings that it provides. Not necessarily try to sell you that widget or sell you that whatever, but obviously just look at those thought leaders and how they're really trying to advocate the adoption for the technology. Because inevitably, like I said, it's going to benefit everybody one way or the other because one of the things I didn't get a chance to mention is there is inherent values for everybody in the supply chain. So yeah, the closer you tag a source, the better, but everybody's going to benefit from it at some point throughout that process. So just embrace it, don't resist it, and utilize the resources and the partners like Impinj and Barcoding, others that are out there to help walk you through this process.
Drew Gassiot: Just to add just a little bit more color to that, if you think about it. So one, we work with partners like Barcoding. So we have experts inside the industry, and I would say from an Impinj perspective, we were pioneers. The Gen2 standards, this whole organization that we've been talking about...RAIN...Impinj was one of the original founding members of that organization. So we take the approach of a consultative approach where we want to make sure that what you're trying to do is realistic, that it's going to be scalable, that you're getting the information out of the system that you need and that it's something that you will adopt. I would say I spend a good deal of my time working with business partners and customers and basically explaining to them like, okay, it's an aspirational goal, but here are the challenges.
So you have to say, here are the right set for your expectations of what you can do. There is no magic box. There are best practices. As pioneers in the industry, we have the ability to take a look at what they're trying to do, see their vision and relate that to not only what's in the technology capable of today, but we can typically take a look couple of years down the road and see where the technology is going and advise them on what they'll be able to accomplish in the future. And then we help the partner sift through our ecosystem to make the right recommendation for the partner that will closely align with their culture, their infrastructure, their back-end systems and things like that. So we can hopefully identify the right partner that will be able to be the most beneficial and give them the quickest path to success.
JW Franz: And Ashley, one of the things that Drew said, I just want to add one brief comment to is obviously working with the experts in this space lines you up for the best opportunity for success. But also come with the realization that nothing in this world is 100%. There are going to be various factors why at certain times things happen, right? And maybe at some point in my process, I didn't get 99.999% read accuracy; I got 98% accuracy for some reason. Just be realistic that there will be an anomalies, reasons that those things occur, and obviously we'll take that in the best consideration we can.
Drew Gassiot: No, that's a good point. Even if you look at barcoding systems, there are recirculation, they have resort tracks for a reason. So things that don't get sorted, they go through a resort. So some people will say barcoding is a hundred percent; It's not. Every system has issues, but the best practices help you navigate those and set the right level of performance in what you can get out of the system.
Ashley Burkle: Yeah, so thank you. And I think you guys laid out steps to effectively meet the Walmart RFID compliance, but what I kept hearing again and again was about how to take advantage of this data, take advantage of this information for yourself as a company and not just focused long-term on how to comply. Obviously that's probably a short-term requirement initiative, but really adopting for long-term business values. So while the initial driver for RFID will be that compliance for many vendors or retailers, but the long-term benefits come from integrating that RFID more deeply across your operations. So for Drew and JW, for those companies who are already using RFID, they're in that process, how do they get more value out of the RFID programs and capitalize on the capabilities coming from RFID beyond just meeting some mandate requirements?
JW Franz: Yeah, I can throw out one or two examples, Ashley, and certainly you can keep me honest on time since I know we're getting closer to our time. But if I look at some of the customers that we're working with or have today, one of the things we have not talked about a lot thus far is how RFID can offset some of our current labor challenges. I know we talked a lot about RFID from inventory accuracy, inventory visibility perspective. One of our customers that we're working with, they actually manufacture their own shoes overseas. They have a distribution center here, centers here in the U.S., and they distribute to retailers. In this case they're not Walmart, but still it's the point I'm trying to make is they actually, they had eight people that were assigned to unload a single truck on a given day. There was one guy that was pulling the boxes out of the trailer and then those boxes were getting put onto a conveyor, which was basically going onto a racetrack.
And all those people there were just cutting opening up boxes looking at what was in there and doing basically QA checks. And then ultimately, once it made it around the track, it would get pulled off the conveyor and get put onto a pallet wrapper and then other people do other things thereafter. My point was that there was literally four or five people there specifically just looking at what was in the box. So using RFID in conjunction with other automation technologies like barcode scanning, we're able to basically identify the contents of the box and do that validation to make sure what was received was in fact what they expected to be while then taking those people that were assigned to do that very mundane, monotonous job and go let them do something else that was beneficial to the business. So in that case, RFID streamlined operations, it increased their inventory accuracy, but it was a huge labor savings. It took those four or five people and let them go do something else that was better suited for the day-to-day. So I can give other examples, but I know in the sake of time, I'll just pause there and Drew might have some additional comments as well.
Drew Gassiot: I think you caught it, you said the ability to serialize everything. We talked about this earlier. So in the t-shirt – I guess in the shoe example as well – the ability to have a unique identifier not only allows you, you can identify that item as that item. So if there's a quality assurance issue that pops up later on, you know exactly where that one was manufactured...if you're capturing that data. But in some instances you just want to count. So you have all these unique identifiers and you can strip off the unique identifiers and you can take the SKU and the count and inventory's done, right? So you're inventorying a hundred or so times faster than you would with a traditional barcode. And then where it makes sense, you have that unique identifier that gives you this robust capability to where you can identify it uniquely. And in some cases you can authenticate it so you can identify conuterfeit goods that are out there for high-end items.
There's a ton of use cases that just come into play there. And I guess last but not least that in that case we can take the cases of shoes or you can actually build a pallet. And if you're building the pallet, you can have a shipment verification. So you have shoes that go in cases, cases that go in pallets, and you have an RFID tag on your pallet and you built up a license plate and your process says you are confident that everything that is inside individual cases, you know exactly what's inside the case and you know exactly which cases are on the pallet. And then when it goes into a dock, you can scan that and you'll have advanced shipping notices that can go out to the next phase of your distribution or to the end-user retailer. And you have all that information that's completely automated. So there's just a huge labor savings that comes into play. And JW, I hadn't thought about it, but you're dead on with the challenges in the labor market right now. RFID provides a pretty significant relief valve that's out there for a lot of those job functions that might be a little bit more mundane to get done.
Ashley Burkle: So as we continue to talk about RFID, adoption is accelerating across retail, obviously there'll be future innovations, more use cases for the technology beyond inventory management. And you guys have touched a little bit on those, but any additional ideas on what you think future innovations or future use cases might be?
Drew Gassiot: So there's a couple of things that are coming out. So one, it used to be about reading tags quickly. That was the original goal. We want to read tags, we want to read tags quick, and we want to be able to singulate tags. That was the entire goal. And that's happened. And now we have what we'll call a massive tag population. So instead of hundreds of tags, now we're dealing with thousands and thousands of tags that are in the area. So there are some emerging features and capabilities that we're in the process of implementing, and there's also some revisions that are taking place to be able to better manage very, very large populations of tags inside a single antenna. So that's one thing that's coming out there. There are some implied additional capabilities that you can do by being able to manage those tags.
So if you have this really large population of tags and then you have the ability to manipulate those tags kind of at the bit level, there's some really cool things that you can do out there that allow you to work with those individual tags. I touched on it a second ago. I mentioned authentication. So you have the ability – and this is kind of a European thing – so there's this thing where a lot of the RFID tags for sustainability efforts are being embedded into clothing items. So instead of having the hang tag, you might have a tag that's in your care tag that's in the back of your shirt or something like that, and you had this thing to where you have now somebody could read your shirt, right? Well, we've addressed that. So there is the ability to where you can essentially privacy-lock tags. So the tag will no longer be readable.
But the cool thing about that is at some point, if that tag is recycled or that shirt is recycled, they have the ability to open up that tag. They don't know who owned the shirt, they don't have any information about the shirt, but they know what the shirt was made from. So if you have a sustainability effort or if you're using for that, you can back into your system to understand how to more effectively and accurately recycle items and reduce contamination that's out there. So there's just some really cool stuff that's coming out.
Ashley Burkle: Yeah, that's very cool.
Drew Gassiot: You were going to run, sorry.
JW Franz: No, it was actually great that you started first because I'm just going to round out what you said Drew, especially within the sake of time. But I'm going to say that a lot of the things that we're talking about as it relates to supply chain visibility is largely going to be enhanced through the continued adoption of standards as well. So I know we've talked about utilizing, we touched on it, we didn't really dive deep into it, but utilizing GS1 standards throughout supply chain, whether it's in retail or in food. The reason I bring up food because I know Drew brought up earlier was about some other potential expansions, and that's how other standards from the RAIN Alliance and GS1 around tag data standards, tagging coding data standards, which translates to what Drew was talking about. And then also just with the continued adoption, how this is going to tie into other adjacent use cases that tie into chargebacks associated with claims disputes when missed shipments occur. So I think just the continued adoption of the technology with utilization of standards is going to continue to provide this level of visibility and enhance operations like we've been talking about. So that was just my wrap to what Drew had started off with.
Drew Gassiot: You know, Ashley, we didn't even get to, it's kind of funny, we talked about all these cool capabilities and we actually didn't even talk about shrink, electronic article surveillance, and things like that. So exit detection. So the other thing that's actually happening, I'll touch on this and I know we're running short on time. In Europe, a popular approach out there now is to use RAIN RFID instead of those detached tags that are still popular, they're using RAIN RFID. And so you had just have that one tag so your customer checkout becomes more convenient, electronic article surveillance is more accurate because you don't just know that something left...a tag left...you know exactly what that product is, down to the serial number – that unique item. If I walk out without paying for this shirt, they would know it was this shirt, not one that looked just like it that I left the store with.
Ashley Burkle: Yeah, so I feel like we could do a whole webinar on these additional use cases and unlocking some of this great value past just compliance. That's such a starting point for what can be amazing programs within RFID for retailers and suppliers. But I think that brings us to the end of our webinar today. Time went very fast. I want to thank our panelists, Drew and JW for taking time to share their valuable expertise on the Walmart RFID mandate and RAIN RFID technology. Like I said, I think we covered so many important topics today from program compliance to driving business value with RFID. And for those of you who are embarking on your RFID journey, just remember to leverage the resources and partnership opportunities from experienced providers like Impinj and Barcoding. And we thank you so much for your questions. I've seen them come in, we don't have time to answer them today, but one of our panelists will follow up with you to answer your question. So I think that's a good note to end on.
Thank you again to our panelists, Drew and JW, and definitely a big thank you to our audience for joining today. And if you want to review anything we've talked about today, this webinar along with the full report will be emailed to you later this week.
So thanks for watching. Goodbye.
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Thursday, June 6, 2024
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