01/05/2005

The ARC Advisory Group conducted a best practices study in which ARC interviewed 24 companies that were actively investing in EPC RFID (Electronic Product Code Radio Frequency Identification). RFID tags can be applied at the packaging line or the distribution center.

According to Steve Banker, service director for supply chain management at ARC Advisory Group, “In our sample, 85 percent of the facilities where tags were applied were DCs."

“Slap and ship” is the term that has been used for the process of applying RFID tags in the DC. “Slap and ship” reflects the idea that applying tags in the distribution center will be a more manual, labor intensive process than applying tags at the factory.

"However, even when tags are applied at the DC, the term ‘slap and ship’ does not fairly reflect what is going on at many DCs. There is both more automation, and more process variation, than has been generally recognized.”

ARC reported that Wal-Mart has mandated that by January 2005 its top 100 suppliers must apply passive RFID tags based on EPC-global standards to cases and pallets headed toward three specific Distribution Centers (DCs) in Texas. They argue that virtually all manufacturers of consumer goods will eventually be impacted by this because Wal-Mart’s moves in RFID are being copied by other retailers. More information about the study can be found at www.ARCweb.com.