The Sam’s Club division of Wal-Mart has announced a dramatic decrease in the penalty fee it will charge suppliers who do not use RFID-enabled pallets to ship their goods. The change comes after major changes a year ago in Wal-Mart’s own RFID requirements.
The Sam’s Club plan originally required suppliers to be tagging the pallets of all solid SKU pallets sent to Sam’s 22 distribution centers by the end of January 2009. Suppliers failing to meet this requirement would be charged as much as $3 per untagged pallet. Now, with that deadline for compliance looming, Sam’s has reduced the per-pallet penalty to 12 cents, which is the cost for Sam’s to apply the tag upon arrival at the distribution center.
The change in policy appears to be due to multiple factors in the retail industry. With Wal-Mart itself easing RFID requirements, and no other major retailers introducing similar policies, few suppliers have reached the point that it is more cost-effective to invest in RFID infrastructure than to pay the Sam’s Club fees. Meanwhile, Sam’s own RFID investment has lowered costs to the point where tagging at distribution centers is a small effort, in terms of costs or labor. Apparently, this can be treated as another step in an internal labeling and tracking process already in place at the warehouses.
The policy change also comes as Sam’s Club’s own focus for RFID applications shifts from receiving from suppliers to store-related uses, including receiving, stocking, and inventory. This foreshadows another requirement Sam’s may soon put in place for suppliers: item-level tagging to aid inventory and eventually, RFID-enabled check-out.
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