The 80/20 rule

With more than 300 suppliers tagging pallets and cartons for Wal-Mart, a warehouse management system (WMS) supplier says most are meeting the mandate and a few are looking for value.

By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 1/26/2007

When it comes to RFID in the supply chain, Michael Wohlwend was there at the beginning. “I remember going to Bentonville to work with some of the initial suppliers to Wal-Mart,” says Wohlwend, director of RFID sales for Manhattan Associates.

Given Manhattan’s focus on warehouse management systems (WMS) for the retail supply chain, Wohlwend has worked with a significant number of the suppliers now tagging cartons for pallets. He says he and his team are now fielding calls from Department of Defense suppliers charged with meeting the mandate.

“They’re in shock and awe,” he says.

When it comes to retail suppliers, Wohlwend says the 80/20 rule applies.

“Eighty percent of the suppliers are still focused on complying with the mandate,” says Wohlwend. “They may ship a limited number of SKUs and the data coming back is not what they expected.”

The 80% is waiting to see what happens, especially with EPC IS, the new RFID infrastructure coming this year from EPCglobal, before they invest any more money.

Then, there’s the 20% that are taking the data they’re getting back from Wal-Mart and looking for ways to get value from it.

Some of those suppliers are focused on learning more about how their product, and promotions, flow through their customers’ stores. Still others are looking at that information to take days out of their supply chain.

“We’re talking to one customer that needs 23 days to get product through their supply chain, but it only takes five days in their retail customers’ supply chains,” says Wohlwend. “They’re looking at how to shorten that 28 days.”