By Maxine Shapiro, KERA 90.1 Business Commentator
Dallas, TX – There's a German proverb that says, "To change and to improve are two different things." I would add that's subjective based on our biases. Just ask the suppliers of Wal-Mart. I'm Maxine Shapiro with KERA Marketplace Midday.
The 800-pound gorilla of retail meets this week with its top 100 merchandise suppliers. The topic: how to implement the new high-tech inventory-tracking system, RFID, mandated by Wal-Mart to be applied by January '05. Get very familiar with that acronym RFID (radio frequency identification), for as Wal-Mart goes, so goes the rest of retail - like it or not.
RFID, in theory, is similar to bar code identification. Without getting too technical, it's this tiny little chip and antenna that transmits signals, which is then picked up by a transreceiver, which reads the radio frequency and transfers the information to a processing device. RFID can commonly be used from missiles to clothing and pet tags - a kind of all-purpose LoJack.
For Wal-Mart, it's a way to compute precise information about the contents of product packages and containers - an inventory gene. According to an investment research firm, the retail giant would save $8.4 million annually, much of that coming from manual labor - the nerve of some humans to err when tracking inventory via bar codes! Elsewhere I heard $2 million of that would be saved from shoplifting.
But the suppliers aren't quite as elated about Wal-Mart's chip mandate. AMR Research says complying with the retailer's RFID plan will cost the typical supplier $20 million a year. And it's estimated consumer-goods manufacturers could spend a combined $2 billion to implement the chip system. Proctor and Gamble is the only company outwardly supporting the move.
Privacy advocates fear this device will track far beyond the confines of the store, and some favored Wal-Mart employees should start thinking of a new career. So, different or improved? It's all who you ask.
For KERA Marketplace Midday, I'm Maxine Shapiro.
Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 p.m.
Email Maxine Shapiro about this piece.