The Warehouse has enlisted IBM as lead partner in a venture into RFID (radio-frequency identification). A “proof of concept” exercise is to be run this year around in-store stock management.
This will seek to demonstrate that RFID can be used for in-store stock management in The Warehouse’s environment, recording what is actually on the shelves, says Warehouse CIO Owen McCall. By contrast, many retailers only record stock as it enters the delivery dock. The Warehouse plan is aimed at ensuring the stock is more reliably and immediately available to customers, McCall says.
“We believe RFID in retail is real. Standards and the cost curve are driving the reality closer to wider consumption and the leaders are learning by doing.”
“We have evaluated a number of potential uses for RFID across our organisation and have focused on in-store stock management, which is the application we believe will provide the greatest benefit to our customers at this point in time.”
McCall says the cost of the technology, particularly the RFID tags on goods, “is absolutely an issue”, but the company believes it is better to start now and accumulate experience in time for the cost-curve to move down, rather than be inexperienced when it becomes economical.
Stock is likely to be labelled by the carton during the proof of concept phase, he says.
This phase should be finished by the end of the year and if the results are positive, pilot trials will start in 2006.
The Warehouse group has had a multi-discplinary team studying the potential uses of RFID since August 2004. The group chose IBM as the lead partner for the proof of concept due to its global commitment to RFID and a strong local presence, McCall says.
Alien Technology Corporation, a leading provider of RFID solutions, headquartered in California, is providing RFID readers and tags and initial field applications engineering support. Auckland-based Saito Group will provide RFID printers and RFID labels.