Radio frequency identification (RFID) tracking for unit loads has been tossed around for several years. But it wasn’t until Wal-Mart put its weight behind the technology that RFID went from the theoretical realm to reality. Wal-Mart, the country’s largest retailer, and the U.S. Department of Defense have both announced aggressive plans to use RFID to track case level and unit load shipments. Much like the Borg in the Star Trek TV series, RFID appears to be here to stay and the pallet industry is going to have to deal with it.
The Borg is a race of half-human, half-machines with the single purpose in life to assimilate the technology and beings of other cultures. The Borg speak as ‘We’ because they are all connected to a collective which controls them in every thought and movement. Instead of peaceful relationships between other races, the Borg will often kill for the technology from other races.
When the Borg prepares to attack and take over a ship, it says, “We are the Borg. Lower your shields and surrender your ships. We will add your biological and technological distinctiveness to our own. Your culture will adapt to serve as us. Resistance is futile. We are the Borg.”
The retail supply chain appears to be dealing with a similar situation when it comes to Wal-Mart’s push for RFID. And this emerging technology will impact the pallet industry as customers rush to comply with Wal-Mart’s requirement. Other retailers may not be too far behind because the advantages may be too good to resist.
Supporters claim that RFID addresses a number of key problems including theft, counterfeiting, supply chain visibility, lost sales due to items being out of stock, order accuracy and improved efficiency. Wal-Mart has mandated that its top suppliers apply RFID tags to pallets and cartons by January 2005.
In adopting RFID technology, there appears to be some lessons that we can learn from the Internet boon of the 90s. For starters, new technologies are tools not miracles in a bottle. Some are touting RFID as an easy cure all. But RFID will not in and of itself fix problems in the global supply chain. Without proper implementation, RFID will mean very little to the bottom line. Companies must train their employees and develop a plan to effectively utilize new technologies. Packaging users must determine what they want to know from RFID technology and when they really need to know it.
To help you make sense out of the coming RFID revolution, I interviewed Mark Roberti of RFID Journal, a leading independent RFID news source (see page 20). It looks like CHEP has really seized the momentum when it comes to the RFID issue (page 31). CHEP has definitely spent some money to be on the leading edge of the technology adoption curve. But the gamble may pay off as it hopes to charge premium prices as well as attract new customers.
Contrary to popular belief, new technologies do not necessarily mean the end of old technologies. Even Wal-Mart has stated that it intends for suppliers to utilize bar codes for item tracking well into the future. New technologies tend to force old technologies to adapt and find niche markets.
One major lesson of the Internet is that change doesn’t take place over night, but once momentum gets started, a lot can change in a hurry.
What does all of this mean for typical pallet companies? That’s a pretty big question. Consider reading the coverage in this issue to get a good picture of what to expect. Don’t be surprised if your customer asks you about the issue, especially if your customer is a supplier to Wal-Mart.
The future definitely promises the upgrade of pallets from being just a dump shipping platform to smart packaging providing a key link to track shipments within the global supply chain. To quote the Borg, “Resistance is futile. You will be assimilated.”
