Wal-Mart's RFID plans hit trouble

US retail giant Wal-Mart's controversial RFID tracking tag rollout across its supply chain has been hit by delays and logistical problems, and the company's UK subsidiary Asda has confirmed it now has no plans to take the technology forward either.

The news is a setback for the RFID industry, which is pushing the technology as a barcode replacement to help track goods from the warehouse to the checkout, but is also predictable, according to one UK observer.

Wal-Mart's diktat last summer to its top 100 suppliers to put RFID tags on their shipments by the end of this month had little chance of success, according to Meta enterprise programme director Enrico Camerinelli.

The company has made no formal announcement but it would appear to agree. The retailer is concentrating on its drug suppliers with a deadline shifted to June or later. No announcements have been made on the rest of its retail suppliers, although trials are due to begin this summer.

"Wal-Mart saw the benefits, but gave its suppliers no guidance and no support. And those with some muscle, some negotiating power, did not want to be guinea pigs for the whole RFID enterprise," said Camerinelli.

He also claimed that Wal-Mart had not properly appreciated the effect on its own distributions system. For instance, it did not seem to realise that it would have to have two lines of readers; one for bar codes and one for RFID – and that this would cut the benefits of installing RFID.

Camerinelli said: "On RFID there is curiosity and there is appreciation of the benefits – but there is very little money spent. To do it, you have to do what Tesco is doing here and Metro in Germany – work through it and give your suppliers support and guidance. And you have to appreciate the real impact of RFID is on business process and logistics."

Asda last year volunteered for a government test of the technology run under the eCentre banner. A spokesman said: "We tried it on CDs in a few stores to track them from our suppliers to the stores. It was good but we have absolutely no plans to take it forward."

One of the problems that Asda found was that if CDs were stacked spine upward the correct number of 20 would be registered – but if stacked flat as they are in stores, the 20 would register as only one copy.