September 21, 2005
RFID and Wal-Mart
Opinions appear to be divided on whether the implementation of RFID by Wal-Mart is to facilitate improvements in supply chain or is a strategic move. Analysts who feel that it will at best lead to improvements in the supply chain point out that for RFID to be of strategic importance, it should provide a sustainable competitive advantage, which it may not.
Given the fact that the technology is being standardized, it will not be long before the competition too adopts RFID. By being in the forefront of RFID implementation, Wal-Mart can hope to discover and implement uses of RFID that are currently not possible. Innovative use is not very easy while applying a mature technology. Wal-Mart is a major buyer and already has an efficient supply chain in place.
Since, Wal-Mart operates a business that is based on providing goods at low costs, it has to be alert to the possible uses of technology, existing and new, that will help it to drive down costs even more. Wal-Mart’s speedy adoption of RFID is an indicator of the fact that the company recognizes RFID as a competitive enabler that will allow it, if it wishes, to use the savings accrued to further cut sales prices and increase its dominance in a market driven by low prices.
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