Domino Features Tiered Solution for RF Compliance

Sam’s Club pulls back on tagging schedule.

Domino Integrated Solutions Group (ISG; Dallas) offers three tiers of solutions for meeting RFID tagging requirements from retailers. The solution suite addresses the various requirements for container tagging set out by Walmart Stores and Sam’s Clubs.

After laying out an aggressive schedule for EPC labeling last year, Sam’s Club in January scaled the requirements back, citing supplier concerns over the cost of the RF tagging. The wholesale club reduced $2 and $3 fees imposed for untagged pallets to 12 cents.

Suppliers have been tagging pallets and cases for several years for supplying Walmart stores. So those that supply to both chains have had a head start for meeting Sam’s Club mandates. At Walmart, the focus has shifted from the DCs to the stores. At the store level, tagging supports tracking promotional displays and high-value items and departments.

Sam’s Club is emphasizing pallet tracking, and is committed to 100% tagging at the packaging sellable level.

“Sam’s Clubs stack in pallet, and sell in bulk, so they are focusing on the pallet tracking and point-of-sale. They want to move to [hands-free] self-checkout. The sellable units [at the wholesale clubs] are higher-dollar, higher-margin sales, so the tagging is more affordable,” says Dwain Farley, CEO, Domino ISG.

Sam’s Club last year had called for sellable-unit tagging by October 2010. Case tagging was to be in place by October this year. Pallets shipped to all of its 22 DCs had required tags as of January 2009.

For pallet tagging, Sam’s Club has now advised that it will “prepare for a chainwide rollout of pallet-level labeling by 2010.” It said that the schedule for item-level tagging is under review. Case labeling is now optional.

“Case-level tagging doesn’t make that much sense [at Sam’s Clubs], because in most cases the in-store product is at the pallet level,” Farley says.

In a letter to suppliers, Sam’s Club CEO Doug McMillon wrote that  “Sam’s Club remains committed to the vision of 100% EPC labeling on selling units.

“While there are benefits to case labeling in the Sam’s Club environment, and some suppliers that are labeling cases today have found value based on supply-chain visibility, the benefit to our members is less significant when compared with the benefit of selling-unit labeling.”

“[Since the tagging mandate was announced in January 2008], several of you have contacted us with questions, concerns, and suggestions, particularly in light of the current economic environment. We learned we need to clearly help you understand the benefits of selling-unit labeling before we lock into a firm deadline,” McMillon wrote.

“Sam’s Club suppliers pushed back. We are seeing the same thing [in the RF solutions business], due to the economic climate,” Farley says.

Farley says two local Dallas-based firms recently had second thoughts about investing in a coding solution. “They went back to Sam’s Club and said, ‘Overall, our business is down. We don’t have the margin in the products to invest in the technology and apply the tags.’ ”

Farley notes that in the past year, many Sam’s Club suppliers found it easier to pay the pallet fees rather than put in their own systems.

Sam’s Club is expanding testing of shelf tagging for pallet tracking in the clubs. RF interrogators mounted on forklifts track the placement of tagged pallets by associating each pallet tag’s EPC with the nearest tag location. Stores are RF-enabled at receiving doors and sales floor transition areas, where floor-installed tags assist the tracking.

Suppliers can achieve visibility on product movement through the warehouses and in the stores at Sam’s Club and Walmart using Walmart’s Retail Link Web site.

“[Walmart stores found that] 30–40% of displays didn’t go off as they were supposed to. Suppliers could see a great benefit in making sure displays are in the right store at the right time so they get the sales uplift,” Farley notes.

Domino ISG provides a basic slap-and-ship level of RF support for pallet tagging with Compliance First. The solution includes epcSolutions’ RFID TAGManager, and Zebra Technologies’ RFID printers. With a PC option, software comes pre-installed and configured.

Compliance Next Steps provides a scalable system for case and pallet tagging. Case tagging is automated on a conveyor, with containers tracked through to palletization. Data are aggregated for integration with back-end systems.

In its patent-pending Hide-Pack solution, converters of corrugate or other packaging mediums put the RF inlay into the seam of the box. With the tag an integral part of the package, suppliers sourcing higher volumes of packaging from converters can realize economies.

Cushioned and protected from extreme environments by the package walls, the inlay is shipped ready for EPC coding. Domino has been trialing the solution in corrugated packs in a number of pilots. The firm is looking to announce a Hide-Pack solution for folding cartons this year, Farley says.

“Hide-Pack makes sense as a low-cost approach for high volume where you just don’t have enough hands for slap-and-ship,” he adds. ■

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