Advantages And Disadvantages Of Walmart

A) RFID refers to radio-frequency identification and it belongs to Automatic Identification and Data Capture (AIDC) group of technology. This technology is able to scan objects automatically, collect data about the objects and store those data straightforward into the computer systems, this is done with almost no help from human. As seen in the picture below, there are 3 components in this system which help it to achieve all this work, these are RFID tag or label, RFID reader and an antenna. Inside every RFID tag or label, it contains a micro-chip known as integrated circuit and an antenna to transmit these data to RFID reader. The RFID reader's antenna is then start to give out electromagnetic wave in order to receive tag antenna. Once it

Wal-Mart implemented the system in January 2005 with the main aim to reduce out-of-stock by providing visibility into the goods storage with RFID tags. Before RFID was adopted for better managing distribution, Wal-Mart's employees have to manually count goods from their back room, manage goods arrival from suppliers and takes a longer a time to notice out-of-stock goods needed to be replenish, although it is simple to do but very time consuming for them. After implementing RFID, Wal-Mart became the largest retailer in the today world. They have 3 or more fixed RFID reader installed at the back of each store, as well as the sales floor and the back room because of large volume of goods that requires tracking. RFID reader keeps a record of all these goods, time upon arrival from shipping, real-time notification for out-of-stock goods on shelves and point of sale, this also reduce inventory shrinkage, due to the fact that Wal-Mart is a large firm, such occurrence cannot be avoided and harder to manage . With quick replenish of goods on the shelves, more sales will also be made. Employees now have more time to focus on other task, let RFID system do the job of tracking goods. It is estimated that Wal-Mart would saves up to at least 8 billion of US dollars due to labour cost. Thus, these factors indirectly increases Wal-Mart's profit margin enormously. In the end, Wal-Mart not only able to make more profit for themselves with this technology but also solve inventory problem they are faced. (Cost reduction in retailing & products using RFID,