Target Corp. and 100 of its consumer-goods suppliers last week began using radio-frequency identification in shipping and receiving, according to people involved or familiar with the project.
Suppliers are now shipping cases and pallets of goods affixed with RFID tags through Target's Tyler, Texas, distribution center to 10 regional stores, participants and observers say. Target, which has had a long-standing policy to not publicly disclose business strategies, didn't respond to requests for comment.
The rollout follows a trial deployment earlier this year that included 19 suppliers, including Hewlett-Packard, Kimberly-Clark, and Procter & Gamble.
Similar to Wal-Mart Stores Inc., Target installed readers and antennas at storage-room doors that lead into stores, at shipping and receiving dock doors, and near trash compactors. Readers and antennas from ADT Security Systems Inc. were installed at the first five stores, and equipment from Symbol Technologies Inc. at the remainder, participants say.
To get the effort going, Target assembled a board of experts. Physicists from RFID service and consulting companies such as Extra Prize, Oden, and R4, which VeriSign recently acquired, were brought in to assess and address frequency interference from other technologies deployed within stores and the distribution center, observers say. "If Target starts with a core group of RFID experts, and consistent methodology with a plan and a blueprint, they should be able to install the required RFID infrastructure to 40 stores weekly," says Peter Regen, VP of global visible commerce solutions at Unisys Corp., who is familiar with the project but not directly involved. "Target has about 1,500 to 1,600 stores, and they could finish the rollout in about a year."
Target is taking its time with the project, however. Another 100 suppliers are expected to participate, yet Target hasn't yet provided them with procedures for tagging cases and pallets. Observers say the retailer wants to be able to provide quality data collected from the initial deployment to other consumer-goods companies before expanding the program.