Wal-Mart will use a phased approach to its ambitious radio-frequency identification technology rollout, requiring pallet and case-level tracking for three distribution centers and 150 stores in the Texas region beginning in January 2005, according to a vendor briefed by the company.

Additional regional rollouts of the program will continue on a quarterly basis throughout 2005, says Greg Gilbert, who directs RFID product management for Manhattan Associates Inc., an RFID software supplier.

"I think that was their plan all along," Gilbert says. "If you look at the way Wal-Mart has rolled out any supply chain or compliance initiative in the past, it has always been a very pragmatic, tactical, phased approach as opposed to trying to do it all in a big bang."

Wal-Mart officials met with about 128 companies that supply goods to its stores on Tuesday to provide further details of its RFID plan, which calls for its top 100 suppliers to provide RFID tracking capabilities on a pallet and case level by January 2005.

Wal-Mart also met with RFID hardware, software, and integration companies Tuesday night to detail its plans.

The company also revealed that two unnamed top 100 suppliers are already live with RFID-compliance programs.