Tesco puts back radio tagging after concerns over standards

By Rick Pendrous

- Last updated on GMT

Related tags Electronic product code Rfid

Tesco puts back radio tagging after concerns over standards
Lack of technical standards delays radio tagging roll-out

Tesco has delayed its use of radio frequency identification (RFID) systems -- or radio barcodes as it calls them -- because of the lack of common European standards.

It is therefore giving its case- level suppliers a breathing space in the adoption of the technology. It now expects first suppliers to install RFID systems between the third quarter 2004 and the first quarter 2005, followed by a mass roll-out. Initially it plans to use RFID for 20-30% of its products.

Without common standards for RFID tag readers and writers, tagging 100% of a product cannot be guaranteed, said Tesco's programme manager Simon Palinkas at the recent RFID Networking Forum: "Unless I get 100% I don't want to do it." He promised to give suppliers at least six months' notice before they would be expected to comply.

Tesco's next review of its plans is expected at the end of July and Palinkas advised Tesco's suppliers to take advantage of the delay to identify how to comply with the proposed electronic product code standard EPCglobal.

In particular, he suggested that they examine their packaging and product design. "By clever design you can solve many of the radio frequency issues out there; but you need to start early," he said.

Suppliers will have to try to use RFID to achieve efficiencies, as they are unlikely to get any financial help from Tesco on the cost of implementation.

In a separate project, Neal Collishaw, logistics manager for Worldwide Fruit, which supplies Marks & Spencer (M&S), said the cost of RFID worked out at about £80,000 per factory. That excluded the cost of tagging trays, for which M&S was paying.

Worldwide Fruit has installed RFID at one site and plans four more. Since it adopted RFID its service levels have improved from 99.5% to 99.98%, said Collishaw: "It is critical to get it right first time, every time and RFID has allowed us to do that."

For retailers the benefits are more obvious: as well as improving supply accuracy, RFID promises to increase product 'visibility' -- reducing losses due to problems such as theft, improving on-shelf availability and giving staff a better idea of what they hold in store.

"Tesco passionately believes in this technology and we are really committed to making it happen," said Palinkas. "We believe [RFID] will fundamentally change the business operations within the supply chain."

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