Apr 28, 2004 (02:04 PM EDT)
HP To Ship First RFID-Ready Goods

Read the Original Article at InformationWeek

Hewlett-Packard will ship cases and pallets of ink-jet printers and scanners with radio-frequency identification tags attached to them to Wal-Mart Stores Inc. beginning Friday.

Lucien Repellin, HP's manufacturing-industries RFID-services lead, says HP initially will ship the RFID-tagged cases and pallets to Wal-Mart's Texas distribution center, the mega-retailer's first RFID-ready center. By year's end, HP expects to stick tags on 80% to 85% of the cases and pallets of its products bound for retailers. The printers being shipped to Wal-Mart include two models of the HP Photosmart and one model of the HP Scanjet Scanner.

Wal-Mart has asked its top suppliers to have tags on cases and pallets by Jan. 1 so it can more efficiently track goods coming into its distribution centers and stores. RFID tags can transmit a code--called an electronic product code, or EPC--that contains information about the product, providing a more-automated means of capturing supply-chain data. Retailers Albertsons and Target and the Department of Defense also have asked suppliers to adopt RFID for goods shipped to them.

HP isn't a newcomer to RFID, having pilot-tested the technology for roughly two years. Based on that experience, Repellin offers some lessons for others adopting the technology.

Data management is a challenge. HP uses RFID in its facilities in Memphis, Tenn., Chester, Va., and Soa Paula, Brazil, which together generate 1 to 5 terabytes of data every day. Repellin says HP doesn't plan to archive all that data, but instead will collect and react only to the exceptions--data that suggests there's an error in what's being shipped. But Repellin says a slap-and-ship approach (just putting tags on to satisfy a retailer) is a pure expense. Companies should capture and use the data themselves. In all, HP is integrating RFID in 31 facilities worldwide.

Tag prices vary. HP and other companies have seen prices range from 15 to 50 cents, depending on the radio frequency used and the volume purchased.

Accurate reading is difficult. HP has had to change how it puts pallets together to get faster and more-accurate read rates. Though it's not yet shipping item-level tags, HP has experimented with them. Readings on ink-jet cartridges were often inaccurate because a cartridge's liquid metal interfered. It solved that by putting an insulating material between the cartridge and the tag.

Yet RFID can deliver accurate results. Repellin says HP is getting 100% accurate read rates on case and pallet shipments, while its bar-code system delivers 92% to 97% accuracy.