Although Radio Frequency Identification (RFID) implementation faces a host of challenges, Wal-Mart perseveres in its drive for RFID adoption throughout its supply chain. By being such early adopters of RFID, Wal-Mart’s suppliers suffer increased costs which put pressure to bear on their profitability. In the face of the additional costs of RFID, why has Wal-Mart chosen to mandate the use of RFID tagging in its supply chain and insisted on such a short implementation period? This paper reviews Wal-Mart’s relationship with its supply chain, describes Wal-Mart’s RFID initiative, and proposes a possible unexpressed motivation underlying Wal-Mart’s drive to go to RFID. Early results are indicating incremental improvements at Wal-Mart due to RFID implementation; however, the argument can be made that Wal-Mart’s ultimate goal is an innovative improvement on a Schumpeterian scale – the desire to radically improve an important supply chain metric, the cash-to-cash cycle. This reasoning supports fertile areas for future research in the relationship between RFID and the Cash-to-Cash Cycle.
Vowels, Susan A., "A Strategic Case for RFID: An Examination of Wal-Mart and its Supply-Chain" (2006). SAIS 2006 Proceedings. 25.