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Wal-Mart’s RFID Initiative

AMR Research analysts Kara Romanow and Scott Lundstrom have published brief note which estimates that Wal-Mart’s requirement on its top 100 suppliers to implement RFID tagging on pallets, cases and cartons will cost the consumer goods manufacturers about $2 billion to implement.

Take, for example, a typical CPG manufacturer that ships 50 million cases per year. The conservative cost estimates for RFID implementation total $13M to $23M and break down as follows:

  • $5M to $10M for tags and readers
  • $3M to $5M for system integration
  • $3M to $5M for changes to existing supply chain applications
  • $2M to $3M for storage and analytics of the large volumes of data
    The actual costs could be much higher if physical infrastructure changes need to be made.

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