To RFID Or Not; PRWs Are Undecided

The PRW industry proves to be a mixed bag when it comes to RFID adoption.


When Wal-Mart Stores, Bentonville, AR, announced in June 2004 that is was going to require its top suppliers to use RFID technology, the retail and food industries were abuzz. After all, where Wal-Mart goes, so goes everyone else.

But just how much adoption has RFID technology had in the food industry to date? That's a subject that is open to debate and much depends on whom you ask. Some third-party logistics providers (3PLs) and public refrigerated warehouses (PRWs) are embracing the technology by establishing test labs. Others are taking a wait-and-see attitude. And still others are actively using the technology with key customers and suppliers and beginning to take stock in the results.

Benjamin Milk from the International Association of Refrigerated Warehouses (IARW), Alexandria, VA, says that member companies are following the technology closely. "We have called on a number of RFID specialists and experts to talk with members about RFID issues on a number of occasions over the past three years," he says. "In fact, at the World Food Logistics Organization Institute, the annual industry training program, we are presenting an IT module with significant discussion about RFID."

Still, Milk says, many member companies have yet to hear from customers that RFID is a technology they want at this time.

"Most customers aren't asking for it yet," he explains. "Right now, RFID seems to be driven by a few large companies, and those that are using it are doing so on a limited basis. Suppliers to these companies may do it for one or two accounts, but that's about all we're seeing right now."

That speaks volumes about where RFID adoption stands right now in the PRW industry, because it is a customer-driven industry. "PRWs invariably respond to customer requests and are pro-active in anticipating what that might be," Milk says. "There just hasn't been significant customer demand yet. It's almost a technology looking for an application."

This certainly applies to Milwaukee-based Total Logistics Control Inc. (recently acquired by Supervalu), where Carl Melville says the company has yet to delve into RFID. "We haven't had any customers asking for the technology yet," he says. "We are customer driven, so we are taking a 'wait-and-see' attitude."

Who's Doing What

In spite of the fact that RFID hasn't received widespread adoption in the PRW industry yet, there are companies that have put it into place with good results. United States Cold Storage (USCS), Cherry Hill, NJ, has been accumulating RFID information and technology for the past two or three years, according to Jerome Scherer, vice president of sales and marketing. In fact, about a year ago, the company established an RFID Solution Center in Dallas to help its supplier customers meet their supply chain mandates.

The USCS center, which it established in conjunction with Teaneck, NJ-based Cognizant Technology Solutions, serves as a fully functioning, end-to-end RFID distribution center. The technology in place incorporates printers, label applicators, conveyors, readers, testing devices, links to warehouse management systems and a variety of middleware linked to support live customers and test scenarios in RFID technology.

USCS is actively marketing its RFID center to customers and has been providing complete RFID services to one major customer for about six months. "We are selecting multiple SKU orders from inventory that require RFID tags," says Scherer. "We are writing the tags, applying the tags, testing the tags and shipping the orders with ASN confirmations via EDI to the shipper and to the consignee."

So far, the results have been promising, says Scherer. "Our accuracy and performance is approaching 100 percent for reading labels on outbound orders," he comments.

C.H. Robinson Worldwide, Eden Prairie, MN, is another 3PL company that is testing and using RFID with its customers. "We began by assembling an internal team focused on RFID in 2004," says Mike Ralston, general manager. "We partnered with one of our produce suppliers and put a test facility together in the produce receiving area."

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