RFID NOT YET ACCURATE ENOUGH, HANNAFORD BROS. SAYS

SAN DIEGO - Hannaford Bros.' top IT executive expressed some concerns about the current state of radio frequency identification, although he was hopeful that a new test would help resolve some of the issues with the technology.Bill Homa, chief information officer at the Scarborough, Maine-based chain, told SN he was currently "less optimistic" about the value of RFID after early tests proved unsatisfactory.

SAN DIEGO - Hannaford Bros.' top IT executive expressed some concerns about the current state of radio frequency identification, although he was hopeful that a new test would help resolve some of the issues with the technology.

Bill Homa, chief information officer at the Scarborough, Maine-based chain, told SN he was currently "less optimistic" about the value of RFID after early tests proved unsatisfactory. "Retailers would not want an 85% read rate at the [point of sale], so why should we be satisfied with that for [receiving of] pallets and cases?" he said. "We need a 99.9997% read rate for receiving."

He made his remarks following a presentation by Cindy A. Boyt, Hannaford's director of distribution services, at Food Marketing Institute's Marketechnics show here last week. She outlined Hannaford's experiences with RFID, the much-heralded technology that can identify and track inventory in the supply chain, among other uses. Though modest, Hannaford's efforts represent one of the few publicly disclosed U.S. food distribution tests of RFID outside that of Wal-Mart Stores.

In a limited test with Kraft last year, Boyt said the technology produced "read rates" of more than 80% for cases that had been tagged with RFID chips. In addition, in a test in a meat warehouse at one of Hannaford's sister chains in Belgium - both are owned by Brussels, Belgium-based Delhaize Group - RFID tags embedded in pallets had "at least a 50% failure rate" because of rigorous washing of the pallets, she said.

Delhaize Belgium is now extending the test to the store level with a test lab. "They're simulating back-door delivery of meat totes," Boyt said.

Boyt was optimistic that recent advances in RFID technology would improve upon those results. She said the chain is preparing a new small-scale test of radio frequency identification at its distribution center in Winthrop, Maine, that will deploy so-called "Gen 2" - short for UHF Class 1 Generation 2 - the latest standard endorsed by EPCglobal, Brussels. EPCglobal is responsible for commercializing RFID technology that incorporates the Electronic Product Code. Gen 2 is widely regarded as more powerful and reliable than its predecessor.

"RFID is coming, whether we like it or not," Boyt said at the session, called "RFID - Lessons From the Real World." Hannaford's view is that while the technology may not yet be fully mature, "we can't wait and do nothing and have it happen to us," she said.

Following the session, Boyt told SN that Hannaford's next RFID test would be ready to go by the end of March. The new test will be conducted with Kraft, which will be delivering cases labeled with RFID tags. At the receiving docks of the Winthrop facility, stationary RFID readers automatically read those tags and report their arrival without any human intervention.

The goal of tests like these is to track movement of pallets and cases through the supply chain with greater accuracy and visibility than current processes that depend on scanner-wielding employees.

One challenge Hannaford faced with its RFID test was persuading vendors to ship tagged cases to Maine, far from the site of Wal-Mart's large RFID rollout in Texas. "They're not using East Coast plants for RFID. We have to beg and sweet-talk vendors to ship us product with RFID tags," Boyt said. "[Still,] we're staying ready." Besides Kraft, Hannaford has partnered with Gillette on RFID tests.

Boyt said Hannaford was interested in conducting RFID tests on traceability with pharmaceutical companies, given the "high dollar cost" of drug products.

In addition to reading RFID tags at the receiving dock, Hannaford links those reads with information obtained via advance shipping notices (ASNs) and scans of pallets' serialized shipping container codes. "We wanted a three-way match," Boyt said, though Hannaford found that the SSCC codes "were not reflecting [read rates] on the cases."

Hannaford is also working on warehouse and store "processes" using existing technology such as voice recognition and radio frequency that would pave the way to RFID.