Industry readies for EPC mandate: Wal-Mart leads way—converters are urged to help their customers prepare

Paperboard Packaging, Dec, 2003 by Jackie Schultz

Wal-Mart and the U.S. Department of Defense have issued a request for their suppliers to comply with certain supply chain protocol. Wal-Mart is requesting that its top 100 vendors start using Electronic Product Code (EPC) technology at the case and pallet level by Jan. 1, 2005. By the end of 2006, all Wal-Mart vendors will have to meet this requirement, says Ron Moser, strategy manager, Logistics Information Systems Department, Wal-Mart.

Moser was a speaker at the TAPPI Corrugated Packaging Division Conference, Oct. 12-15, at the Hyatt Regency Dallas in Texas. He participated in the panel discussion, "Electronic Product Code Early Adoption Strategies."

About 1,170 people attended the four-day event, which included two days for the CorrExpo[R] tabletop trade fair.

Panel presenters strongly recommended that corrugated container manufacturers get involved in helping their customers determine how best to apply this new EPC technology.

EPC replaces barcodes on packages and is a system that facilitates commerce in the retail industry, says Bud Babcock, customer packaging and product identification manager for Procter & Gamble and session modera-tor. It uses smart chip and RFID (Radio Frequency Identification) technology.

"The electronic product code actually builds on the UPC foundation," Babcock says. "It will help us to drive inventory out of the system and understand where our inventory is in real time all the time. It will also tell us what we need to do from a production schedule standpoint to make sure we're meeting the needs of the end user."

Other EPC benefits for the retailer include theft deterrence and product authentication. Advantages for the manufacturer include real time visibility, higher accuracy, lower inventories, better productivity, and increased sales.

Although Wal-Mart has established a timeframe for EPC implementation, there remain many unanswered questions, such as how the tags will be attached to a corrugated box and how a company ensures that the right tags are used in the right place. In addition, Babcock says, "There's a large quantity of data and how do you manage it?

"We've done all this stuff in the lab, but to scale it up to a global industry standard is a huge task and that's where we'll need your help," he states.

"This is real and this is coming," says Guilermo Gutierrez, marketing manager for smart packaging, International Paper (IP). "IP believes this is very relevant to our industry. Many analysts are saying, 'Will Wal-Mart blink? We don't believe they will. The reason is in a fully rolled out EPC world, Wal-Mart's bottom line will be impacted by $5 to $8 billion."

Between 60 to 80 percent of the benefits in the Wal-Mart supply chain are captured at the case and pallet level, Gutierrez says. Wal-Mart's top 100 vendors represent about 1.3 billion cases annually.

"The biggest challenge outside of the technology is there are no skilled integrators. They're coming to packaging suppliers," he adds, noting that corrugated box sales representatives are already being contacted by retailers for help with this.

"Our customers are coming to us and saying, 'What does this mean, how can you help us?'" he says.

Gutierrez and other panel members recommend box plants read more about this technology by visiting the Auto-ID Center Web site at the Massachusetts Institute of Technology (MIT). Founded in 1999, the center is headquartered at MIT's School of Engineering. For more information, visit www.autoidcenter.org.PBP

RELATED ARTICLE: Corrugated division elects officers.

TAPPI's Corrugated Packaging Division released the results of the elections to the recently formed Corrugated Packaging Council, the governing body for the division. The seven newly elected council members will join six appointed council members and two current officers, Chairman Thomas Fullove and Vice Chairman Cassie Rothstrom. Richard Klick, corporate accounts manager for Container Graphics Corp., White Bear Lake, Minn., is elected second vice chairman.

Elected to the three supplier category positions are William Kahn, vice president and general manager of Harper/Love Adhesives Corp., Charlotte, N.C.; Robert Morgan, president of Geo. M. Martin Co., Emeryville, Calif.; and Jeff Pallini, vice president and general manager of Fosber America, Inc., Green Bay, Wis.

Chosen by TAPPI members to fill the three member-at-large positions are David Carlson, director of quality assurance for Smurfit-Stone Container Corp., Chicago; Dennis Roberts, general manager of Weyerhaeuser Co., Magnolia, Miss.; and industry consultant Robert Sukenik. All three of the members-at-large are past chairmen of the Corrugated Division.

RELATED ARTICLE: Lewisburg wins Corbie award.

Lewisburg Container, Lewisburg, Ohio, wins the Corbie/Best of Show honor at TAPPI International Corrugated Packaging Conference's CorrPak competition. The winning package was for a Hoover vacuum cleaner. Sun Chemical's Bob Cantu organized and chaired this year's competition.

Other categories and the first place winners are: