Consequences

Was it an act of terrorism? Or was it a failure that occurred in the supply chain? In any event, Martin's suffered irreparable damage to its brand. The head office made the decision to close the store.

The local TV station would not let the story rest. It did an investigative report on the civil liberty issues and surveillance of innocent people through the use of their grocery store purchasing data.

Lessons from Martin's Supply Chain. What is the lesson for companies? It is the need to recognize the importance of having internal controls such as monitoring and accountability procedures in place to identify negligence in the supply chain or improper usage of personal data. The missing link in this case was the human element. It was the company's failure to ensure that its employees had the special competencies to manage the supply chain technology it came to depend upon. As a result, an innocent man was arrested and personal information was abused.

SIDEBAR: A Four-Step Process

Gradual adoption of RFID will follow a four-level road map, says John Fontanella, an analyst at AMR Research.

• Level 1 includes discrete RFID applications like those being piloted at some large retailers and their suppliers.
• At Level 2, RFID is applied to two or more units within a company. For example, a large aerospace manufacturer used RFID tags to monitor the flow of material from receiving to its production line.
• At Level 3, companies coordinate RFID-enabled processes with a limited number of supply chain participants. For example, a packaging manufacturer was unable to do vendor-managed inventory in a traditional way and therefore installed RFID readers at customer sites to monitor consumption of its products.
• At Level 4, RFID is used by virtually all supply chain participants throughout an industry, which is what Wal-Mart is attempting to bring about.