This past March, a Wall Street Journal detailed how Dole was using radio frequency identification (RFID) tags to better track its lettuce and other produce as it moved from the farm fields through the processing facility and, ultimately, to the store shelf.
The company took this action in response to the September 2006 crisis in which some of its bagged spinach was implicated in a serious E. coli outbreak that killed three people and sickened hundreds more.
RFID is on the case
Was the investment in RFID worth it? I'd say "absolutely," because just the other day, news broke that concerns of another E. coli outbreak had sparked a recall of Dole-grown lettuce. It's worth noting, however, that this most recent recall differs vastly from the one in September 2006, which had been initiated after serious problems arose. This time, the company took prompt and preemptive action before any consumers were known to have become ill.
On Monday, Dole initiated a voluntary recall. More significantly, the company was able to pinpoint precisely which bags of lettuce were most likely to have been exposed to the bacteria, and it knew exactly where those bags of lettuce were.
So detailed was the information embedded in each RFID chip that Dole officials knew that only bags with the production codes "A24924A" and "A24924B" were at risk, and that 528 bags had been distributed in Canada and 4,530 bags across eight states in the U.S..
The company was able to ascertain this much information because each RFID chip was capable of documenting where every head of lettuce was produced, which facility processed it, what production batch it was bagged in, and ultimately where each bag was sent.
No shortage of other opportunities
All this is significant because it demonstrates the incredible potential of RFID technology, not only to help large companies keep tight track of inventory, but also to lower costs by limiting recalls to only the products that are at risk. For instance, in Dole's case, the company didn't have to recall every single bag of lettuce across North America. And by being able to take such swift action, the company was also likely able to reduce its exposure to legal liability issues.
The folks at Dole didn't return my calls, so I don't know which company supplies it with RFID chips, but you can bet that many major manufacturers -- especially companies such as Mattel
The potential is there for RFID to benefit other industries as well. One industry that immediately springs to mind is the pharmaceutical sector. Pfizer
Foolish bottom line
All told, I think Dole's experience represents a watershed event for RFID technology. Companies engaged in manufacturing RFID chips -- including Intel
Interested in reading more about RFID-related Foolishness? Check out these articles:
More from The Motley Fool
Why Netflix, Inc. Stock Jumped 13% This Morning
The streaming video pioneer added 8.3 million new subscribers in the fourth quarter -- more than 30% better than expected.
Better Buy: Micron vs. NVIDIA
You might be surprised by the winner.
Why Amarin Corporation Stock Is Surging Today
Vascepa's long-awaited cardiovascular outcomes data are close at hand.