The Project: Push its 100 top suppliers to use "smart tags" embedded in product cases to track much of what the discounter sells.

The Payoff: Knowing where every item is, and keeping shelves stocked. Analysts expect Wal-Mart to reap pretax savings of as much as $8 billion by 2007.

Leading the way in the so-called smart-tags revolution, Wal-Mart Stores (WMT ) Inc. has asked its biggest suppliers to start using the radio-controlled inventory tags on everything from cases of Coke to pallets of Dove soap. Wal-Mart hopes to track inventory better, reduce the number of out-of-stock products, and most important, boost sales, because the right product will be in the right place at the right time. Now other retailers will have to follow Wal-Mart's lead.

By Wendy Zellner

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