Metro plans full RFID rollout
scheme with a full rollout, something that will affect hundreds of
suppliers around Europe.
The rollout is scheduled to begin in November when 20 consumer products suppliers to the major international retailer will place RFID tags on pallets of goods, with another 80 suppliers scheduled to follow next year. By January 2006, Metro Group plans to have 300 suppliers sending RFID-tagged pallets and cases to its distribution centres.
The announcement follows a thorough analysis of Metro's Future Store Initiative, a scheme in Rheinberg, Germany, which demonstrated how emerging technologies can benefit retailing operations from inventory to point of sale.
The group believes that as a result of RFID, process efficiency rose by 12 per cent to 17 per cent. Losses and theft were down 11 per cent to 18 per cent, and merchandise availability increased 9 per cent to 14 per cent.
Metro Group, the world's fourth-largest retailer with a turnover of more than €54 billion, aims to become the first in the business to install RFID technology throughout its entire process chain. The group opened its RFID Initiative Centre in Dusseldorf, Germany earlier this year in order to test the technology under real conditions.
The centre is an RFID working platform for the retail and consumer products industries, which will allow suppliers to test their readiness for RFID while evaluating emerging technologies for retail.
IBM is providing the overall systems integration and technology for the centre.
RFID technology is being driven hard by retailers such as Metro and Wal-Mart, which see RFID as the natural replacement of industry's current bar code-based tracking systems, allowing companies to automatically track inventory throughout an entire supply chain. RFID automatic data collection typically does not require line of sight or manual scanning as do most bar code-based systems.
For example, information from RFID-tagged cases on a pallet can be read automatically using fixed, mobile or handheld readers rather than requiring individual bar code scanning.
Wal-Mart is now but six months away from its deadline for the top 100 suppliers to put tags on all pallets and cases. In Europe, legislation enforcing manufacturing traceability comes into force in January 2005.
As the largest single customer of many manufacturers in the US, Wal-Mart is seen as the driving force behind the concept. The organisation is trying to create the critical mass necessary for RFID to take off, and expects all 10,000 of its suppliers to tag their cases and pallets by January 2006.
Wal-Mart believes that the pilot scheme has so far been very encouraging. "We're seeing the positive results we expected," said Linda Dillman, executive vice president and CIO for Wal-Mart Stores. "We also anticipated hitting a few minor bumps in the road, which has happened. The whole reason for a pilot is to fix any last minute issues and clear the path for a smooth implementation. That's what we're doing and we're looking forward to January 2005 with great expectations."
