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METRO Group begins using RFID in logistics

29.10.2004

METRO Group begins using RFID in logistics

The METRO Group begins the introduction of Radio Frequency Identification (RFID) in logistics. Starting on November 2, 2004, 20 of METRO Group’s suppliers will equip goods pallets with what are known as Smart Chips. Selected warehouses of the METRO Group as well as outlets of the Metro Cash & Carry, Real and Kaufhof sales divisions are participating.

The METRO Group is concentrating on the application of the new technology in logistics and storage management. Participating suppliers will first install Smart Chips in goods pallets. Smart Chips are thin identification labels which contain a programmable chip and an incorporated miniature antenna. RFID readers will be installed on the goods-in and goods-out of participating outlets. They record the Electronic Product Code stored in the Smart Chip and transmit it to the merchandise management systems. Every shipping unit can be clearly identified from the number code. This makes it possible to systematically trace and manage goods along the entire process chain – all the way to the warehouses of the respective store.

Next steps for RFID launch in planning

"The METRO Group is one of the first retailing companies to use RFID for the daily processes between the consumer goods and retailing industry," said Zygmunt Mierdorf, management board member of the METRO Group. "We see our commitment as a vital contribution to the innovation offensive in retailing." The METRO Group will begin the second phase of the RFID launch as early as next year. At that point, the participating industry partners will not only equip pallets with Smart Chips, but also transport packaging. This will allow the METRO Group to automate processes such as goods-in and goods-out, supply management as well as sorting in warehouses and retail outlets.

Advantages of RFID are proven

"With the broad use of RFID technology, we can make our processes more efficient, increase the availability of goods and security, and decrease costs. Our customers stand to profit considerably," according to Mierdorf. A study conducted by consultants at Kurt Salmon Associates in the METRO Group’s Future Store showed that the availability of goods increased significantly as a result of RFID. Out-of-stock-situations fell by between 9 percent and 14 percent. The waste of goods was also reduced by up to 18 percent.

The METRO Group has been preparing the RFID launch intensely for the last few months in cooperation with the sales division as well as partners from the consumer goods and IT industries. In addition to the Future Store, the RFID Innovation Center in Neuss was particularly helpful. The METRO Group provides the opportunity to get to know and test the professional use of RFID there under real conditions on over 30 installations in 1,300 m² of floor space.

* The following suppliers are involved in phase one of the RFID rollout.

- Colgate-Palmolive GmbH
- Dr. August Oetker Nahrungsmittel KG
- Esprit Europe Services GmbH
- Gerry Weber Service International GmbH
- Gillette Gruppe Deutschland GmbH & Co. oHG
- GlaxoSmithKline GmbH & Co. KG
- Hakle-Kimberly Deutschland GmbH
- Henkel Wasch & Reinigungsmittel GmbH
- Johnson&Johnson GmbH
- Kraft Foods Deutschland GmbH
- Lever Fabergé Deutschland GmbH
- Maggi GmbH
- Nestlé GmbH
- Pap Star Vertriebs GmbH & Co. KG
- Procter & Gamble GmbH
- SCA Hygiene Products AG / GmbH
- Schwartauer Werke GmbH & Co. KG
- Schwarzkopf & Henkel Cosmetics GmbH
- Triumph International AG
- Unilever Bestfoods Deutschland GmbH

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