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METRO Group is the world’s third largest retailer. When it announced plans to adopt RFID technology throughout its supply chain and its “Future Store” in Rheinberg, Germany, there were divergent opinions in the industry, many of which were skeptical. However, as Metro’s adoption of RFID has achieved tangible results, and the expected operational advantages of using RFID technology, such as time saving, cost reduction, and improved inventory management, will be realized one by one. The outside world’s original doubts have become enviable, and Metro has also decided to speed up its deployment. The pace of the RFID program has shifted from the experimental pilot stage to the formal use.
Zygmunt Mierdorf, Chief Information Officer of Metro, said: “The improvements we have achieved in daily work after using the RFID solution can be described as immediate results. As envisaged, the goods delivery procedures in warehouses and stores have been greatly accelerated, and the time wasted on delivery in the past has been greatly reduced. In addition, RFID has assisted us in identifying and correcting the weak links in the goods handling process. The process of putting goods on shelves in the warehouse has also been improved. In general, our work efficiency has increased, while the number of out-of-stocks in the store has decreased.”
Metro has department stores, hypermarkets and grocery stores in 30 countries and regions in Europe and Asia. In 2002, it announced its “Future Store” plan, calling on more than 50 partners to jointly develop and test new applications, covering all aspects of the retail supply chain, including logistics and customer experience in retail stores. In terms of RFID readers, Metro chose only two supplier partners to cooperate, one of which is Intermec. Intermec has participated in several large-scale RFID pilot programs of Metro.
In November 2004, when most RFID manufacturers were still paying attention to the finalization of EPCglobal’s second-generation RFID standard and the upcoming implementation of the mandatory label project deadline, Metro’s pallet tracking application had completed the trial phase and was officially put into operation. In January 2005, other supply chain projects have just been launched, and the details of the second-generation standard have been settled. Metro has taken the lead in celebrating the “100-day anniversary of the successful implementation of RFID”. During these 100 days, Metro has adopted Intermec’s Intellitag RFID The reader has successfully identified more than 50,000 pallets, and its label reading rate has exceeded 90%. In addition, Metro’s official implementation of RFID has achieved similar results as the pilot plan: warehousing labor costs have been reduced by 14%, inventory availability has increased by 11%, and cargo loss has been reduced by 18%.
In March 2005, Metro, together with Intermec and Philips Electronics, demonstrated the first commercial application of EPC’s second-generation RFID system, demonstrating the ease of upgrading from an ISO18000-6B-based system to an ISO, EPC and ETSI compatible system Way to meet the needs of a truly global supply chain.
From pilot plan to formal implementation
In view of the great success of the pilot program, Metro decided to establish a comprehensive RFID pallet tracking center in its busiest distribution center in Unna, Germany. Metro has deployed a number of RFID applications at the center, including a system that can identify clothes on hangers, and its handling capacity exceeds 8,000 items per hour.
Metro decided to cooperate with Intermec again to use its RFID reader in the aforementioned plan. At present, more than 40 Intermec fixed, hand-held and the latest truck-mounted RFID readers have been adopted.
Dr. Gerd Wolfram, Executive Manager of Metro’s “Store of the Future” project, said: “Intermec is familiar with RFID technology, and it plays an important role in Metro’s comprehensive implementation of RFID. Intermec’s equipment has demonstrated excellent reading rates and system performance, helping us Realize the efficient and accurate operational advantages of RFID for retailers.”
Pallet tracking is the basis of the RFID system in this distribution center. Approximately 20 Metro suppliers (which had increased to 100 by the end of 2005) used RFID tags on the boxes and pallets shipped to the distribution center. Pallets entering the warehouse pass through a portal with Intermec IF5 readers installed. The IF5 reader is a fixed intelligent data collection device. It collects the serial shipping container code (SSCC) on the pallet label and filters the data from the container label on the pallet. Then the SSCC is automatically reported to Metro’s SAP enterprise system and checked against the Electronic Data Interchange (EDI) transaction records of the Advance Shipping Notice (ASN) received by Metro. Pallets that meet the Metro’s system orders will be approved for acceptance. The relevant content will be automatically recorded as the items are put into the warehouse, and the inventory system records will be updated.
Many outstanding functions of the IF5 reader have contributed to the success of this project. This is a highly intelligent reader. The built-in software system can process the data read by the tag in advance. Transfer to the system. Data processing makes communication faster and provides “pure” data for enterprise-level applications for further processing. By using the interface developed by Intermec, IBM’s Websphere Everywhere software can also run on IF5, providing additional data purification support.
Metro also uses the input/output ports of the IF5 reader to integrate mobile sensors. When the sensor detects a pallet that is gradually approaching, the reader will automatically turn on and send out a reading signal. The reading signal can be sent without manual operation, which greatly reduces labor costs, and the signal is needed when needed. It was issued at the time to assist Metro in complying with environmental protection and radiological regulations. The output port controls an indicator light. When the tray is counted, it will light up in green, and light up in red to indicate that there is a problem.
After the system confirms to accept the pallet, it will transmit the instructions to the Intermec CV60 on-board computer on the forklift via 802.11 wireless LAN to inform the forklift operator to carry out the warehousing operation. In order to ensure that the correct pallet is processed, the operator will use the Intermec IF4 reader to read the SSCC tags. Since the forklift can only approach the European-standard pallet from both sides, this requires the reader to read the tags around the corner of the pallet. Metro and Intermec solved this problem by experimenting with different label and reader placement methods.
Mierdorf said: “Although we have encountered many technical challenges, we have finally been able to greatly improve the delivery process of goods and enjoy the fruitful results brought by RFID.”
When the forklift operator arrives at the cargo waiting area, the on-board system will automatically read the permanent cargo location tag. The system automatically checks the planned cargo location and the read instruction information to prevent misplacement. Then, the operator receives the next placing or picking task via the wireless LAN.
According to Metro’s statistics, after using the RFID system to identify pallets, confirm delivery, and handle warehousing, the inspection and unloading time for each truck has been shortened by 15 to 20 minutes. Time saving improves worker productivity. Out-of-order shipments will be found immediately, thus greatly improving inventory accuracy, allowing Metro to reduce out-of-stocks by 11%.
At the same time, the reverse operation process also ensures that the warehouse can deliver the goods to the retail store accurately and quickly. The forklift operator accepts the order through the instructions on the CV60, confirms the pickup location by reading the RFID location tag, and then confirms the picked goods by reading his RFID or barcode tag. The picked goods are sent to the packaging area, where they are loaded on pallets and sent to the relevant store.
Each order in a store usually contains different goods. It is common to mix multiple pallets. Therefore, it is very important to accurately identify each item in the pallet. After the goods are scanned, the data will be compared with the order information in the host system. When all the items listed in the order have been found, the pallet will be packaged, the Intermec Intellitag RFID tag on the pallet will be read, and the pallet content will be linked to the pallet ID in the Metro data system. The pallets are then approved for delivery to the store, where an automatic RFID collection system similar to the distribution center will be used to check the delivery and record of the goods.
Ride the victory
In view of the great success of the previous plan, Metro and Intermec further cooperated to expand the scope of the RFID program.
In 2006, all Metro “Cash & Carry” brand wholesale stores throughout Germany officially launched Intermec’s second-generation radio frequency identification technology (RFID). Starting from April 1, METRO Group’s suppliers can already ship pallets with second-generation RFID tags to the company.
Metro Cash & Carry is a leader in self-service wholesale stores. It uses a set of advanced second-generation RFID facilities, including Intermec’s second-generation IF5 UHF RFID reader and IBM’s middleware. The second-generation RFID technology applied to Metro stores builds a platform for compatibility and collaboration of various RFID products and systems, which effectively assists in tracking the whereabouts of pallets, thereby improving inventory management.
The use of Intermec’s second-generation RFID technology to track pallets in Metro Cash & Carry stores is only the first initiative of the group’s related plans. Metro and Intermec are discussing the application of second-generation RFID technology to their tracking of cargo boxes.
Dr. Gerd Wolfram, Managing Director of MGI Metro Group Information Technology Co., Ltd. said, “The second generation of RFID technology is right in front of you. Intermec is a strategic partner to assist Metro in the deployment of RFID technology. Carry builds a practically usable second-generation RFID equipment system, and at the same time proves that the two companies are pioneers in adopting this new technology.”
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