Mandates from Metro Group, the world's fifth largest retailer, would push through the European adoption of the Gen 2 Electronic Product Code (EPC) technology as a means of tracking goods throughout the supply chain.
RFID has long been touted as the future of logistics for all companies by allowing retailers and suppliers to track goods throughout the supply chain. However high prices for tags and systems has held enthusiasm at bay. Privacy concerns have also limited its use at the consumer level. However mandates from such giant retailers as Wal-Mart and Metro is slowing forcing processors to make investments in the system.
Metro Group started swapping out its existing Gen 1 readers in April of this year, according to a report by RFID Journal. Twenty-two Metro Group locations are working with RFID technology at the pallet level. Among the stores involved are those that are part of the group's Metro Cash & Carry chain, Kaufhof and Real sales divisions, and several distribution centres. All of them have started using Gen 2.
Metro is using readers from two vendors-Everett, Wash.-based Intermec Technologies and Toronto-based Sirit Technologies - the journal reported. Other hardware being used include the Intermec Gen 2 IF5 UHF RFID reader and the Sirit Infinity 510 UHF EPC Gen 2 interrogator. About 40 consumer packaged goods companies are tagging pallets shipped to Metro-including Procter & Gamble (P&G), Henkel, Johnson & Johnson and Esprit. The companies began affixing Gen 2 tags in April this year.
From July onward, the suppliers involved in the companies deployment of RFID will have completely turned to Gen 2, the retailer is quoted as stating.
More and more retailers are pushing their suppliers to use RFID as a means of tracking products more efficiently through the supply chain. In 2004 Wal-Mart, the world's largest retailer, announced it would require its top suppliers to implement RFID. In Germany, Metro has an ambitious programme to use RFID for all products to the point of sale. The company has set a commercial test outlet, called "Future Store", to test RFID, among other technologies.
Metro is at the forefront of European efforts to create a better supply chain system. Metro was named as the European test lab by EPCglobal, a fledgling standards setting agency, for the further development of RFID technology. The aim is to construct a global supply chain information network that combines RFID technology, existing communications network infrastructure and EPC, a number for uniquely identifying an item. Generation 2 refers to an updated version of the standard, which makes tracking and tracing systems compatible throughout the world.
A unified data system would allow changes in information about product sizes, weight, name, price, classification, transport requirements and volumes to be immediately transmitted along the supply chain. For example it would allow shippers to immediately know if the amount of product stacked on a pallet had changed, or give a retailer time to adjust display space.
Nestle, Coca-Cola, PepsiCo, Hormel Foods, Kraft, Unilever, Wegmans Food Markets and Sara Lee are among the food processors helping to develop the supply chain standard by using the EPCglobal's Global Data Synchronization Network (GDSN).
As part of that push Metro Link has launched what it bills as a "future store" online portal, called "Metro Link".
Suppliers will be able to access the Metro's data warehouse online, allowing them to manage their products and even the design private brands in a digital workflow, according to Lebensmittel Zeitung, a Germany-based news publication.
RFID uses a wireless system that helps enterprises track products, parts, expensive items and temperature-and time-sensitive goods. Transponders, or RFID tags, are attached to objects. The tag will identify itself when it detects a signal from a reader that emits a radio frequency transmission.
Each RFID tag carries information on it such as a serial number, model number, colour, place of assembly or other types of data. When these tags pass through a field generated by a compatible reader, they transmit this information back to the reader, thereby identifying the object.
RFID is being seen as a step up on bar codes by giving those in the supply chain the ability to track individual products and obtain more data.
Metro Group had sales of €56.4bn last year. The group has supermarkets in 30 countries and a workforce of about 250,000.