The retailing group is implementing RFID technology throughout its supply chain in phases. Since 2 November 2004 suppliers have been delivering pallets and clothing consignments labeled with transponders to Metro Cash & Carry, Real, Kaufhof and METRO Group Distribution Logistics (MDL). METRO Group’s sales divisions and cross service companies made important contributions by fitting all store and warehouse goods entry gates with RFID technology, right on schedule for the RFID roll-out. The first group of consumer goods suppliers started providing boxes and outer packaging in summer 2006 with RFID transponders. In 2007, the METRO Group will press ahead with the introduction of RFID technology all over Germany. This entails providing all 60 Metro Cash & Carry wholesale stores, up to 100 Real hypermarkets and all distribution warehouses of the MGL METRO Group Logistics in Germany with RFID by the end of the year.

Consumer goods companies pick the goods in their warehouses and put together the consignments for METRO Group. During picking the Electronic Product Code (EPC) is stored on the RFID transponder and attached to the outer packaging, boxes or pallets. The respective information about the consignment is stored in the warehouse management system.

Workers bring palettes which are to be shipped from the central warehouse to the loading bay. RFID readers in the exit gates read the EPC stored on the RFID transponder affixed to the pallet and transmit this number to the warehouse management system. The pallets, boxes and outer packaging are booked out of the system and the recipient, e.g. METRO Cash & Carry in Mühlheim is sent an electronic dispatch note.

The goods reach the goods receiving by truck. Workers unload the goods and pass the goods entry gate. Readers scan the individual transponders attached to the delivery in seconds and transmit the EPC information to the IT system in the central warehouse. This data is then automatically reconciled with the electronic dispatch note. Manual goods entry checks are a thing of the past.

As part of the METRO Group Future Store Initiative, the METRO group are testing and developing practical concepts for future retailing with partners from the IT industry as well as with consumer goods manufacturers and service providers. The METRO Group RFID Innovation Center in Neuss tests how advanced applications can best be applied in practice – not only in terms of retail inventory control but also at the individual product level itself where visitors have the chance to find out for themselves just what RFID technology can really do for them.

One example of an advanced application on the product level is smart shelves which contain products with attached smart chips. Readers in the shelves recognize if a product is running low or if a product has been placed on the wrong shelf. If this is the case they automatically inform staff, who can then order new stock at an early enough stage or can reposition the goods on the correct shelf.

As soon as a product passes through a security gate or a cash-desk at the store exit without the smart chip having been first de-activated, an acoustic signal is triggered. RFID tags can therefore also serve as security tags.

The preliminary results of the RFID implementation in the supply chain are promising and therefore in 2007, METRO Group will be extending the implementation of RFID. In addition to this, METRO group will be testing the technology internationally.

The long term aim of the METRO Group is to use RFID along the entire international supply chain. Outside of Europe, in this respect, China plays an important role here because for retailing companies, the country is the largest supplier market on the Asian continent. This is the reason why METRO Group launched the program “Advanced Logistics Asia” in October 2006 to introduce RFID technology along the supply chain between China and Germany.

In various pilot projects and test scenarios the METRO Group is testing to which extent RFID technology can improve the flow of goods in terms of efficiency and transparency from the manufacturers in China via the distribution centers in Europe to the stores in the METRO Group. Under the project, “Cross Border Visibility”, for example, a Chinese logistics provider tags selected packages with passive RFID transponders in Hong Kong. An RFID gate for outgoing goods on the exporter’s premises identifies the shipment and automatically checks that it’s complete. From there the shipment goes to Germany travelling via different ports. At the MGL distribution center in Unna, the goods are checked again using RFID. A reader at the goods incoming gate checks whether all products ordered have been delivered. In a second step, in the project, “Global Cargo Visibility”, complete containers are equipped with RFID tags and can be identified at various points on the route from China to Germany. In this way, RFID not only increases the speed in global goods movements but also helps monitor the entire supply chain.

The METRO Group presented another component of the ALA initiative in Hong Kong in late May 2007: the pilot project known as "Tag it easy". This project entails 26 Chinese suppliers of the METRO Group fitting their products with RFID transponders. By way of the Metro Link supplier portal, the Chinese suppliers can order the exact RFID labels they need for sending their products to the METRO Group. A simple hand-held scanning device enables the Chinese suppliers to record their outgoing goods, send the information in turn to the supplier portal of the METRO Group and use this information to create a precise packing list. This represents a significant increase in data quality.

The know-how between retailers and the Chinese manufacturers takes place at the “Supply Chain Innovation Center” in cooperation with the standardization organization, GS1 Hong Kong and the Hong Kong Science and Technology Parks. The METRO Group will participate in this important institution within the framework of its “Advanced Logistics Asia” initiative.