Intel Case Study On RFID Implementation At Metro Group

In the fiercely competitive high-risk retail industry, success depends on constantly increasing the availability of goods to meet consumer demand and maximise revenue streams. With a sales volume of 56.

4 billion last year, the Metro Group is one of the top five trading and retailing groups in the world and is strongly committed to using the potential of innovative new technologies to meet customer demands and to further its market leadership position. The major challenge in the complex retail environment is to assess not only how technology will increase product turnover, but what impact the technology will have throughout the supply chain.

The challenge

• Improving inventory management processes to lower warehouse costs, reduce out-of-stock situations and enable higher availability of goods to maximise revenue streams
• Transforming supply chain management processes by rolling out Radio Frequency Identification (RFID) technology from manufacturer to delivery onto the store shelf
• Delivering RFID transponders compliant with emerging EPCglobal standards to advance and support the worldwide standardisation of RFID technology

The solution

• Metro Group selected Intel® Solution Services to help advance the development and integration of RFID technology across supply chain processes including designing the architecture solution, project management, and vendor management;
• METRO Group launched a European RFID Innovation Center, engaging Intel Solution Services to develop test competencies, perform rigorous testing of RFID transponders, and advise on technical troubleshooting and resolution across the infrastructure environment.

According to Philipp Blome, Manager for Metro Group, Germany: “Intel® Solution Services consultants delivered the testing capabilities and expertise required to prove the value of emerging technologies to our partners and suppliers.”

Assessing the situation

In 2004, Metro Group launched an industry-leading RFID Innovation Center in Neuss, Germany, which provides a unique testing facility environment to further the retail’s use of RFID and wireless LAN (WLAN) technologies across the supply chain. This was a high-risk strategy, not only in terms of deploying new, emerging technology, but to be successful, the project required buy-in from key supply chain stakeholders and technology suppliers in order to increase availability of goods on the shelf and maximise profits. Metro Group selected Intel Solution Services (Intel Corporation’s professional services organisation) to spearhead project management and to complete critical design, testing and integration services to achieve the goal of seamless integration across existing infrastructure.Intel® Solution Services’ technical knowledge and expertise in evaluating network infrastructure and optimising Intel architecture, combined with key Intel stakeholder alliances – including SAP, IBM, Philips, HP and Cisco – were critical to defining the optimum solution for seamless technology integration. As part of the project design process.Intel® Solution Services experts, based in Germany, evaluated existing Intel architecture-based systems running business-critical applications across the network infrastructure to identify the technical issues and business benefits involved in deploying wireless and RFID technology across the entire supply chain.At the core of the design process, Intel® Solution Services needed to evaluate and identify the optimal technologies to be deployed across the Metro Group distribution framework. The Electronic Product Code (EPC) stored on transponders makes it possible to track goods, enabling high visibility of goods from distribution at the warehouse to delivery on store shelves. Metro needed a solution that would simplify the goods management process, reduce out-of-stock situations and achieve operational cost efficiencies across the business.

Metro Group has an international presence with over 2,400 locations in 30 countries, and is committed to the testing and application of new technologies to increase shopping convenience for customers, and to achieve maximum efficiency across the supply chain.

Key Technologies

• Extensive review and definition of the transponders and readers to be procured and deployed to achieve successful roll-out of pallet level RFID tagging.
• Rigorous testing conducted of EPCglobal standard EPC-Class 1 and Generation 2, enabling reliable recognition of RFID transponders at all identification sites.

Integral answers

• Intel® Solution Services recommendations are driving business process transformation across Metro Group’s supply chain, lowering operational costs and increasing efficiency;
• Intel® Solution Services managed the seamless technology integration phase, working with key alliance partners to deliver true return on investment (ROI).

Delivering the solution

The recommendations were developed at the Metro Group’s RFID Innovation Center.

Consultants reviewed test specifications, performed tests, and provided technical issue identification and resolution for implementing RFID tagging at the pallet level in supplier distribution centres.Intel® Solution Services managed the introduction of RFID reader scanning gates at the warehouse goods-in to process, enabling the information held by RFID transponders to be automatically uploaded to supply chain management applications, simplifying order processes and dramatically reducing operational costs. Working alongside two of Metro Group’s key suppliers, Proctor & Gamble and Henkel, the company then facilitated the rollout to warehouse sites and retail outlets, including Metro’s flagship Extra Future Store in Germany.From initial RFID tagging at distribution level, incoming goods now pass through an RFID reader gate at the warehouse. Up to 35 tags can be read per second, allowing fast reconciliation between goods ordered and goods received and improving the goods flow control system.

The respective RFID product data held on each pallet is then automatically transmitted to the inventory management system, enabling real-time visibility of products and significantly reducing time spent manually inputting product information. Intel. Solution Services also provided Metro Group with results-orientated project management to deliver seamless integration across the entire supply chain.

Return on investment

• Leading technology alliances with stakeholder technology vendors ensures seamless integration of RFID and WLAN technologies with existing infrastructure and business critical applications, maximising operational efficiency and significantly reducing back-end costs;
• Metro Group saw nearly 100% reading rate of RFID transponders for all defined logistic units;
• Metro Group supports retail adoption through its use of the emerging EPCglobal standard EPC-Class 1/Generation 2.
• Intel® Solution Services enabled Metro to set a new retail technologybenchmark.