Nov 29, 2006This article was originally published by RFID Update.
November 29, 2006—German retailing giant and RFID early adopter METRO Group today announced a pilot with Savi Networks that will see the real-time RFID-based tracking of containers originating in Asia and bound for METRO's European distribution centers.
Called Advanced Logistics Asia, the six-month project will be managed by METRO Group Buying Hong Kong (MGB Hong Kong), an existing entity charged with management of the retailer's worldwide sourcing, procurement, and imports. MGB Hong Kong will use the SaviTrack solution, Savi's web-based information service that offers a real-time window onto a visibility-enabled supply chain.
Battery-powered active tags will be attached to Germany-bound containers of select retail products. The containers will be tracked across a global RFID reader network stretching from Asia to Europe. The tracking path begins at a consolidation center in Hong Kong, passing through the Port of Hong Kong, arriving in Europe at the Port of Rotterdam in the Netherlands, and finally arriving at the inland Port of Duisburg in Germany. From there the tagged goods are delivered to METRO's distribution center in Unna.
According to the announcement, METRO hopes to realize the full gamut of benefits so often associated with RFID-enabled supply chain visibility, including improved management, locationing, and security of goods as they are shipped, as well as reduced lead times and inventory. The company's managing director of information technology Dr. Gerd Wolfram said, "This innovative project with Savi Networks helps METRO Group to move closer to our vision of having a competitive advantage through a fully digitized supply chain."
The pilot is significant for two reasons. First, it represents the pairing of two RFID powerhouses. METRO Group is considered one of the preeminent retail adopters of RFID, probably second only to Wal-Mart globally and certainly first in Europe. The company has been very direct about its intention to adopt RFID across its entire supply chain, and it has been refreshingly public in discussing the details of its efforts. (Many similar initiatives remain hush-hush, to the chagrin of vendors and end users alike -- see yesterday's Users Tell RFID Vendors: "Show Us the References".) METRO's heavily-trafficked distribution center in Unna, Germany, has long been a staging point for adoption and innovation in RFID, including the recent 36-reader trial that represented a breakthrough in UHF performance in Europe (see European RFID Test Sees Near-Perfect Read Rates).
For its part, Savi Technology has a veritable lock on international active RFID-based shipment and container tracking, a position that is only expected to strengthen since its $400 million acquisition by giant defense contractor Lockheed Martin earlier this year (see Lockheed Martin to Buy Active RFID Leader Savi). Savi Networks, with whom METRO is executing the pilot, is actually a $50 million joint venture between Savi Technology and port developer and operator Hutchinson Port Holdings that launched in April of last year with the aim of deploying a global active RFID-based container tracking network.
The other significance of the announcement is it represents a major move by METRO to expand visibility "up" the supply chain. The concept of source-tagging in which goods are tagged upon manufacture in, say, a Chinese factory, has long been discussed as a possible eventuality of RFID adoption. While source-tagging is likely many years away, this pilot is clearly a step in that direction. Said METRO's Walfram, "Ultimately, we want a completely transparent supply chain from smart factory floor to smart store shelf, and solutions around both passive and active RFID are playing an increasingly important role in reaching that vision."
Read the announcement from Savi and METRO
