Jul 30, 2003By Jonathan Collins
July 30, 2003 - Pittsburgh-based supermarket chain Giant Eagle is preparing an RFID pilot as part of an overhaul of its warehouse management system. The new system, which could
include RFID if the test goes well, will support the company's 214 stores across four states.
With estimated sales of more than $4 billion last year, Giant Eagle is one the largest food retailers in the United States. It is looking at RFID as a way to help streamline its distribution processes, reduce inventory levels and gain real-time visibility across its supply chain.
As part of that effort, Giant Eagle will deploy warehouse management and trading partner management software from Manhattan Associates. It was the software vendor's recent addition of RFID capabilities that helped secure the contract, according to Eric Peters, Manhattan's senior VP of products and strategy.
"Giant Eagle intends to use RFID in the future, and they wanted to make sure that their WMS solution is RFID-capable for the needs of the grocery industry," he says.
Giant Eagle has five distribution centers (DCs). The first site is scheduled to go live with Manhattan Associates warehouse management application in the second quarter of 2004. These centers, which range in size from 75,000 sq. ft. to more than one million sq. ft., serve as way stations for health, beauty and cosmetics products, meat, frozen foods, and dry or perishable goods (two facilities).
Although interested in the potential of RFID, Giant Eagle is cautious about setting goals for the technology's deployment. It says its plans for an initial RFID pilot are still in their "infancy stage," so executives from the grocery chain are reluctant to discuss details of the planned deployment.
Nevertheless, the company underlined that RFID was a key factor in its choice of supply chain execution systems. "We are very impressed with Manhattan Associates' early commitment to RFID, a key driver to achieving even greater levels of supply chain efficiency and productivity," Larry Baldauf, senior VP of distribution at Giant Eagle, said in a statement released by Manhattan Associates.
RFID promises to help Giant Eagle gain access to real-time supply chain information that will help it to better manage not just its DCs, but also its suppliers and the supply network as a whole.
Manhattan's Peters says that Giant Eagle's cautious approach is common; customers are concerned that the Auto-ID Center has yet to create a specification for read/write Electronic Product Code tags. "We have many customers ready to run pilots but just waiting for that standard," says Peters.
But Peters also says that Wal-Mart's June 11 announcement has pushed other Manhattan customers and some potential customers to start their own RFID pilots. "Some suppliers are starting to say, 'We don't need RFID pilots; we need to get into production right now,'" he says.