Oct 27, 2009Metro Group has been steadily expanding its use of radio frequency identification based on Electronic Product Code (EPC) standards since 2006. Last week, at RFID Journal LIVE! Europe, Gerd Wolfram, head of the company's CIO office, spelled out some of the benefits the retail giant has seen since implementing the technology.
One application for which Metro utilizes RFID is receiving pallets of goods into inventory. Wolfram said his company tracks approximately 3 million pallets annually in Europe, and that there has been a "significant reduction of shipping mistakes and resulting compensation claims," a 15 percent decrease in the time it takes to unload trucks and a 50 percent drop in the amount of time required to verify that the correct items have been delivered. "RFID is not just enhancing efficiency," he told attendees. "It is also providing better data quality."
Another application is tracking promotional displays at Metro's Real hypermarket chain, where promotions account for 23 percent of the store's total sales volume. The information provided by the RFID system, Wolfram said, shows that sales are 54 percent higher if a promotional display is on the sales floor at the proper moment, when Metro or the manufacturer is advertising it. "With RFID," he stated, "we can ensure that the right product is in the right place at the right time."
Metro has also been testing RFID's ability to track meat stored in refrigerated displays at its Future Store (see At Metro's New Future Store, RFID Helps Assure Meat Quality). The system automatically tracks trays of meat within the refrigerated units, and informs butchers when they need to replenish a specific cut. The system significantly reduces out-of-stocks, Wolfram indicated, and by enabling more precise demand forecasting and real-time sales intelligence, it also decreases the incidence of write-downs by 25 percent. However, he added, tag cost still makes it too expensive to roll the application out to all of the company's stores, and the savings from reduced write-downs does not yet cover the expense of tagging the meat.
Metro has also been tracking goods tagged in Asia and shipped to Europe, beginning in 2006 (see Metro Group Expands RFID Pilot in Asia). Now, Wolfram said, the company could analyze its suppliers' ability to ship goods on time. He showed a chart that chronicled shipments from Hong Kong. Nearly two-thirds of the shipments, he said, were more than 5 days too late, while approximately 2 percent arrived too early. Having this data enables Metro to work with its suppliers to improve their performance.
One of Metro's next projects will be to test RFID's ability to reduce shrinkage. To that end, the retailer is currently working with Checkpoint Systems to deploy a system based on GS1 EPCglobal's recently announced guidelines for employing RFID in anti-theft applications (see GS1 Releases Guidelines for RFID-based Electronic Article Surveillance).
Wolfram reaffirmed that Metro is utilizing EPC RFID technologies to more efficiently respond to customer demands, by making its business processes leaner and more efficient, and by leveraging the additional data its RFID systems provide to manage the company more effectively.