May 30, 2006Germany's Metro Group has begun deploying and using Gen 2 Electronic Product Code (EPC) technology at its RFID-enabled locations. Metro Group, the world's fifth largest retailer (based on sales), is a bellwether company for European adoption of EPC RFID in the retail supply chain.
The deployment comes almost a year after the company first started working with Gen 2 technology (see Metro Group Goes Live With Gen 2). Still, it is in line with the firm's expectations, given earlier restrictions on the availability of Gen 2 hardware (see Metro to Deploy Gen 2 in Mid-2006).
Metro Group started swapping out its existing Gen 1 readers in April of this year. "Twenty-two Metro Group locations are working with [RFID] technology at the pallet level," says Albrecht von Truchsess, a spokesman for the retailer. "Among these are stores of our Metro Cash & Carry, Kaufhof and Real sales divisions, and several distribution centers. All of them have started using Gen 2."
Metro is deploying readers from two vendors—Everett, Wash.-based Intermec Technologies and Toronto-based Sirit Technologies. The retail giant is using the Intermec Gen 2 IF5 UHF RFID reader and the Sirit Infinity 510 UHF EPC Gen 2 interrogator. Around 40 consumer packaged goods (CPG) companies are tagging pallets shipped to Metro—including Procter & Gamble (P&G), Henkel, Johnson & Johnson and Esprit—and began affixing Gen 2 tags in April this year.
"From July onward, the suppliers involved in our RFID project will have completely turned to Gen 2," von Truchsess says.
Metro first started using Gen 1 RFID tags and readers in its Future store initiative in April 2003 (see Metro Opens 'Store of the Future') as a way to test the technology's potential. However, the company began utilizing them to track incoming and outgoing pallet shipments across three retail sales divisions in November 2004 (see Metro Readies RFID Rollout). Metro says it expects to start to begin case-level tagging with selected partners in the second half of 2006.
Despite seeing operating benefits, the retailer has refrained from expanding its RFID deployment—in part because of a desire to wait for Gen 2 technology to be ready. Although Metro does not perceive the switch to Gen 2 as expansion in its use of RFID, more suppliers are expected to start tagging shipments. "It is our aim to achieve a profound implementation of the technology before adopting it on a broad scale," von Truchsess explains. "This approach allows us to gain experience with RFID." Because Gen 2 hardware is now available in sufficient quantities, von Truchsess adds, the number of suppliers using RFID will gradually grow this year.
Gen 2 brings improved performance over the initial EPC hardware, and also provides a single standard with which suppliers and retailers can work. While EPCglobal approved the Gen 2 standard in December 2004 (see EPCglobal Ratifies Gen 2 Standard), the first Gen 2 products were not commercially available until the second half of 2005. In the United States, Wal-Mart received its first Gen 2 tagged shipments in January of this year (see Wal-Mart Shipments Get Gen 2 RFID Tags).
Nonetheless, European versions of the technology, designed to operate in the 868 MHz frequency band mandated in Europe, have only recently become available. The Sirit reader, for example, was launched commercially at the start of May (see Sirit Announces Infinity Interrogator).