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Europe Embraces EPC—Slowly

The European retail supply chain is unique—and so are the challenges of deploying RFID in Europe. While that has hampered some RFID pilots, companies remain convinced that the technology will deliver business benefits.
By Elizabeth Wasserman
Oct 01, 2006—Earlier this year, Ahold, the international supermarket and food-service giant, initiated two RFID pilots to track goods moving through the company's supply chains—one in the United States and one in Europe. The goal of both pilots was to use Electronic Product Code technology in the ultrahigh-frequency spectrum to track food and other goods shipped to distribution centers and then on to retail stores. But that's where the similarities ended. Ahold found that the road to EPC adoption in Europe was much more difficult—though not impossible—to navigate.

In the United States, where Ahold operates the Giant Food and Stop & Shop supermarkets, the RFID pilot got under way within eight months from concept. But in Europe, where Ahold operates the Albert Heijn stores in the Netherlands and the ICA supermarkets in Scandinavia—among other retail chains—the pilot took 16 months to deploy due to a lack of available Gen 2 RFID tags and interrogators.

The road to EPC adoption in Europe is still an uphill route.
Another bump in the road was the limited radio frequency spectrum for UHF RFID use in Europe, which posed a challenge to Ahold's goal of operating numerous interrogators at once at its distribution centers, each of which has up to 80 dock doors. There was no such problem in the U.S. pilot, where regulations enable companies to operate dense-reader environments.

Ahold isn't the only European retail giant to succumb to technical difficulties. Two of Europe's highest-profile RFID trials—those involving Metro AG in Germany and Tesco in the United Kingdom—have fallen behind schedule or have had to switch gears. Because of this, other retailers throughout Europe have been waiting on the sidelines to see the results of these much-publicized tests. Only recently have some begun testing the waters, including Belgium's Delhaize Group, which owns 2,500 supermarkets worldwide, and France's Carrefour Group, which owns 7,000 hypermarkets, supermarkets and convenience stores, mostly in Europe.

"It's a little slower than I was expecting," says David Weatherby, EPCglobal's European adoption program manager. "If you look at some of the things Tesco or Metro said a year or so ago, they're not as far as they were hoping to be."

Metro's plan to track EPC-tagged cases has been pushed back until the end of 2006. The company has recently switched from Gen 1 to Gen 2 EPC technology, after numerous delays in obtaining the Gen 2 hardware (see "Metro Is Back on Track").

Tesco's supply-chain trial, which started in October 2003 (the retailer announced plans to deploy RFID in its 1,400 stores and 30 distribution centers in the United Kingdom by the end of 2005), has been extended to only 40 stores and one distribution center. Tesco's chief technology officer John Clarke told attendees at the 2005 RFID Journal LIVE! conference that European retailers were encountering far more challenges in deploying RFID in their supply chains than their U.S. counterparts. "It appears to me, as a non-U.S. person, that here it's all ready, let's go do it and have fun," said Clarke, "whilst the European space is a very challenging environment."

But while European retailers have had to delay testing and/or deploying EPC technology in the supply chain, they have not been deterred. They are snapping up Gen 2 technology as it becomes available for new pilots. They are pushing government leaders for access to additional bandwidth within the UHF spectrum. And they are forecasting business benefits from RFID in terms of keeping store shelves stocked with the right goods, complying with new food and pharmaceutical tracking laws, tracking the reusable assets used to transport goods from distribution centers to stores, and automating the paperwork involved in shipping and receiving.

Still, the very nature of the European Union poses unique challenges to the deployment of RFID in the supply chain. Manufacturers often utilize different packaging, in different languages, adhering to different regulations for the same products destined for different European countries. To solve these problems, the European Union is taking steps to establish standards for the global supply chain (see "Come Together").
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