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Metro Is Back on Track

The retailer planned a bold RFID deployment in 2004, which was derailed by a host of issues. But now the company is moving full-steam ahead to implement EPC Gen 2 technology in its supply chain.
By Jonathan Collins
Tags: Apparel
Oct 01, 2006Metro AG's retail empire stretches across several businesses and more than 2,200 stores operating both in Germany and in markets around the world. Its businesses range from local supermarkets to large cash-and-carry outlets and from downtown department stores to suburban electronics superstores. From his spacious modern office-located in one of a dozen or so office buildings on Metro's campus in Flingern, a mainly residential area of Düsseldorf-Gerd Wolfram, managing director of MGI Metro Group Information Technology, works on developing and deploying an RFID infrastructure for the company's disparate businesses and supply chains.

"Metro has different businesses with different requirements from RFID," says Wolfram, as he draws diagrams to illustrate the complexity of three Metro supply chains on the back of a presentation on his desk. "Metro Cash & Carry stores are very keen about RFID because they are always looking for efficiency in their processes, but they are supplied by very few DCs [distribution centers] in Germany. For Real and Extra [supermarkets], there is additional complexity because they are supplied by several DCs. And at Galeria Kaufhof [department stores], the interest is in RFID-tagging apparel, which is, again, a different business. Kaufhof is thinking item-level tagging, while the others are thinking pallet and carton level."

From his office on Metro's campus in Flingern, Germany, Gerd Wolfram, managing director of MGI Metro Group Information Technology, explains the challenges of developing and deploying an RFID infrastructure for the company's disparate businesses and supply chains.

In 2004, Metro launched RFID in these three supply chains. It outfitted nine distribution centers and 11 stores across Germany with RFID portals. The interrogators stand ready to automatically record many thousands of Electronic Product Code-tagged pallets delivered from suppliers. They're networked to a back-end enterprise management system-dubbed Metro Link-that can immediately check that deliveries match orders, update inventory management systems and alert suppliers when their shipments arrive at Metro.

But most of the time, Metro's interrogators stand idle. With only around 50 suppliers tagging pallets-and just a part of their shipments-they have little work to do.

It wasn't supposed to be this way. Metro, the fourth largest retailer in the world and the largest in Germany, should have been receiving tagged shipments from more than 100 suppliers since the end of 2005. Instead, a host of issues-including a lack of Gen 2 tags and interrogators, supplier reticence to start tagging goods and restrictions on the radio frequency spectrum available for UHF RFID-blighted the highest-profile EPC deployment in Europe. Metro admits that it underestimated what work was required.
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