A senior executive at the $81 billion European retail giant Metro Group says the efficiencies the chain saw in RFID trials were so compelling they just had to deploy.
The chain, based in Germany, has informed all of its suppliers that they need to ship all RFID pallets to Metro fully RFID tagged by Oct. 1, said Gerd Wolfram, an IT managing director for the chain.
The initial phase of the full rollout
will impact about 180 locations, Wolfram said, including about 60 Cash
& Carry stores, nine distribution centers, some wholesale locations
and 100 Real stores.
One of the key hurdles to full-scale RFID deployments with U.S.
retailers has been low-read accuracy rates, but Wolfram said that
wasn't what his people found in European testing. "It's not a problem
at all on the pallet level," he said, adding that pallet-level read
rates were "about 100 percent."
It's only slightly weaker on the case level, Wolfram said, describing read-rate accuracy "at around 95 percent to 100 percent."
The Metro move is likely to be a key domino in global retail RFID
support, with Wolfram predicting that his United Kingdom neighbor will
be next. "Tesco will follow with an even bigger rollout," he said.
"There is now movement in the market and it will go forward."
In the U.S., Wolfram says Wal-Mart will be joined by more
aggressive efforts from Best Buy and Target. "In Japan, they do a lot
of things with item level, but they don't talk a lot about it in
public."
But mere support of RFID will not deliver most of its benefits
and this technologically change needs to be accompanied by a business
process change, he said.
"This is basic innovation in retail. This is the next step
forward. But the real innovation is that we must change the process,"
Wolfram said, adding that many of the dire predictions for RFID have
been based on a lack of comprehension. "People have minor understanding
[of] what RFID really means in a retail environment," Wolfram said.
"Even the IT management does not have the knowledge, they don't see the
potential. Therefore, they answer very pessimistically about RFID."
What about unenthusiastic suppliers that seem to be doing the
bare minimum to be RFID-compliant? "We also have these kinds of
suppliers. We have to educate them and we have to push them harder,"
Wolfram said, adding that there are going to be strict requirements for
things such as advanced ship notices. "We will punish those in the
future" who do not cooperate.
Metro will be using Intermec RFID starter packs along with Reva Systems' Tag Acquisition Processor products.
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