Metro Group, IBM lead Europe's largest RFID rollout

Published 16 January 2008

IBM, German retailer Metro Group — the world’s fourth largest retailer — roll out Europe’s largest RFID project, using IBM technology; suppliers from China and Vietnam are already participating; health experts argue that implementing similar systems throughout the food supply chain would improve health and safety and protect consumers from tainted food; business analysts say RFID would increase efficiency and allow better management of inventories

Radio frequency identification (RFID) technology is transforming logistics by providing a means of tracking and tracing individual products throughout the supply chain. Regulations on traceability and mandates from such giant retailers as Wal-Mart and Metro are forcing processors to make investments in the technology. In Europe, Metro Group, the giant German retailer, is leading the charge in collaboration with IBM. The group said earlier this month that in late October it had completed a major step in the operational deployment of RFID in Germany during the second phase rollout. Metro, the world’s fourth largest retailer, labeled the move as the largest RFID project in the European retail sector. The company has so far implemented the system in 180 locations; the rest of its stores will be equipped with the system by the end of the year. Starting from late 2007, about 100 suppliers from China and Vietnam began participating in the RFID pilot project, called Tag it Easy. These suppliers now tag their export packages with RFID transponders. “This way, distinct efficiency gains can also be achieved in the supply chain between Asia and Europe,” Metro stated. Metro first tested RFID with thirty Chinese suppliers in May.

The company offers three tailor-made starter kits to help suppliers move to RFID. Suppliers to Metro Group will pay a financial penalty if they decide not to ship pallets that are tagged with RFID technology.

RFID uses a wireless system that helps enterprises track products, parts, expensive items, and temperature-and time-sensitive goods. Transponders, or RFID tags, are attached to objects. The tag will identify itself when it detects a signal from a reader that emits a radio frequency transmission. Each RFID tag carries information on it such as a serial number, model number, colour, place of assembly, or other types of data. When these tags pass through a field generated by a compatible reader, they transmit this information back to the reader, thereby identifying the object.

According to Venture Development Corporation the world-wide market for RFID systems was $2.3 billion in 2006, with hardware accounting for nearly 59 percent of sales. We mentioned that Metro Group is the world’s fourth largest retailer. Here are more numbers: The group had sales of about €60 billion in 2006; it has 270,000 employees and operates about 2,400 outlets in 31 countries.

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