METRO Group to Introduce RFID Across Process Chain

METRO Group to Introduce RFID Across the Company

First Use of RFID Technology Along The Entire Process Chain

Comprehensive Pilot Project to Kick Off With 100 Suppliers, 10 Central Warehouses and Approximately 250 Stores

New York, NY, USA. January 12, 2003.

METRO Group, the world's fifth-largest retailing company, will begin using RFID technology (Radio Frequency Identification) throughout its entire process chain. Beginning in November 2004, approximately 100 suppliers initially will affix RFID tags to their pallets and transport packages for delivery to ten central warehouses and around 250 stores within the METRO Group's sales divisions Metro Cash & Carry, Real hypermarkets, Extra supermarkets and Galeria Kaufhof department stores.

Tests with the new RFID tags have been successfully conducted over recent months at the METRO Group's Extra Future Store in Rheinberg, Germany, the first project of the METRO Group Future Store Initiative. In Rheinberg, the Initiative tests the use and interaction of a number of new retailing technologies under real-life conditions, with the objective to develop benefit-driven solutions -- both for customers and retailers. To achieve this, RFID technology is of particular importance, as it enables non-contact transmission of product information such as price, manufacturer, expiration date and a product's weight via radio frequency. "In the future, the use of innovative technologies will be one of the crucial competitive factors in our industry. With the Future Store Initiative, the METRO Group will push the modernization of retailing," explains Chairman and CEO of the METRO Group, Dr. Hans-Joachim Korber, at the NRF Retail Conference in New York, the world's premier conferencing event for the retail industry.

Working closely with the METRO Group on the Future Store Initiative are SAP, Intel, IBM and around 40 other leading companies from the IT, consumer goods and service industries. The most recent member to join is Microsoft, which announced its participation in the METRO Group Future Store Initiative at the NRF Conference.

Thus far, the Initiative is only testing RFID in certain areas of the process chain, primarily in warehouse management. RFID technology enables the automatic inspection of incoming goods: Delivery of goods to the Future Store in Rheinberg are fitted with RFID tags in the central warehouse and read in upon arrival at the store. During transport from the store's warehouse to the salesroom, goods are read in again, and identified as "moved to the frontstore." The tests in Rheinberg have shown that RFID offers retailers and their customers enormous advantages: more effective processes and consequently lower costs, which benefits both parties. Using RFID, goods will be able to be located along the entire process chain -- from production all the way through to the shelf in the store. Managing orders can be optimized, losses reduced and out-of-stock situations avoided, assuring an even more consistent availability of goods for the customer.

Utilization of RFID for the first time along the entire process chain is the most sweeping project thus far for the METRO Group Future Store Initiative. It is a multi-stage plan beginning November 2004 that provides for approximately 100 of Metro's suppliers to already outfit all pallets and transport packages with RFID tags in their production facilities for goods bound for ten of the METRO Group's central warehouses. The goods' path from manufacturer to METRO Group's warehouses will thus be recorded using RFID technology. 100 stores from the Real and Extra sales divisions, 122 Galeria Kaufhof department stores, and 59 Metro Cash & Carry wholesale stores in Germany will be receiving RFID-tagged deliveries from these warehouses. To assure a smooth implementation of the project, METRO Group sets up a lab for the suppliers involved. In this lab, the functionality of the RFID technology, e.g., the reading of tags, is being tested.

"We see RFID as one of the crucial technologies for the future of retailing. With our large-scale introduction of RFID, we will for the first time cover the entire process chain with this technology," says Zygmunt Mierdorf, Member of the Management Board and CIO of the METRO Group. "The strongly expanded and mutually supportive cooperation with our suppliers in this area will help to significantly move forward the establishment of international standards for RFID."

"Because of emerging technologies like RFID, retailers everywhere now have the opportunity to rethink their entire supply chain approach," according to Christian Nivoix, General Manager of IBM's Global Distribution Sector. "A cornerstone of this new project is IBM's RFID systems integration expertise and a new RFID laboratory to be created in a programme led by IBM for METRO Group. The laboratory will enable METRO Group and its partners to evaluate the readiness of new technologies for retail and allow suppliers to test their readiness for RFID. METRO Group's groundbreaking Future Store work is proof of how retailers can use e-business on demand to reduce costs, while building customer loyalty."

John Davies, Vice President, Solutions Market Development Group, Intel Corporation, adds: "This announcement is not only about technology and business process -- it is about industry leadership. RFID technology and the EPC standard have the potential not only to make inventory and supply chain management more efficient but to create a new shopping experience for the consumers. This is an inflection point for the retail-consumer goods industry, and Intel is working with METRO Group and the industry in Europe and the U.S., to help drive the architectural design, accelerate the implementation of industry technology standards and provide the compute power for end-to-end solutions."

"The METRO Group's large-scale introduction of this technology into its stores is further proof that RFID is here to stay," says Peter Kirschbauer, Member of the SAP Extended Management Board. "With the help of RFID technology companies can use real-time data and improved data visibility and accuracy to transform their supply chains into adaptive business networks. This level of innovation will be a key factor in maintaining a competitive edge in the future and offering customers the quality of service they have come to expect."

The METRO Group is the world's fifth-largest retailing group. With its powerful brands, the METRO Group operates successfully in 28 different countries around the world - at over 2,300 locations and with almost 240,000 employees. In 2003, the company achieved net sales of euro 53.6 billion. The METRO Group's six sales divisions operate independently on the market with their own specific sales concepts: Metro/Makro Cash & Carry, the world's market leader in self-service wholesaling, Real hypermarkets, Extra supermarkets, Media Markt and Saturn, the leading consumer electronics centers in Europe, Praktiker home improvement and DIY centers, and the department stores of Galeria Kaufhof.

More information and photos at http://www.future-store.org.

Prepared by Robin Cover for The XML Cover Pages archive. See: (1) "Physical Markup Language (PML) for Radio Frequency Identification (RFID)"; (2) "Radio Frequency Identification (RFID) Resources and Readings."

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Beginning in November 2004, approximately 100 suppliers initially will affix RFID tags to their pallets and transport packages for delivery to ten central warehouses and around 250 stores within the METRO Group's sales divisions Metro Cash & Carry, Real hypermarkets, Extra supermarkets and Galeria Kaufhof department stores. Tests with the new RFID tags have been successfully conducted over recent months at the METRO Group's Extra Future Store in Rheinberg, Germany, the first project of the METRO Group Future Store Initiative. In Rheinberg, the Initiative tests the use and interaction of a number of new retailing technologies under real-life conditions, with the objective to develop benefit-driven solutions -- both for customers and retailers. To achieve this, RFID technology is of particular importance, as it enables non-contact transmission of product information such as price, manufacturer, expiration date and a product's weight via radio frequency. "In the future, the use of innovative technologies will be one of the crucial competitive factors in our industry. With the Future Store Initiative, the METRO Group will push the modernization of retailing," explains Chairman and CEO of the METRO Group, Dr. Hans-Joachim Korber, at the NRF Retail Conference in New York, the world's premier conferencing event for the retail industry. Working closely with the METRO Group on the Future Store Initiative are SAP, Intel, IBM and around 40 other leading companies from the IT, consumer goods and service industries. The most recent member to join is Microsoft, which announced its participation in the METRO Group Future Store Initiative at the NRF Conference. Thus far, the Initiative is only testing RFID in certain areas of the process chain, primarily in warehouse management. RFID technology enables the automatic inspection of incoming goods: Delivery of goods to the Future Store in Rheinberg are fitted with RFID tags in the central warehouse and read in upon arrival at the store. During transport from the store's warehouse to the salesroom, goods are read in again, and identified as "moved to the frontstore." The tests in Rheinberg have shown that RFID offers retailers and their customers enormous advantages: more effective processes and consequently lower costs, which benefits both parties. Using RFID, goods will be able to be located along the entire process chain -- from production all the way through to the shelf in the store. Managing orders can be optimized, losses reduced and out-of-stock situations avoided, assuring an even more consistent availability of goods for the customer. Utilization of RFID for the first time along the entire process chain is the most sweeping project thus far for the METRO Group Future Store Initiative. It is a multi-stage plan beginning November 2004 that provides for approximately 100 of Metro's suppliers to already outfit all pallets and transport packages with RFID tags in their production facilities for goods bound for ten of the METRO Group's central warehouses. The goods' path from manufacturer to METRO Group's warehouses will thus be recorded using RFID technology. 100 stores from the Real and Extra sales divisions, 122 Galeria Kaufhof department stores, and 59 Metro Cash & Carry wholesale stores in Germany will be receiving RFID-tagged deliveries from these warehouses. To assure a smooth implementation of the project, METRO Group sets up a lab for the suppliers involved. In this lab, the functionality of the RFID technology, e.g., the reading of tags, is being tested. "We see RFID as one of the crucial technologies for the future of retailing. With our large-scale introduction of RFID, we will for the first time cover the entire process chain with this technology," says Zygmunt Mierdorf, Member of the Management Board and CIO of the METRO Group. "The strongly expanded and mutually supportive cooperation with our suppliers in this area will help to significantly move forward the establishment of international standards for RFID." "Because of emerging technologies like RFID, retailers everywhere now have the opportunity to rethink their entire supply chain approach," according to Christian Nivoix, General Manager of IBM's Global Distribution Sector. "A cornerstone of this new project is IBM's RFID systems integration expertise and a new RFID laboratory to be created in a programme led by IBM for METRO Group. The laboratory will enable METRO Group and its partners to evaluate the readiness of new technologies for retail and allow suppliers to test their readiness for RFID. METRO Group's groundbreaking Future Store work is proof of how retailers can use e-business on demand to reduce costs, while building customer loyalty." John Davies, Vice President, Solutions Market Development Group, Intel Corporation, adds: "This announcement is not only about technology and business process -- it is about industry leadership. RFID technology and the EPC standard have the potential not only to make inventory and supply chain management more efficient but to create a new shopping experience for the consumers. This is an inflection point for the retail-consumer goods industry, and Intel is working with METRO Group and the industry in Europe and the U.S., to help drive the architectural design, accelerate the implementation of industry technology standards and provide the compute power for end-to-end solutions." "The METRO Group's large-scale introduction of this technology into its stores is further proof that RFID is here to stay," says Peter Kirschbauer, Member of the SAP Extended Management Board. "With the help of RFID technology companies can use real-time data and improved data visibility and accuracy to transform their supply chains into adaptive business networks. This level of innovation will be a key factor in maintaining a competitive edge in the future and offering customers the quality of service they have come to expect." The METRO Group is the world's fifth-largest retailing group. With its powerful brands, the METRO Group operates successfully in 28 different countries around the world - at over 2,300 locations and with almost 240,000 employees. In 2003, the company achieved net sales of euro 53.6 billion. The METRO Group's six sales divisions operate independently on the market with their own specific sales concepts: Metro/Makro Cash & Carry, the world's market leader in self-service wholesaling, Real hypermarkets, Extra supermarkets, Media Markt and Saturn, the leading consumer electronics centers in Europe, Praktiker home improvement and DIY centers, and the department stores of Galeria Kaufhof. More information and photos at http://www.future-store.org. Prepared by Robin Cover for The XML Cover Pages archive. See: (1) "Physical Markup Language (PML) for Radio Frequency Identification (RFID)"; (2) "Radio Frequency Identification (RFID) Resources and Readings."