Rfid Metro Group

RFID at METRO

1. Examine the various activities in the process flow in Metro's supply chain. Identify how the implementation of RFID at the pallet‐level and at the case‐level would lead to an improvement in process flow.

Metro Group is Germany’s largest retailer with sales of €56.4 Billion in 2006. It has 2300 locations in 30 countries and 250,000 employees. It has 6 independent retail formats – Wholesale, Hypermarkets, Supermarkets, Consumer Electronics, Building Materials and Department Stores. With such large retail operations Radio Frequency Identification (RFID) tagging system provides significant advantages in their retail supply chain. Some of the key benefits that RFID provides are – Reduce shrink, Improve On-shelf Availability, Improve Planogram-Promotion Compliance, Increase Productivity and Labor Efficiencies. The objective is to now determine if Metro Group should implement RFID system and on what level should implementation be (pallet versus case).

Metro Group’s supply chain on a high level works in three parts. The manufacturers ships their pallets (60-80 cases) to the Distribution Centers where Metro group receives in trucks (33-36 pallets) and stores them. Subsequently, these are then picked and shipped to the Extra stores. Each of the parts have a series of activities and RFID tagging implementation can help improve the process. The activities in the process flow in Metro’s Supply chain as of without the implementation of RFID and then the crossed out activities represent the process changes RFID implementation can bring about by removing the need of those activities and automating them.

1) Manufacturer’s truck loading process: Automating this process by the use of RFID and sending the list to the Head Quarters for verification when received at Metro’s DC. Since this activity was done manually earlier and was very labor intensive, having it done by RFID saves a lot of labor costs and time.

2) Metro group Distribution Center: Previously, the cases from a mixed pallet were picked manually and needed employees to enter information manually. Case level tagging helps improve the picking of mixed pallet as manual work is removed thereby saving time and reducing errors. Subsequently, this improves store performance by having better inventory, lesser discarding and decreased stock outs.

3) Stores re-stocking shelves: Case tagging can help improve the process of re-stocking of products on the shelves in the stores. Previously, this had to be done manually but now with the data from RFID in the storeroom and point-of-sale data can accurately predict when products need to be shelved.

RFID Tagging at both pallet and case levels has its benefits in each case. The below is a summary of benefits in each case