Rfid Case Analysis (It)

The Metro Group identified RFID technology as a means to maintain its competitive advantage as the world’s third-largest retailer. As Metro prepared to gradually apply RFID to its supply chain on the pallet level, Metro identified system and process requirements, installed RFID readers and associated infrastructure, developed middleware to interface with the reader and enterprise applications, convinced suppliers to utilize this technology, and trained its employees for the process changes. Metro also opened an Innovation Center to facilitate training and knowledge sharing.

While these exhaustive preparations were not enough to ensure there were no problems, they allowed Metro to identify potential process problems and address them before implementing this technology on a larger scale. Metro discovered problems related to human error, technology functionality, and employee training. For instance, suppliers forgot to put tags on the right side of pallets; metro could not read tags of low quality or with the wrong frequency that suppliers often used, and there were connectivity issues with the middleware. However, as soon as 2005, Metro began realizing benefits. The process of checking in and loading trucks arriving at the DCs and stores were 15 to 20 minutes faster, incomplete shipments were identified instantly, and inventory data accuracy improved. The careful implementation of pallet-level tagging and resolution of various problems will provide valuable information on how to ensure a smoother implementation of case-level tagging.

After careful analysis of Metro’s approach to implementing RFID, I strongly suggest that Metro moves to initiate case-level tagging with the manufacturers currently engaged in the pallet level rollout. Case level tagging would have significant financial benefits and provide data to further improve performance. By the fifth year of implementation, total profits would increase $8,978,662,495 as a result of increased labor...