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Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
Microsoft PowerPoint - C_Gerd_METRO_RFID
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Microsoft PowerPoint - C_Gerd_METRO_RFID

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  • 1. RFID in the Supply Chain: METRO Group`s Experiences Dr. Gerd Wolfram Executive Project Manager METRO Group Future Store Initiative „RFID Innovations and Values“ Symposium, November 18th 2005, Stanford Business School © METRO AG 2004
  • 2. Content 1 Objectives of the project 2 RFID in the Supply Chain: Experiences 3 Business Case: A Retailer`s perspective 4 Next steps: The Roll-out 1 © METRO AG 2004
  • 3. METRO Group – One of the World‘s largest Retail Groups Management Holding METRO AG Nonfood Cash & Carry Food Retailing Consumer Outlets Department Stores Cross-divisional Service Companies 2 © METRO AG 2004
  • 4. The METRO Group Future Store Initiative – Benefiting Retailing and Consumers Cooperation procject of METRO Group with SAP, Intel and IBM with integration of further partners especially from the consumer goods and information technology industries. The initiative provides a platform for technical and process-related developments and innovations in retailing. The initiative sets standards for the retail trade of the future 3 © METRO AG 2004
  • 5. Partner companies – Jointly Elaborating Visions METRO GROUP SAP INTEL IBM CISCO SYSTEMS COCA-COLA DHL SOLUTIONS GILLETTE HENKEL HEWLETT-PACKARD JOHNSON & JOHNSON KRAFT FOODS L‘ORÉAL MICROSOFT NESTLÉ ORACLE PHILIPS PIRONET NDH PROCTER & GAMBLE SATO SYMBOL TECHNOLOGIES VISA WINCOR NIXDORF ADT ALGOTEC ALPHA TONTRÄGER AVERY DENNISON BIZERBA BOSTON CONSULTING GROUP CHECKPOINT SYSTEMS CHEP CITTADINO EYCKELER & MALT FEIG ELECTRONIC FUJITSU SIEMENS COMPUTERS HINTZPETER & PARTNER INTERMEC KURT SALMON ASSOCIATES LIEBHERR LOYALTY PARTNER METTLER TOLEDO MULTIQ NCR OATSYSTEMS ONLINE SOFTWARE SIEMENS BUSINESS SERVICES SONOPRESS 4 WANZL WMS ZEBRA © METRO AG 2004
  • 6. The Extra Future Store – Testlab of the Initiative Extra Future Store in Rheinberg: Application and combination of a wide range of technologies in retailing Test under real-world conditions Testing acceptance of customers Ca. 4.000 square meters sales and storage area Ca. 3.000 customers per day Increase of the customer frequency (+ 20 %) 15.000 visitors since the reopening of the store 5 © METRO AG 2004
  • 7. Innovative Technologies in the Joint Testing Laboratory Comfort Smart Shopping Check-out Infrastructure WLAN Server Content Bus RFID Inventory In-store Management Information 6 © METRO AG 2004
  • 8. Content 1 Objectives of the project 2 RFID in the Supply Chain: Experiences 3 Business Case: A Retailer’s perspective 4 Next steps: The Roll-out 7 © METRO AG 2004
  • 9. RFID – Base Technology of the Future Store Technology allowing to read special labels applied to products and packaging via radio signal The RFID label can store more Benefits for warehousing, information than conventional quality assurance and category barcode labels management RFID labels can be read in any Work volume and error rate in given number from a distance of up merchandize entry are reduced to one meter Full tracking of the merchandize Problems in the supply chain from the manufacturer through to can be detected and solved 8 the Extra Future Store early on © METRO AG 2004
  • 10. Gaining Knowledge and Experience – RFID-Tests in the METRO Group Future Store Initiative Learning how to use RFID-technology Learning about requirements, process changes, benefits in a real life-environment 3-Step-Approach Technical Field Trial Business Case Supply Chain Practice Test 9 © METRO AG 2004
  • 11. Tests on Pallet and Case Level Preparation of RFID- RFID-Transponder RFID-Reader Transponder on cartons and pallets 10 © METRO AG 2004
  • 12. RFID Data Management Merchandize Flow Writing the Tags Exit and Entrance Portal In-Store Portal I II IV III SAP Future Store Application Network System Delivery Monitor 11 © METRO AG 2004
  • 13. SAP Portal – Tracking and Tracing complete tracking control 12 © METRO AG 2004
  • 14. Smart Shelf – Inventory Management in Real-Time 13 © METRO AG 2004
  • 15. Content 1 Objectives of the project 2 RFID in the Supply Chain: Experiences 3 Business Case: A Retailer’s perspective 4 Next Steps: The Roll-out 14 © METRO AG 2004
  • 16. RFID potential analysis: Project procedure Market indicators Process RFID KSA best analysis potential practices Interviews with Suitability of Roll-out individual industry partners options categories 15 © METRO AG 2004
  • 17. RFID in the Extra Future Store – Efficiency analysis with Kurt Salmon Associates Automatic control Production Transponders are and entry into the VI Automatic sorting, I V merchandise counting and control Manufacturer affixed during production management system Warehouse III Automatic control of outgoing shipments VII Automatic control of shipments II Products are loaded in boxes and consigned on pallets IV Truck control to avoid theft VIII Tracking of merchandise 9 Availability and movements from store 16 theft control warehouse to point of sale © METRO AG 2004
  • 18. Project results The RFID potential estimates are based on 3 main areas of benefits I Process efficency – based on a detailed III Product availability – based on the root analysis of store processes causes of OOS 1– 2 – Backroom Assortment stock management monitoring 3– Out of Organisation of shelf repl.t Shelf 4 – Accuracy 5 – Accuracy of order of forecasts proposal II Theft reduction – based on estimates of causes of shrink and theft Shrink All estimates are based on Future Theft by Theft by Other staff shopper Store measured data and/or KSA industry knowledge Back- Sales Back- Sales 17 room floor room floor © METRO AG 2004
  • 19. Process efficiency: Detailed analyses Fresh Dairy Fruit & Frozen Dry & spirits Non-food Bever- prod.'s prod.'s veg.'s foods N P N P ages # of pallets 29.5 18 36 21 50 10 8.5 15 45 Supply chain* Industry partners 29.5 18 36 21 50 7 3 1.5 1 45 METRO 7 14 Group warehouse 18 21 50 3 1.5 1 Incoming merchan- dise 5 2 5 15 12 Store Store warehouse 29.5 13 36 21 48 5 8.5 33 1 5 24 3 6 5 1 15 7 1.5 Point of sale Activity Pallets stored less than 12 hours Storage for longer than 12 hours N: Normal, P: Promotion-based: KSA store surveys, Dec. 2003 – typical number of pallets per week 18 (*) Supply chain not included in the extent of the project © METRO AG 2004
  • 20. Process efficiency: Leaner and faster processes Less time required for control of incoming Incoming merchandise merchandise Lower costs for returns Quicker retrieval of stored products Store warehouse Updated and immediate information on store warehouse inventories Automatic control of incoming merchandise at the Point of sale point of sale Correct shelf placement of the products 19 © METRO AG 2004
  • 21. Merchandise availability: Potential benefits due to RFID Current situation Expected benefit Only random sample tests Individual and systematic Accuracy of received control merchandise Visibility of store Poor/no control of store Control of inventories through warehouse inventories automatic scans of incoming warehouse inventory and outgoing merchandise Replenishment at the No system information on Real-time shelf stock-out point of sale shelf stock-outs warnings Compliance with Insufficient knowledge of Automatic control of planograms space management plans planogram compliance Loss of time through product Automatic tracking of Locating products relocation misplaced products 20 © METRO AG 2004
  • 22. RFID at the retail unit: Significant improvements are possible Retail unit Shelving 12 to 17% Incoming merchandise Process (Incoming efficiency merchandise and shelving) 11% to 18% Potential (depending on the Loss/theft merchandise category) Merchandise 9% to 14% availability (reduction of OOS) 21 Log. unit Retail unit Item © METRO AG 2004
  • 23. Consequences of stock-outs: Significantly larger for industry than for trading companies Shelf stock-out* Trading companies Industry partners 50% 65% Substitutions No purchase 22 * KSA project experience © METRO AG 2004
  • 24. RFID use at the log. unit/retail unit: 1/3 of total potential* RFID potential Consequence Log. unit/ retail unit Total Extent 35% supply chain Benefit Significant Market processes, Product Potential also those 65% independent of RFID *Level of benefit also dependent on supply (supplier/direct), incoming merchandise control, forecasting system 23 © METRO AG 2004
  • 25. Benefit for industry and trading companies: Potential in many different areas I Supply chain and production efficiency VI Management recycling processes II Reduction of Supply chain stock-outs VI Efficiency of III Fight against after-sales services After- brand piracy sale Stores IV Reduction of V Improvement of losses product availability 24 © METRO AG 2004
  • 26. RFID Benefits: Both METRO Group and Industry Benefit for Joint Benefit for retail benefit areas industry Potential Potential Potential RFID kick off Supply RFID chain readiness maturity Supplier business case Design of RFID strategy RFID strategy More efficient Greater merchandise Requirement of processes availability manufacturer analyses 25 © METRO AG 2004
  • 27. Content 1 Objectives of the project 2 RFID in the Supply Chain: Experiences 3 Business Case: A Retailer’s perspective 4 Next Steps: The Roll-out 26 © METRO AG 2004
  • 28. Going live: The METRO Group RFID Roll-out Starting November 2004 with Launch of the around 20 industry partners, as well roll-out as selected warehouses, stores and branches of the METRO Group Incoming/outgoing goods, inventory Focus of the replenishment, automatic roll-out reconciliation Logistical units (pallets) and retail RFID units (boxes) transponders Individual items are not included in on... the RFID roll-out 27 © METRO AG 2004
  • 29. Focus on logistic units and trade units Number of suppliers Logistis unit Trade units Items (pallets) (boxes, sub-boxes) Today Phase 1 Phase 2 Phase 3 Later November 2004 July 2005 January 2006 Initially, RFID transponders for the individual items will be excluded from the roll-out 28 © METRO AG 2004
  • 30. The METRO Group RFID Roll-out is Reality! Metro Cash & Carry, Neuss Kaufhof, Neuss Real, Ratingen 29 © METRO AG 2004
  • 31. Vision: The Use of RFID along the Supply Chain Distribution warehouse Outgoing merchandise Order picking/additional merchandise Reserve area Incoming merchandise – precise verification Incoming merchandise Delivery notification (DESADV) Store/Branch Manufacturer Shelf management Shelving Production Inventory management Storage Incoming merchandise 30 Loading © METRO AG 2004
  • 32. Our vision: The network organization Adjust the Determine organization to the new advanced requirements retailing strategy Market Suppliers research Logistics Cross-sectional provider Customer companies Com- Develop plement Service Sales priorities advanced provider divisions retailing Improve roll-out 31 © METRO AG 2004
  • 33. The METRO Group Future Store Initiative Experience the innovative technologies in the Extra Future Store in Rheinberg ... Extra Future Store Moerser Straße 28 47495 Rheinberg Germany Phone +49 (0) 28 43 - 90 16 82 Fax +49 (0) 28 43 - 90 76 87 8 Or visit our websites! www.future-store.org www.metrogroup.de 32 © METRO AG 2004
  • 34. METRO Group Future Store Initiative Experiencing the Future of Retailing Thank you ! © METRO AG 2004

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