Metro is extending RFID to cases and cartons

German retailer Metro is planning to start applying radio frequency identification (RFID) tags, with improved performance and capability, to cartons and cases in the fourth quarter of 2005. Metro and its industry partners, including Kraft Foods, have been delivering pallets and hanger goods equipped with smart chips since November 2004. By January 2006, Metro Group plans to have 300 suppliers sending RFID-tagged pallets and cases to its distribution centers. Research is also being done with single-item tagging and temperature-enabled RFID tags, although any implementation of these systems is likely to be a long way off. As far as retailers are concerned, their primary motivation is building customer loyalty and trust. In driving through these traceability measures down the supply chain, they are attempting to put into place guarantees that if there is ever a recall, then any problem could be contained quickly without losing credibility. A study conducted by consultants at Kurt Salmon Associates in the Metro Group's Future Store showed that the availability of goods increased significantly as a result of RFID. Out-of-stock-situations fell by between 9 per cent and 14 per cent. The waste of goods was also reduced by up to 18 per cent. Nonetheless, as the Metro roll-out suggests, it seems inevitable that RFID will extend from being primarily a supplier-based technology to being embracing fully by every aspect of the food supply chain. The potential benefits in terms of traceability and complete supply chain integration are enormous.