Ashutosh Singh (4018/20)

RFID at the METRO Group

Some of the major benefits of RFID (Radio frequency Identification) technology are-
a. Reducing Shrink in the supply chain.
b. Improving on-shelf availability and reducing out-of-stocks.
c. Improving Planogram and Promotion compliance.
d. Productivity and labor efficiencies.
RFID technology is basically a new technology, and still under growth, with lots of
potential. It can provide a basket of benefits, as written above to various verticals of
industry. Lots of innovation still is required for this technology to achieve a maximum
level, so that it can provide us with maximum benefits. Not investing in RFID technology
because it is not mature enough is not at all a good idea. This technology with proper
applications can create a revolution in Retail market. Companies which are using RFID
technology are having an edge over others, and in the near future this benefit edge will
increase three folds. Some of the potential benefits in Metros grocery supply chain are-
a. Using Pallet-Level tagging to improve truck loading Process at the manufacturers
warehouse.
b. Using case-level tagging to improve mixed- Pallet Picking at Metro DCs.
c. Using case-level tagging to Improve Shelf Restocking at stores.
RFID technology is currently in development phase, and standards for its usage are still
under construction. Metro can do a detail analysis at this level and list out the benefits as
well as cons of this technology. The detailed research done will bring down the cost of the
RFID tags, and hence the companies will become more and more interested in this
technology, when they will see its benefits. Hence, Metro is right in investing in this
technology.
Barcodes have some major weaknesses which can be solved by the usage of RFID. Few of
the weaknesses of using barcodes are-
a. Security - Barcode can easily be duplicated so security is an issue. Contrast to this,
RFID is very difficult to replicate and thus can be used in few of the costlier items.
b. Difficulty to read the bar codes - Individual checking of barcodes requires
intervention of people which makes it costly as well as time consuming. Contrast
to this, RFID can be read very easily, need not be from a particular direction and
there are tags which can be read from just passing under a scanning machine, thus
Ashutosh Singh (4018/20)
enabling automatic tracking of shipments as well as saving lot of time. Thus RFID
plays a major role in Logistics, helping in keeping track of the material.
c. Information that can be stored in bar codes is very limited. It can store only a few
basic information. E.g. all products of same type have same barcode. In contrast to
this RFID tags have a detailed information of each and every item. RFID tag can
have different values for different items of same type and it can also be tracked.
Thus products with RFID tags can easily be tracked and information can be
gathered.
d. Major advantage of RFID is in logistics where shipments can be automatically
tracked and monitored. Thus a company can know through which route the
product goes during its life cycle, and thus can deduce the further plan accordingly.
Theft can easily be tracked. While Barcodes cant be used for tracking purposes.
e. Barcodes can easily be damaged, while RFID tags are much more secure in this
aspect.
f. RFID usage can lead to attaining higher levels of automation, thus selling of
products will become easier in the future. This is not possible in case of Barcodes.
g. Inventory management Through the use of real time data, inventory
management becomes easier when using RFID tags.
h. Cost Effective Management of shelf space can be done through the usage of RFID
tags.
RFID tags cannot be replaced by barcodes even with technological advances, because
RFID tags feature a lot of advantages over Barcodes.
As a METROs competitor I would try to suppress the advantage that Metro possess
through the introduction of this new technology. RFID has a lot of potential to rule the
tracking and Retail market, and in the near future can easily expand to other horizons.
Seeing this opportunity I will set up a Research Lab of my own, in my own firm and invest
in this technology, trying to gain insights on what areas this technology can benefit. But
my major goal will be to target Retail market, how will this technology affect retail sector
(tracking and logistics). I would also try to find out the benefits that customers, and retail
stores will draw from this technology. And when we gather the details on how this
technology is beneficiary, I would try to leverage this market, by setting up concept similar
to Future store started by METRO. Also I would tie hands with a few RFID manufacturers.