Rfid at the Metro Group

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RFID at the Metro Group Mierdorf and Wolfram are preparing their report to the RFID steering committee next month and they have three options to recommend. They can: * Expand the scope of the current pallet level RFID rollout * Move to case level RFID tagging with the manufacturers currently engaged in pallet level rollout * Stop the expansion of the RFID and focus on traditional process improvement opportunities Given the facts in the case and as outlined in more detail in this case study, it is our recommendation that Mierdorf and Wolfram move to the case level RFID tagging process. The improvements up and down the supply chain in accuracy, inventory control, reduced labor costs are enough to at least continue with the RFID…show more content…
In addition, Metro estimated that with the increased accuracy of the cases shipped to the stores it would greatly reduce if not eliminate the need to send product back to the DC or worse, throw it out. Another beneficiary of the RFID tagging at the case level would be restocking at the stores. Due to the lag between products being received in the stock room in the mornings and the sales floor being restocked at night, the chances that the store would be under stocked were great. Using an RFID reader in conjunction with point of sale data, the store personnel would easily track inventory levels and restock more efficiently. The restocking efficiency was estimated to boost gross sales by .05% which would result in an increase in gross profit of €.05 per additional product sold. Financial Benefits The details and comprehensive analytics are within attachment #1. The attachment describes three main topics: 1. Hardware, Software, and Maintenance Expenditures 2. Pallet RFID Program Analysis 3. Case RFID Program Analysis Within those analytics it provides much of the detail analysis that supports our recommendation. We will provide the following highlights; Hardware, Software and Maintenance Costs, Productivity and Shrinkage Savings, and NPV/IRR calculations. Initial
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