The world's fourth largest retailer will soon require that all pallets shipped to 180 locations in Germany be equipped with RFID tags using EPCglobal's second-generation Electronic Product Code standard.
RFID technology is helping to transform logistics by providing a means of tracking and tracingindividual products throughout the supply chain.
Regulations on traceability and mandates from such giant retailers as Wal-Mart and Metro are slowing forcing processors to make investments in the technology.
Christian Maas, a Metro spokesperson, told FoodProductionDaily.com that the company's RFID plans were communicated to about 650 suppliers at a recent meeting in Düsseldorf.
Members of the company's management board and several RFID experts explained plans for the further roll-out of the technology.
The RFID roll-out of the Metro Group will remain concentrated on Germany.
In 2007 all Metro Cash & Carry stores as well as about 100 real hypermarkets will be equipped with RFID portals in the goods entrance section, he said.
At first, the company asks its suppliers to participate in the electronic data interchange (DESADV/NVE) technology.
The next step is the use of RFID at the pallet level, he said.
"Suppliers doing without the innovative technology will bear the higher process costs resulting from a lower efficiency," he said.
"Suppliers participating in the RFID roll-out will benefit from a preferred treatment."
The company will integrate RFID and other logistics technologies at the annual meeting with its suppliers at the end of 2007.
The group has produced guidelines for suppliers, which explain the necessary steps for implementating RFID.
The company also has a special members section for suppliers at its website, which serves as information platforms.
The company started international tests in 2006 through pilot projects concentrating on the supply chain between Hong Kong and Germany.
"It is our goal to evaluate how RFID can optimize efficiency and transparency in the worldwide flow of goods," he said.
Earlier this year Metro said RFID tests at one of its distribution centresa in Germany has achieved read rates of close to 99 per cent.
Checkpoint Systems, an RFID manufacturer, said the trials were supervised by the European Telecommunications Standards Institute (ETSI) and were conducted at Metro Group's distribution centres near Hamm, Germany.
The trials were designed to improve RFID tag read performance in high-density reader situations.
Metro had sales of €55.7bn in 2005.
RFID uses a wireless system that helps enterprises track products, parts, expensive items and temperature-and time-sensitive goods.
Transponders, or RFID tags, are attached to objects.
The tagwill identify itself when it detects a signal from a reader that emits a radio frequency transmission.
Each RFID tag carries information on it such as a serial number, model number, colour, place ofassembly or other types of data.
When these tags pass through a field generated by a compatiblereader, they transmit this information back to the reader, thereby identifying the object.
According to Venture Development Corporation the worldwide market for RFID systems was $2.3bn in 2006, with hardware accounting for nearly 59 per cent of sales.
EPCglobal standards set out the device and software interfaces for gathering supply chain data.
It provides users with a single way to capture and share information with supply chain partners, even though they may be using different devices and software to read RFID tags.
The royalty-free standards are the foundations in the continuing construction of a global supply chain information network that combines RFID technology, existing communications network infrastructure and EPC, a number for uniquely identifying an item.