METRO Group RFID Roll-out

October 2005

Scott Medford, Vice President - RFID

Intermec Technologies Corporation

for

Dr. Gerd Wolfram

Managing Director MGI

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METRO AG 2005

January: Founding of the METRO Group Future Store Initiative

April: Opening of the Extra Future Store, Rheinberg

November: EPCglobal replaces Auto-ID center

2000 2003 2004 2005

January: Announcement of RFID rollout at NRF, NY

May: 1st METRO Group RFID congress for suppliers, Cologne

July: Opening of the METRO Group RFID Innovation Center, Neuss

November: Start of RFID roll-out, 1st phase

RFID at METRO Group – A Success Story

January: 100-days balance of the RFID roll-out at the NRF, NY

June: 2nd METRO Group RFID congress for suppliers, Cologne

End of 2005: Start of RFID roll-out, 2nd phase

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METRO Group Future Store Initiative

IBM INTEL SAP T-SYSTEMS

CISCO SYSTEMS COCA-COLA DHL SOLUTIONS HENKEL HEWLETT-PACKARD JOHNSON & JOHNSON KRAFT FOODS L‘ORÉAL LOYALTY PARTNER MICROSOFT NESTLÉ ORACLE

PHILIPS PIRONET NDH PROCTER & GAMBLE SATO SYMBOL TECHNOLOGIES TRICON VISA WINCOR NIXDORF X-IDENT

ADT DEUTSCHLAND ALGOTEC ALPHA TONTRÄGER AVERY DENNISON BIZERBA BOSTON CONSULTING GROUP CHECKPOINT SYSTEMS CHEP EYCKELER & MALT FEIG ELECTRONIC FUJITSU SIEMENS COMPUTERS GILLETTE HINTZPETER & PARTNER INTERMEC KURT SALMON ASSOCIATES LIEBHERR LOGOPAK SYSTEME METTLER TOLEDO MULTIQ NCR OAT SYSTEMS ONLINE SOFTWARE PAXAR SIEMENS BUSINESS SERVICES SONOPRESS TOMRA TOSHIBA TECUPM RAFSEC WANZL WMS ZEBRA

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METRO AG 2005

Our Vision: RFID along the complete supply chain

Production

Storage

Loading

Order picking/additional merchandise

Delivery notification (DESADV)Incoming merchandise

Incoming merchandise - precise verificationReserve area

Outgoing merchandise

Incoming merchandise

Inventory management

Shelving

Shelf management

Manufacturer Distribution Warehouse Store/Outlet

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METRO AG 2005

Started November 2004 with around 20 industry partners, as well as selected warehouses, stores and branches of the METRO Group

Launch of the roll-out

Incoming/outgoing goods, inventory replenishment, automatic reconciliation

Logistical units (pallets) and retail units (boxes)

Individual items are not included in the RFID roll-out

RFID transponders

on...

Focus of theroll-out

METRO Group RFID-Roll-out

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METRO AG 2005

Phase 1: Participation of three METRO Group sales divisions since November 2004

Galeria Kaufhof

Apparel/Textiles

3 Suppliers 5 DCs

Real

Grocery

12 Suppliers 11 Stores 3 DCs

Metro Cash & Carry

Grocery, General Merchandise

20 Suppliers 2 Stores 1 DC

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Suppliers involved today

DR. OETKER NESTLÉ MILASAN MAGGI PAPSTAR 3M FABER CASTELL JOHNSON & JOHNSON 3M SCOTCH GILLETTE GLAXOSMITHKLINE SCHWARZKOPF & HENKEL LEVER FABERGÉ TRIUMPH GERRY WEBER ESPRIT PAPSTAR KRAFT SARA LEE PAPSTAR TIP GILLETTE BRAUN HAKLE KIMBERLY SCA

Suppliers involved Q2/3 2005

NESTLE PURINA HENKEL WASCHMITTEL COLGATE PALMOLIVE UNILEVER BESTFOODS SCHWARTAU MELITTA MEDION BEIERSDORF FUJITSU SIEMENS MATTEL BOSCH SIEMENS HAUSGERÄTE WAGNER PIZZA FREIBERGER L‘OREAL INTERUNION

With availability of GEN 2 about 100 suppliers

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METRO AG 2005

RFID Rollout Still a long way to go

3Distribution Lines

111RFID Gates

26Supplier

879.979EPC Reads

82.800Items

79.100Cases

218.108Pallets

METROGroup

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Standard rollout portal setup

Motion Sensor

4 antennas

Reader

Light stack

Metal protection

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METRO AG 2005

Extra Rheinberg

14 Check Out

9 Exit Gates

4 Portals (e.g. Trash Door)

1 Standalone PCCustomer Information

RFID Server (Rack)

RFID Controller for Check Out and Gates

to SAP SII

2 Entry Gates

Eth. Switch

Standalone PC

Extra Rheinberg

14 Check Out

9 Exit Gates

4 Portals (e.g. Trash Door)

1 Standalone PCCustomer Information

RFID Server (Rack)

RFID Controller for Check Out and Gates

to SAP SII

2 Entry Gates

Standalone PC

14 Check Out

9 Exit Gates

4 Portals (e.g. Trash Door)

1 Standalone PCCustomer Information

to SAP SII

2 Entry Gates

Ethernet Switch

Standalone PC

DC EssenDC EssenDC Essen1 Portal (Dock Door)

Standalone PC1 Standalone PCDC Packing

1 Portal (Dock Door)

Standalone PC1 Standalone PCDC Packing

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METRO AG 2005

Pallet-level roll-out: instant data processing and verification

Reading initiated by motion detector

Tag Data (SSCC) transmitted to

decentralized edge node server via LAN

network

SSCC sent to Central Server; Matched with EDI

data from the Merchandise

Management Systems

"Green light" if Serial Shipping

Container Code matches data from

Merchandise Manage-ment Systems

321 4

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100 days of RFID – High reading accuracy in first trials

Hanger goods conveyor:

99%

Portal for incoming and

outgoing goods:

Varying results,up to 99%

Returnable transport items:

> 90%

Stackable goods conveyor:

99%

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100 days of RFID – Technical challenges

Installation and Optimi-zation of different setups for various transportation modes depending on product group (i.e. hanger goods conveyor, portal for incoming and outgoing goods)

Integration of different backend systems

Process improvement: matching of motion

detectors and readers reader configuration tag is damaged,

wrongly attached or missing

DESADV too late/missing

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METRO AG 2005

NEXT Steps

Enhancement of suppliers and locations

Enhancement of RFID based processes (e.g. frontstore – backstore separation, RFID equipped forklifts, etc.)

Start with case level tagging

prerequisite for all further rollout activities is the availability of Gen 2 products

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METRO AG 2005

Expected improvements of Gen 2 by end users

Worldwide standard Price decline for RFID labels Use the RFID advantages in global supply

chains Increasing investment safety

Better performance Longer read ranges Higher anti collission (about 600 Tags in a

sec.)

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METRO AG 2005

Efficiency Range CostSecurityReliabilitySpeed

User Requirements

Dense reader installation

Global unlicensed operation

Minimal interference

Up to 5 meter range

Synchronized Timing

Write protection

Tag kill

Secure forward link

Data cloaking

Verified write

Error correction in air interface

Wide operating temperature

Eliminate ghost tags

Many tags and late tags

Fast singulated write

Tag select by data filter

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METRO AG 2005

ISO 18000 and EPC Gen 2

On track toward ISO standard

ISO and EPC numbering system conflict resolved

One bit (bit 17 of PC bits) defines whether EPC or ISO (AFIs)

EPC UHF Gen 2 v 1.0.9 submitted to ISO SC 31/WG 4/SG 3 on January 25

Proposed as amendment to ISO 18000-6C

Should be an ISO standard in early 2006

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METRO AG 2005

Metro / Intermec next steps

Innovation Center

Gen2 performance tests

EN 302 208

future store

Update of existing infrastructure

RFID roll out

Full commitment to support the Metro Solution Team

EN 302 208 and Gen2

Multi Protocol environment

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METRO Group – Experience the future of retailing with the third largest retailer in the world

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