Retailer METRO Group Selects IBM Traceability Solution to Manage Product Expiration Dates, Get Promotional Items Onto Store Shelves Sooner

Leads Global Retail Industry by Adopting Electronic Product Code Information Services (EPCIS) Standard for Data Management and Sharing With Trading Partners

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ARMONK, NY - 06 Nov 2008: IBM (NYSE: IBM) today announced that METRO Group will be using IBM software as a platform for capturing and managing data on inventory, expiration dates, and other information on meat sold at its real,- Future Store. The software will also be used to help METRO Group suppliers track items associated with special product promotions. In addition to IBM software, these initiatives rely on consulting expertise from IBM Global Business Services.

METRO Group is also using IBM's Radio Frequency Identification (RFID) technology and the EPCIS standard for supply chain tracking enterprise-wide.

"Smart Freezers" for Fresh Meat
At METRO Group's real,- Future Store in Toenisvorst, Germany, the company teamed with IBM for a new quality assurance system in the store's "Master Butchery" department. IBM's InfoSphere Traceablity Server software serves as a repository for all information about the meat -- its expiration date, Electronic Product Code, type, and of course, its provenance, so that meat can be traced in the event of any recalls. A second IBM software product -- WebSphere Premises Server -- captures the RFID data from each meat package.

The IBM software automates the process of identifying items nearing their expiration dates and alerts staff when the store is low on a particular meat item. In the past, these tasks have been performed manually by employees, who visually scanned shelves for items about to expire, and surveyed the freezer frequently to determine which meats needed to be restocked. Using IBM's RFID technology, METRO Group can improve customer satisfaction and boost sales by ensuring that its freezer is stocked with the meats shoppers are looking for.

Getting Hot Items on the Shelves
METRO Group is also working with IBM to allow suppliers using the EPCIS standard to track items destined for the company's real,- stores across Germany. METRO Group's goal is to provide suppliers with visibility into the whereabouts of items targeted for special promotions such as advertising campaigns or tie-ins to sporting events or movies.

The tracking process begins with the supplier, which tags items prior to shipping. The supplier can then track items through shipping, arrival at METRO Group distribution centers, and delivery -- right to the shelves of individual real,- stores. The supplier can determine whether an item that is part of a special promotion is on the shelves of the right store at the right time, and they can take corrective actions if items are not where they should be.

On METRO Group's side, all information concerning each supplier's promoted products -- EPC code, order number, and other key information -- can be stored using the InfoSphere Traceability Server. As METRO Group's suppliers begin using EPCIS-standard software themselves, both METRO Group and its suppliers will be able to securely share information on tagged items. This will provide suppliers with a clear view of where their products are after they are shipped. For consumers, this means that the products they want are more likely to be available on the shelves of a real,- store.

According to ABI research, RFID systems revenue for the retail industry will grow 19.6 percent between now and 2013; from $228.4 million in 2008 to $558.2 million in 2013.* Michael Liard, research director for RFID & contactless at ABI Research, said: "The use of RFID in retail remains an exciting segment of the market. By using RFID, retailers everywhere have the opportunity to rethink their supply chain and in-store approaches. With the help of RFID technology retailers can use real-time information and improved data visibility and accuracy to transform their supply chains into adaptive business networks as well as to enhance the in-store consumer experience."

Retailers around the world are increasingly focused on finding new ways to provide a high level of service to customers while continuing to drive cost and inefficiency out of their supply chains. METRO Group is widely known for its innovative use of RFID technologies to improve customers' total shopping experience. To continue this effort, the retailer is tapping IBM's retail industry expertise and industry leading RFID software to meet its needs for two critical initiatives.

METRO Group has selected IBM's Electronic Product Code Information Services (EPCIS) software, InfoSphere Traceablity Server, to track items as they move through its supply chain. The software is fully compliant with GS1 EPCglobal's EPCIS standard for sharing RFID information among trading partners. By using software that meets those standards, METRO Group is creating a system it can use to share information on product movements with any trading partner that also uses an EPCIS-compliant solution. In addition, METRO Group is enhancing its ability to track items, such as meats, within its stores.

Commenting on his company's expanded relationship with IBM, Gerd Wolfram, managing director, MGI METRO Group Information Technology GmbH, said: "IBM is a strategic partner in our quest to use RFID technology to give consumers the best possible shopping experience. As a leader in the creation of the EPC Information Services standard, IBM has the technology and expertise needed to make our latest RFID projects a success for our customers and suppliers."

"METRO Group continues to be a pioneer in using RFID technologies to create a better experience for both customers and suppliers," said Martin Wildberger, vice president, RFID solutions, IBM. "With these projects, METRO Group is offering consumers a better shopping experience while providing greater supply chain visibility to suppliers."

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1 *excludes security/access control and POS/contactless payment application revenues. Source: ABI Research.