IBM Providing Technology Backbone for METRO Group's First Complete Radio Frequency Identification Rollout in Retail Industry

METRO Group Chooses IBM to Deploy RFID Across the Supply Chain; Opens IBM-Led Innovation Centre for RFID in Retail

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DUESSELDORF, GERMANY - 07 Jul 2004: METRO Group, the world's fourth largest retailer, has chosen IBM to provide the software to integrate the rollout of RFID throughout their supply chain, IBM announced today. Using IBM RFID systems integration to help guarantee that goods are delivered on demand when they are needed, METRO Group is automating its goods receiving process, with the aim of eliminating stock counting errors and keeping customers happy by avoiding "out of stock" situations.

METRO Group is also opening its new RFID Innovation Centre in Neuss near Duesseldorf in a programme led by IBM for the retailer. The centre is an RFID working platform for the Retail and Consumer Products Industries, which will allow suppliers to test their readiness for RFID while evaluating emerging technologies for retail. IBM is providing the overall systems integration and technology for the centre.

Both projects follow the recent announcement by METRO Group that it plans to become the first in the retail industry worldwide to begin using RFID technology throughout its entire process chain. The rollout is scheduled to begin in November when 20 consumer products suppliers to the major international retailer will place RFID tags on pallets of goods, with another 80 suppliers scheduled to follow next year. By January 2006, METRO Group plans to have 300 suppliers sending RFID-tagged pallets and cases to its distribution centres.

IBM will be providing WebSphere-based RFID and data management solutions to METRO Group to help the retailer integrate their suppliers' processes into their own supply chain, providing an instant virtual view of the complete shipping process and the exact location of goods at any stage in the journey from the manufacturer to METRO Group's central warehouses and stores.

This will give METRO Group a fast, efficient and secure supply chain with the flexibility to respond in real time to changing market conditions and customer demand. Eliminating time-consuming physical checking of each pallet delivered to the Distribution Centres will also halve the time needed to unload each delivery truck.

"RFID is transforming the retail industry," says Dr. Gerd Wolfram, Project Manager of the METRO Group Future Store Initiative. "IBM has deep experience in Retail, in Software and in RFID. We will draw on that experience to help us realise our RFID vision while proving the value of the technology in reducing stock errors and streamlining our supply chain to the benefit of our customers and our business."

IBM's middleware will provide a standards-based infrastructure to collect, integrate and manage data obtained from RFID tags and readers from manufacturers to METRO Group's distribution centres and stores. The solution allows the retailer to monitor the status of pallets being shipped and delivered. Enabling METRO Group to manage its systems remotely and integrate data from its store operations and data centers also increases the company's operational efficiency.

The benefits of IBM's RFID integration solution have already been proven at the METRO Group Future Store in Rheinberg, Germany which has been a major success since it first opened its doors in April 2003. At the new METRO Group RFID Innovation Centre, suppliers will be able to learn from the experience the retailer has already gained in the RFID field at the store. IBM provides the overall systems integration at the Rheinberg store.

The new Innovation Centre, run on IBM integration technology, enables METRO Group suppliers to test their processes in a virtual environment, where the results can be displayed on any device including hand-held personal digital assistants. Included among the IBM technology line-up at the Centre are an RFID tag deactivator kiosk, and the Everywhere Display, the latest consumer technology from IBM research. The Everywhere Display turns any surface in a retail store into a virtual touchscreen and is the newest innovation at the Future Store.

"Retail is one of the world's most competitive industries. Innovative technologies, integrated with each other and with new business processes, are what help retailers to stay ahead of the game," says Alain Benichou, IBM Distribution Sector Vice President for Europe, the Middle East and Africa. "IBM's RFID solution is enabling METRO Group to transform their business and maintain their lead in this demanding and fast-changing market."

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