Department store chain Kaufhof Warenhaus AG is the newest member in a growing group of German retailers deploying miniature transponders in merchandise to improve inventory management and gain better visibility into supply chain operations.
On July 1, Kaufhof, which is owned by the Metro AG group, will begin testing RFID (Radio Frequency Identification) technology at three locations in collaboration with German textile manufacturer Gerry Weber International AG and several companies in the IT sector, including Siemens Business Services GmbH & Co. OHG (SBS), Siemens AG and Koninklijke Philips Electronics NV, a Kaufhof company spokeswoman said Friday.
In April, Metro unveiled its Future Store, a supermarket that is also testing RFID technology together with U.S. chipmaker Intel Corp. and German enterprise software vendor SAP as part of its mission to serve as a test lab for retailing technologies within the retail group.
The two German companies join several others in the country, including Otto GmbH & Co. KG, another large German retail group, that began testing RFID technology earlier this year in cooperation with SBS, according to SBS spokesman Andreas vom Bruch. "There's huge interest in RFID systems in the retail sector," he said.
Elsewhere, U.S. retailing giant Wal-Mart Stores Inc. and Tesco PLC of the U.K. as well as consumer product suppliers Procter & Gamble Co. and The Gillette Co. are a few big names in a growing list of companies experimenting with RFID technology.
The rising popularity of RFID has also caught the attention of U.S. software giant Microsoft Corp., which this month joined AutoID Inc., a not-for-profit organization promoting the use of the new smart tag technology.
AutoID, formed last month, is a joint venture of the Uniform Code Council Inc. (UCC) and EAN International (EAN), two bodies involved in the standardization of computer-readable product identification technology. The work of UCC and EAN is most obvious in the bar codes found on the packaging of consumer goods.
For Kaufhof, SBS is responsible for introducing a pilot RFID system to track every individual textile product from Gerry Weber along the entire supply chain, from manufacturing and distribution to processing at the check-out points.
The project calls for some 20,000 chips to be integrated into the price labels attached to articles, according to SBS. The automation and drive division of Siemens will provide devices for reading data on the RFID chips in both the warehouses and stores. Special mobile reading devices in the stores, for instance, will allow staff to enter and check new goods in a matter of seconds, while another reading system installed directly in the shelves will keep track of inventory.
RFID enables objects to be identified contact-free and, unlike bar codes, without visual verification, from a distance of up to 70 centimeters (cm), SBS said in a statement. The transponder consists of a chip and an antenna packed in paper, plastic or ceramics. The chip can be as small as 1.5 square cm and 0.3 millimeters (mm) thick.
The unit used in the Kaufhof pilot has a storage space of 1,024 bits but can be expanded to up to 10,000 bits, allowing it to store substantially more information than the conventional bar code, SBS said.