Department store chain Kaufhof Warenhaus is the latest 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.
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On 1 July, Kaufhof, which is owned by the Metro group, will begin testing RFID (Radio Frequency Identification) technology at three locations in collaboration with German textile manufacturer Gerry Weber International and several companies in the IT sector, including Siemens Business Services, Siemens and Philips Electronics.
In April, Metro unveiled its Future Store, a supermarket, also testing RFID technology together with US chipmaker Intel and German enterprise software supplier 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, another large German retail group, that began testing RFID technology earlier this year in co-operation with SBS, according to SBS spokesman Andreas vom Bruch.
"There's huge interest in RFID systems in the retail sector," he said.
Wal-Mart and Tesco, as well as consumer product suppliers Procter & Gamble and Gillette, are a few names in a growing list of companies experimenting with RFID technology.
The rising popularity of RFID has also caught the attention of US software giant Microsoft, which this month joined AutoID, a non-profit organisation promoting the use of the new smart tag technology.
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 70cms, SBS said.
The transponder consists of a chip and an antenna packed in paper, plastic or ceramics. The chip can be as small as 1.5sq cm and 0.3mm 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.
John Blau writes for IDG News Service