I had the honor of being invited to France for a behind-the-scenes look into some of the largest RFID deployments in the world, including DHL Exel Supply Chain / Metro Group and the world’s second largest retailer.  My invitation actually came from Neopost ID, the solution provider responsible for designing and implementing these solutions.  In Europe, Neopost ID is considered one of the leading RFID system integrators with an extremely impressive client list, including the aforementioned companies.

DHL Exel Supply Chain / METRO Group Cash & Carry Stores

As a third party logistics (3PL) provider, DHL Exel Supply Chain wanted to improve the supply chain operations with one of their most important clients: METRO Group.

Working with Neopost ID, DHL and Metro launched the largest RFID deployment in France.  They have implemented RFID technology in 152 dock door portals installed in 6 DHL food logistics centers and 90 METRO Cash & Carry stores in France, tracking 1.5 millions pallets per year.  The solution is focused on the delivery of dry goods and alcoholic beverages.

How the Solution Works

RFID at the DHL Distribution Centers

Single and mixed SKU pallets, such as the one pictured below, are built at a DHL distribution center and affixed with an ISO/IEC 18000-6C compliant RFID tag.  The data on the RFID tag is associated with the pallet contents.

At the dock door, an industrial-type RFID-enabled portal designed by Neopost ID (pictured below), is used for verification of outbound shipping.  The portal has a number of sophisticated features including:

• a keypad on the dock door portal that allows the dock door to be securely opened and associated with the store number the trailer is going to;
• a bright red LCD display gives the fork-lift operator the running count of how many pallets have been loaded, along with a letter denoting the category of contents of the pallet just loaded;
• a smaller LED display shows the pallet ID. 

As the RFID tagged pallets are properly loaded into the trailer, a friendly green light flashes, the portal beeps, and the counter on the portal increments by one.  However, if an operator accidentally tries to load a pallet destined for a different store, a red light flashes and an alarm sounds.  This helps to prevent mis-shipments.

These portals also manage the receiving process of pallets coming from other DHL platforms for cross-docking operations. The portals are able to determine the direction the pallet is traveling (inbound or outbound) by using a combination of sensors and an intelligent algorithm developed by Neopost ID.

Given the close proximity of the dock doors to one another, one of the biggest challenges the Neopost ID team had to overcome was to ensure that each portal properly identifies the pallets traveling through the dock door while filtering out stray reads from pallets traveling in/out of other dock doors, pallets traveling near a dock door, or pallets stored in the vicinity of the dock doors. This is one of the most impressive capabilities of the portals.

RFID at the Metro Stores

On the other end of the supply chain, each METRO Cash & Carry store has one or two RFID-enabled dock door portals.  These units have a different design than the units at the DC because the stores have a much simpler environment (see photo right).

As directionality is important at the dock doors in the stores, the portal is designed with 3 optical sensors used to determine the direction and speed in which the pallet is traveling.

At the store we visited, I watched as mixed pallets, such as the one pictured below with cat food and wine, were quickly received without any errors.  Like the DC, a counter increased with each received pallet.

The Backend Integration

Neopost ID hosts all of the real time tracking information using EPCIS servers at their data center in the South of France.  DHL and Metro use a web-based application designed by Neopost ID to manage delivery tracking at the DCs and the dock-door portals at each METRO Cash & Carry store. The Neopost ID software application interfaces with multiple DHL and METRO information systems, for instance to produce the RFID labels in the DHL DCs.

Employee Experience with RFID is Essential

I had the opportunity to speak with François Langlet, Business Process and Optimization Engineer at DHL, a key member of the solution team regarding the implementation.   “Today, RFID is considered a success. We are experiencing nearly 100% read rates.”

Two of the primary reasons for not achieving 100% read rates are associated with operator error.  Warehouse staff sometimes fail to apply an RFID tag or they forget to turn on the RFID enabled dock door.  However, such mistakes are becoming more uncommon.  Langlet explains, “At first, when a pallet didn’t read via RFID, the operators simply ignored it and kept doing what they had done before.  Now, RFID is becoming part of the process. They make an effort to understand why a pallet does not read”.

METRO Group's Recently Reported RFID Related Results

Internet Retailer reported that in an October 27 speech by office chief, Gerd Wolfram, he stated METRO Group found that using RFID-tagged pallets for inventory tracking brought a “significant reduction of shipping mistakes and resulting compensation claims,” in addition to a 15 percent cut in truck unload time and halving the time it takes to verify proper item delivery. Additionally, by using RFID to coordinate sales floor promotional displays with ad campaigns METRO Group has yielded a 54 percent increase in sales.

Conclusion

The world’s largest retail companies are successfully using RFID technology in their supply chain operations.  Every day, the RFID-enabled processes improve as employees become more experienced with the technology, which yields even greater benefit.

About Nepost ID

For 7 years, the team at Neopost ID has been focused on developing logistics solutions and perfecting a solution-as-a service model. If you’re not familiar with this type of model, it works like this: Neopost ID charges no upfront costs to the customer for deployments, only a fixed monthly fee.  Companies essentially lease the equipment, software, and everything that ties it together from Neopost ID.  Design, installation, and on-going support costs are all factored into the monthly charge.  The consumables, such as RFID tags, are a separate cost based on volume. This takes the majority of the risk away from the implementer and places it on Neopost ID.  It also makes return on investment (ROI) determination significantly easier.

Beyond confidence in their technical capabilities, Neopost ID’s mother company Neopost Group’s size and strong financial position allows them to offer this model which has proven itself in some of the largest RFID deployments in the world, including the two covered in this article.

Neopost has a direct presence in 15 countries, with more than 5,500 employees. Their sales reached €918.1 million in 2008, up 1.2% compared with 2007.

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