Group 10 Marco P – David G – Mujtaba Khalil – Anurag Bajpai

About Metro AG
 Germany’s biggest retailer
 €56.4 billion sales in 2006
 2,300 locations in 30 countries  250,000 employees  6 independent “Retail Formats”

Cash & Carry Wholesale Media Market and Saturn Consumer Electronics

Real Hypermarkets

Extra Supermarkets

Praktiker Building Materials

Galeria Keufh of Department Stores

Why RFID  Automatic Identification  More efficient  Reduce errors in data entry  Save labor time  Electronic Product Code  More information  Precisely identify individual items .

RFID Benefits in Retail Supply Chain  Reduce shrink in supply chain  Improve Plano-gram (promotion compliance)  Improve on shelf availability  Increased productivity and labor efficiency .

take to shipping area Store Pallet Place Cases on Pallets Shrink-wrap pallet with barcode Scan Barcode on Pallet Move pallet to storage area Store pallet Load Truck ship to Metro DC .Manufacturer Current Process Assemble pallet for truckloads Scan & pick pallet.

take to shipping area Store Pallet Shrink-wrap pallet with barcode Scan Barcode on Pallet Move pallet to storage area Store pallet Load Truck ship to Metro DC .What Can RFID Improve Manufacturer Place Cases on Pallets Assemble pallet for truckloads Scan & pick pallet.

Improved Process Manufacturer Place Cases on Pallets Store Pallet Load Truck ship to Metro DC Shrink-wrap pallet with barcode Assemble pallet for truckloads Move pallet to storage area Store pallet .

Current Process Receiving and Storing Pallets on DC Unload From Truck Scan Storage Barcode to verify Location Store Pallet Scan Barcode Transfer Pallet to storage Count cases on Pallet and inspect paper work Forklift Driver Scan on Pallet .

What Can RFID Improve Receiving and Storing Pallets on DC Unload From Truck Scan Storage Barcode to verify Location Store Pallet Scan Barcode Transfer Pallet to storage Count cases on Pallet and inspect paper work Forklift Driver Scan on Pallet .

Improved Process Receiving and Storing Pallets on DC Unload From Truck Count cases on Pallet and inspect paper work Store Pallet Forklift Driver Scan on Pallet Transfer Pallet to storage .

Current Process Picking and Shipping Pallets to Store Scan barcode on pallet Shrink-Wrap and put the barcode Sample Mixed pallets and check for accuracy Transfer pallet to picking area Move mixed pallet to SA Scan Barcode Scanning Pallet Assemble mixed pallets for store Load to Metro Store .

What Can RFID Improve Picking and Shipping Pallets to Store Scan barcode on pallet Shrink-Wrap and put the barcode Sample Mixed pallets and check for accuracy Transfer pallet to picking area Move mixed pallet to SA Scan Barcode Scanning Pallet Assemble mixed pallets for store Load to Metro Store .

Improved Process Picking and Shipping Pallets to Store Transfer pallet to picking area Load to Metro Store Assemble mixed pallets for store Sample Mixed pallets and check for accuracy Move mixed pallet to SA Shrink-Wrap and put the barcode .

Pallet vs Case An average pallet arriving at an Extra store : 70 cases .

7 Total benefit 15.Financial Benefit – Pallet Tagging Specific Change Manufacturer Truck loading at manufacturer Auto scanning at warehouse Process Change Retailer Auto scanning in receiving and storing pallets Auto scanning in order assembly Truck loading for shipments €-cent/Pallet 20 5 25 Total benefit 50 11.2 2.8 1.7 .

5 5 Total benefit 8.3 1.9 Total benefit 7 Increase profit from better on-shelf status Eliminate case counting in receiving goods Labor reduction in picking mixed pallets Eliminate sample checks of mixed pallets Reduce inventory counts Reduce mispicked cases Increase profit from better on-shelf status .Financial Benefit – Case Tagging Specific Change Manufacturer Retailer €-cent/Case 7 0.7 0.3 0.1 1.

Growth on Sales 140000.0 20000.0 100000.0 123883.000 EUR) .0 40000.0 102382.0 2005 2006 2007 Pallet Case 2008 2009 84614.0 80000.0 60000.0 112621.0 120000.0 93075.0 (in 1.

000 EUR) .0 39934.0 2008 3451.0 2005 2357.0 2007 Pallet Case 3137.0 20000.Savings 70000.0 2009 (in 1.0 40000.0 2006 2852.0 .0 50000.0 60000.0 43927.0 30000.0 2593.0 48320.0 10000.0 58468.0 53152.

0 20000.0 2 Case 3450.0 48919.0 59087.0 1 3182.0 5 (in 1.0 50000.000 EUR) .0 30000.Cash Flow 70000.0 .0 10000.0 53761.0 40000.0 2937.0 4 4071.0 3 Pallet 3746.0 60000.0 44517.0 40515.

ROI .IRR 1000 900 800 700 600 500 400 300 995 827 200 100 0 70 Pallet ROI IRR 59 Case .

0 - 50000000.NPV Case 182114706.0 Pallet Case .0 200000000.0 Pallet 8544247.0 150000000.0 100000000.

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