IBM and METRO Group are boasting of efforts to implement a radio frequency identification system which tracks shipments from suppliers to warehouses, distribution centers and the retailer's stores. The companies are also teaming on a customer-focused RFID project in one of METRO Group's Galeria Kaufhof department stores. The initiative proves that RFID is reliable and affordable for retailers, according to these partners.

The two have actually been working together on RFID projects since 2003. "Our relationship with IBM has been a strategic component of our RFID programs," says Gerd Wolfram, managing director of METRO Group Information Technology GmbH. "Innovation is at the heart of our strategy. Our use of RFID is improving our operational effectiveness as well as the experience of our customers."

IBM and METRO recently completed Europe's largest RFID project. It allows METRO to track shipments from suppliers to its warehouses and distribution centers to around 200 supermarkets and stores across Germany.

Pallets of goods destined for METRO's Cash & Carry or Real stores contain an RFID tag when they leave the supplier or the group's distribution centers. The tags are scanned by RFID readers on delivery at a store location. The data captured is provided in real time to METRO's merchandise information systems using the IBM WebSphere Premises Server, which aggregates and analyzes RFID information.

Galeria Kaufhof, a division of METRO Group, has teamed with IBM on a pilot program involving approximately 30,000 articles in the men's fashion department of a store in Essen, Germany.

Employees use the system to find articles that shoppers are looking for and to monitor stock to ensure availability of popular items. The store also features devices in fitting rooms which recognize the tagged garments and display customer information such as price, fabric and care instructions.

IBM also developed Galeria Kaufhof's Store Information System, which provides real-time information on inventory based on readouts of RFID tags. The system puts comprehensive reports on business-related performance indicators into the hands of store employees and managers.

"With this project, METRO Group has proven that RFID technology is mature and reliable for use across a chain of retail stores at a reasonable cost, and with minimal effort for suppliers," says Martin Wildberger, vice president, RFID solutions, IBM.

Visit www.ibm.com and www.metrogroup.de