Metro Group

electron tube Group Executive Summary subway system has taken initiative to implement RFID tagging to better track its neckcloth and remedy its supply chain management. The palette aim tracking which has been implemented at certain stores has proven beneficial and now thermionic tube is considering show suit train tagging. Given the cost saves, utility in inventory and store level performance, the national level tagging would yield high schooler savings as comp ard to pallette level tagging. Since RFID technology is evolving very fast the primary cost toll of tags, would decreases signifi foundationtly and thereby would increase ROI.Therefore, with the assumptions case level tagging is recommended over palette level tagging. In-Store Logistics problem One factor that contributes to in store logistic problems is on shelf availability of produces. Theres about 6% to 10% out of stock rate in grocery retail and that is a study problem in loss of revenue and potential difference loss of customers. The cause of this problem could be that the inventory already exists in store but the in store inventory system is non sophisticated enough to prevent the problem. RFID, however, lowlife help ameliorate inventory data accuracy and stock visibility. other problem is promotion compliance because of the legion(predicate) promotions going on per store, the stores lack the resources to carry out all the events efficaciously and that could go away in manufacture dissatisfaction collectible to unsatisfactory promotions. Using RFID can help in pallet and case level by adult accurate stock information so manufacturers can see how their promotions ar doing as well as if markets are holding their end of the bargain. Finally, RFID can improve problems in productivity and labor efficiencies. One problem is croakers unable to locate items to physically scan them with traditional readers.With RFID, the worker just of necessity to be within the vicinity so no extra work needed to identify correct pallet from within a case. Another labor problem that arises is too a lot manual(a) work make by workers to scan items when they arrive, with RFID, the pallets can just arrive on side and just be unloaded instead of manually inspecting codes by workers. sour flow of the supply chain Upon production, the assembly of the pallets is conducted at the manufacturers plant. The pallets are stored each at the manufacturers warehouse or are shipped to a distribution center (DC).From the DC the pallets are either shipped to one of pipes DCs or maneuver to a Metro store. At the Metro DC pallets are either kept as they arrive or get unbundled and repackaged as motley pallets. Every pallet contains from 60 to 80 cases with some exceptional cases of 900cases/pallet. The above flow requires high labor force. As a next step, the stock room determines how lots of the product should be cash in ones chipsd directly to the sales floor and how much n eeds to remain in the stock room. There are cases where products strike out for the sales floor had to be returned back to the stock room due to lack of display space.The products displayed at the sales floor are as well relocated for promotional events. A retail store receives shipments either directly from the manufacturer or from a variety of Metro DCs. In appendix to the various locations the shipments originated, the size of the pallets, the pallet mix, the randomness of the delivery schedules there are also cases where a product has to be returned for quality issues or product damage. Business Process Optimization at the pallet level The major difference between barcodes and RFID tags is that RFID tags do not require a direct line of sight for scanning and processing.This leads to major process automation wherever the process scanning is required, e. g. scan barcode on pallet, scan storage barcode to sustain location, forklift driver scans barcode on pallet etc. Whenever a pallet is within a read range from an RFID reader, the scanning automatically takes places, therefore, the employee doesnt direct to physically locate and scan the tag (ultrahigh frequency benefits displayed in present 3). Apart from that, RFID tags can store information about the object itself (location, case counts, etc. ).This leads to major picking and truck encumbrance process optimization. Whenever a pallet is created, the number of cases and pallet location can be stored in the tag and placed on the pallet. Pallet movement can then be detected by readers placed within the warehouse for change warehouse visibility. This allows employees to locate the pallets quicker and reduce the time required to move pallets to outgoing docks for shipment. Inbound and outbound pallet inspection during the truck loading process becomes faster, more accurate, and requires less resource utilization.RFID readers at the loading docks leave be able to automatically check the identity of a pallet when it is moved onto or off the truck, eliminating in that way the need for manual scanning and inspection. Business Process Optimization at the case level Implementation of RFID tags at the case level reduces the need for forklift readers to count cases on the pallets as the case tags provide immediate signal notification of case count. As pallets are stored in the Metro DC for potential case mixing, current process flow is facilitated by improved efficiency of mixed-pallet picking.In addition, RFID tags identify optimal picking paths for the employees or the best route to take done the warehouse when they search for the products that depart consist of the mixed pallet. During shrink-wrapping, the need to label the mixed pallets is come aboutd as case tags go forth verify and notify trucks (headed from Metro DC to Metro stores) for the pallet content. Case level RFID tags also eliminate the 1% mixed pallet case recounting process, a result of too many or too few cases being picked for mixed pallets or wrong cases altogether being picked.The tags on the cases notify employees of unseasonable inclusion or exclusion without the need for manual recounts. Process improvement is facilitated through more efficient shelf restocking at the store level. For the world-class time, employees start out improved visibility of what is in the backroom, instead of relying upon memory of backroom items. This result help limit the stock outs but will also improve the inventory-ordering accuracy. Last but not least, storage mapping utilized in conjunction with case level RFID tags limits the time required for searching the substitution cases.When the point-of-sale data indicates that a shelf is empty, employees are notified that replenishment is required, have clear visibility of the number of that particular item available in the backroom, as well as the exact backroom item location. Cost-Benefit analysis depict 1 shows the cost benefit analysis for the imple mentation of RFID either at palette level or case level. In both scenarios, Metro would not be generating enough incremental profits as foreign to the investment.Certain assumptions were made regarding average cost of tag, average number of pallets reaching DC and number of DC. In case of palette level tagging, manufacture is rotary to make huge savings per plant which is evident from per palette saving data as well. But for the case level tagging, Metro will be generating high incremental savings but not more than investment. Assuming that tags and portal bought by Metro runs for 5 years, Metro will break even on its investment in less than 2 years and would earn more than $11M savings per year thereafter.