Rfid Seca Group2

7/24/2019 Rfid Seca Group2

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CASE: RFID at the Metro Group

Group: 2, Section A

Q1. What factors contriute to in!store "o#istics pro"e$s in #rocer% retai"in#& 'o( (ou")

pa""et an) case "e*e" RFID re)uce these pro"e$s&

Ans(er:Logistics problems in grocery retailing are as follows:

1. Shrin+a#e pro"e$: Estimated shrinkage levels approximately 2% of sales worldwide.

Shrinkage happened de to inventory theft! either by store employees or by cstomers.

2. ut of Stoc+:

a. "rodcts not available on the shelf bt available in the backroom of the store

b. "rodcts not available both on shelf and in backroom of the store

#. In*entor%: $osts involved are holding and carrying costs. igher the inventory held& higher will

be the costs.

'. -o( ro)ucti*it%: (ecase labor is involved in every step of the process& hman intervention

is present. (ecase of low labor efficiency& the prodctivity declines.

). De$an) 'an)"in#: *ith the nmber of S+,s higher than ever& making demand forecasts is

more difficlt than ever. -his leads to higher inventory stocking leading to higher costs. lso

sometimes some prodct is over stocked and some prodct is nder stocked.

/. 'i#h Costs: igh warehose& transportation and distribtion costs.

0. ro$otion co$p"iance: spermarket cold have as many as 1 promotions in a week& yet

lack the resorces to carry ot so many events.

Soltion to the above problems sing pallet and case level 345

/20 Ea$ine the process f"o( in Metros #rocer% supp"% chain an) i)entif% ho( these processes

(ou") i$pro*e (ith the i$p"e$entation of RFID at the pa""et "e*e" an) the case "e*e"&


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M a n u f a c tu r e r ' s

P l a n t

P a l l e t s e i t h e r s t o r e d i n p l a n tw a r e h o u s e o r m o v e d d i r e c t l y

I t e m s p a c k e d i n c a s e s a n d p u t o n

M a n u f a c t u r e r ' s

D i s t r i b u t i o n

C e n t r e

P a l l e t s w e r e s e n t b y

t r u c k s t o M e t r o D s

P a l l e t s s t o r e d i n p l a n t

w a r e h o u s e

M e t r o

D i s t r i b u t i o n

C e n t r e

P a l l e t s

! e w p a l l e t s w e r e l e " t a s t h e y c a m e i n # $ h e y

w e r e s e n t o n a s " u l l p a l l e t s t o s t o r e s

M e t r o

S t o r e

s

% u m b e r o " p a l l e t s r e c e i v e d d e p e n d e d o n M e t r o s t o r e " o r m a t s #

& t o r e e m p l o y e e s w o u l d t y p i c a l l y o p e n t h e p a l l e t s a n d t r a n s " e rt h e c a s e s t o t h e s e l l i n ' ( o o r #

) t t h e M e t r o s t o r e s * p a l l e t s w e r e u s u a l l y p l a c e d i n t h e b a c k r o o m #

+ n i t s t h a t c o u l d n o t b e p l a c e d o n t h e s h e l v e s w e r e r e t u r n e d t o

b a c k r o o m a n d s t o r e d t i l l s e l " s p a c e w a s a v a i l a b l e

Ans(er:

-he process flow in 6etro7s grocery spply chain was typically as mentioned below:

With

the i$p"e$entation of RFID at Metro, processes can e i$pro*e) in the fo""o(in# (a%s:

4mproved labor prodctivity: tomating processes condcted manally

edction of inventory conts

4mproved "rodct availability

rocess I$pro*e$ent % usin# a""et "e*e" ta##in# (ou")

I$pro*e 3ruc+ "oa)in# process: *ith 345& trck driver cold atomatically check theidentity of a pallet. -here is no re8irement of manal scanning

4o nee) of Super*ision of entire "oa)in# process: Saving time and 9 .2 per pallet shipped

rocess i$pro*e$ent % usin# case "e*e" to i$pro*e Mie) a""et pic+in#

Auto$atic recor)in# of nu$er of cases: -he picker need not enter manally the nmber of

cases picked. -ime saved ' mintes for every 1# pallets picked per day and amont saved is

.10 per case.

Re)uction in pic+in# errors: warehose employees no longer have to check the pallets

I$pro*in# she"f restoc+in#: 345 wold improve in!stock rate from /% to ;% de to

improved replenishment and redction of picking errors which wold ltimately lead to a .)%

increase in store sales


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/50 Is RFID a #oo) in*est$ent for Metro& In %our ana"%sis, use the enefits "iste) in Ehiit 6

an) an% other enefits $entione) in the case. Quantif% the tota" sa*in#s that Metro (ou")

rea"i7e fro$ fu""!sca"e i$p"e$entation of RFI /oth pa""et!"e*e" an) case!"e*e"0

Ans(er:


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tagging Tagging

$otal >ene,ts toretailers per case 16#40 1#5=

%o#o" cases per year2*6.*..*...

1*.2*..*...

$otal &avin's peryear

42*=*4.*... 1*6.*14*...

ost o" -!ID in apallet

Casetagging

PalletTagging

ost o" passive -!IDin 2..5 year o"decision .#1= .#1=

%o# o" -!ID per case 1 .

%o o" -!ID pr pallet 1 1

%o# o" cases perpallet . .

Total cost of RFID 13#== .#1=

s per the calclations investment cost cold be recovered within a year or few years

?depending on case or pallet tagging@ as a reslt of benefits derived from 345 tagging.

-hs overall the investment in 345 is a good decision.

/80 Which of the fo""o(in# options (ou") %ou reco$$en) that Mier)orf an) Wo"fra$ propose

to the RFID steerin# co$$ittee&

/a0 Epan) the scope of current "e*e" RFID ro""out

/0 Mo*e to case!"e*e" RFIF (ith the $anufacturers current"% en#a#e) in pa""et!"e*e" ro""out

/c0 Stop the epansion of RFID efforts an) focus on tra)itiona" process i$pro*e$ent

opportunities


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S t o p R F I D a n ) f o c u s o n t r a ) i t i o n a " $ e t h o )E 1 p a n ) t h e s c o p e o f c u r r e n t p a " " e t " e * e " R F I D r o " " o u t. i t c a s e l e v e l 4 & o v e r a l l s a v i n g si n c r e a s e h e n c e a i l o t r o A e c t s e s t e d. 4 n v o l v e m e n t f r o m m a n f a c t r e r s a n d m e t r oi n c r e a s e

Ans(er

nother optionsMo*e to case!"e*e" RFIF (ith the $anufacturers current"% en#a#e) in

pa""et!"e*e" ro""out

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