Supermarket fills aisles with RFID

What is one of the world's largest retailers doing in one of the largest booths at one of the largest IT trade shows on the globe? No, Metro AG hasn't journeyed to Cebit to flog any new products, but rather to show how IT -- and in particular RFID (radio frequency identification) technology -- will dramatically change the retail sector.

It could be a first in the 20-year history of Cebit that an IT user, and not a vendor, is occupying 2,800 square meters of space to showcase cutting-edge technology. That says a lot about the importance this German company, operating Europe's largest RFID test bed, attaches to smart chip technology.

"We aren't testing RFID systems because we like to test new things," said Gerd Wolfram, managing director of MGI Metro Group Information Technology. "We firmly believe that we'll be able to lower our operating costs with this technology and also provide our customers with a richer shopping experience."

Metro isn't alone at its booth. More than 25 of the 60 technology partners collaborating in its Future Store initiative are exhibiting their systems, including IBM , Intel, SAP, and T-Systems International.

If Metro is making the biggest RFID splash at Cebit, other companies are creating some big waves as well.

At its booth, IBM is showing an RFID system for tracking packages tagged with smart chips. The system, developed in collaboration with DHL, a unit of Deutsche Post, is designed to improve shipment visibility and reduce inbound and outbound scanning processes by 90 percent.

Earlier this month, the Deutsche Post World Net, as the group is called, launched an initiative to develop innovative logistics systems using RFID technology. The initiative currently includes Intel, Koninklijke Philips Electronics and SAP.

"What we aim to achieve with this initiative is to bundle various areas of expertise to develop RFID systems and drive global standards," said Deutsche Post World Net spokeswoman Stefanie Danne.

Siemens Business Services (SBS) is showing how to integrate radio-supported production processes into SAP applications. With transparent RFID-based production controls, missing materials can be requested "just in time," which results in a significant reduction of work in progress.

SBS is also demonstrating an RFID-based patient identification system that lets hospitals provide their patients with better and more reliable treatment and care.

In the transportation sector, the company has developed a system that allows smaller passenger transport companies to use RFID to monitor their vehicle fleets more efficiently and issue more accurate scheduling information.

Stops are equipped with radio chips, while buses and streetcars are fitted with reader units. When a vehicle enters the stop zone, it reads out the identification number on the RFID chip and sends it together with the journey number, the route and the exact time to the operations control center. From there dispatchers can establish any scheduling changes and pass these on directly to passengers, transport staff or to the electronic-scheduling informer.

Abas Software is showing how, with the help of a new interface, RFID-based systems can be integrated into the company's ERP (enterprise resource planning) software.

However, as industry interest in RFID grows, so are concerns about the technology, prompting the European Commission to begin a public inquiry.

At Cebit, Commissioner for Information Society and Media Viviane Reding warned that while RFID is important to businesses and citizens alike, the technology "also raises concerns about trust. If we don't remove the trust problem, well, then the business won't fly."

As part of the inquiry, the Commission also will consult with governments and industry groups worldwide to try to reach an accord on interoperable standards for RFID equipment.