Executive Summary: Metro has taken initiative to implement RFID tagging to better track its inventory and improve its supply chain management. The palette level tracking which has been implemented at certain stores has proven beneficial and now Metro is considering case level tagging. Given the cost savings, improvement in inventory and store level performance, the case level tagging would yield higher savings as compared to palette level tagging. Since RFID technology is evolving very fast the primary cost – price of tags, would decreases significantly 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 products. There’s about 6% to 10% out of stock rate in grocery retailing and that is a major problem in loss of revenue and potential loss of customers. The cause of this problem could be that the inventory already exists in store but the in store inventory system is not sophisticated enough to prevent the problem. RFID, however, can help improve inventory data accuracy and stock visibility. Another problem is promotion compliance – because of the numerous promotions going on per store, the stores lack the resources to carry out all the events effectively and that could result in manufacture dissatisfaction due to unsatisfactory promotions. Using RFID can help in pallet and case level by giving accurate stock information so manufacturers can see how their promotions are 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 workers unable to locate items to physically scan them with traditional readers. With RFID, the worker just needs to be within the vicinity so no extra work needed to identify correct pallet from within a case. Another labor problem that arises is...
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