SAP: A Pioneer in RFID

By : |September 28, 2005 0



As a pioneer in RFID technology, SAP has been conducting RFID (radio frequency identification) research since 1998 and was the first software vendor to join the Auto-ID Center, which leads the development of standards for the Electronic Product Code (EPC) Network to support the use of RFID. The combination of its long engagement in RFID technology development and SAP’s core strength in building powerful business applications makes SAP a natural choice for leading companies when it comes to RFID pilot projects.

Since March 2003, SAP has been working closely with its RFID Customer Council which has more than 60 companies from the consumer products, pharmaceutical and retail industries as members. The Council has helped SAP to define and develop its RFID solution package, identify key end-user business and technical priorities and requirements and fully understand RFID-enabled business processes that will drive ROI from customer RFID investments.

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In January 2004, SAP introduced its packaged RFID solution for supply chain management, an out-of-the-box application which helps companies fulfil impending requirements fro RFID compliance set by the US Department of Defense, the US Food and Drug Administration and large retailers such as Wal-Mart, Tesco or Metro Group. During CeBIT 2004, SAP demonstrated how RFID technology integrates into its SAP NetWeaver technology platform and can fulfil the mandates of federal administrations and retail companies.

Future Store Initiative
The most prominent example of SAP’s use of RFID technology in a real-life setting is the METRO Group Future Store Initiative, of which SAP is a founding member. Together with METRO Group, Intel and more than 40 partners in the technology, consumer products and service provider industries, SAP set out to implement cutting-edge technology for retailers in the METRO Group Future Store, which opened on April 28, 2003 in
Rheinberg, Germany.

At the Future Store, shoppers use personal shopping assistants – PSAs – attached to their shopping carts to scan products such as Gillette razor blades, Kraft cheese, and Procter &Gamble shampoo for payment as they roam the aisles. Each item is registered in an instant, giving the customer a readout of how much they have spent along with ancillary information about the products in their carts – nutritional information, or details about where a wine comes from or which recipe is best suited to a particular cut of beef. Store employees use personal digital assistants (PDAs) to access information about the supermarket’s inventory. And merchants keep an eye on back office systems linked to RFID readers that notify them when stocks are running low and track how quickly goods are moving. SAP created the software needed to connect every piece of RFID technology to the enterprise.

Approximately 1,700 products sold at the Future Store have RFID tags, helping to track and trace items as well as to build a more efficient and adaptive supply chain from the distribution center in Essen to the store. Products are tagged at the item, case and pallet levels.

Procter & Gamble and RFID
Another RFID project has involved SAP and Procter & Gamble. SAP and P&G share a common understanding of the significant importance that RFID brings to supply chain integration. Because of this joint interest and belief in the importance of RFID, SAP and P&G are jointly participating in pilot projects to build upon SAP solutions, learn how to make RFID a successful part of supply chain integration, and to identify what is required to make this technology a commercial success.

Innovation Award
Recently, the Wall Street Journal Europe presented SAP with one of its annual European Innovation Awards for the company’s role in the METRO Group Future Store Initiative. Out of 130 companies, SAP was awarded first prize (co-winner) in the category “Business Applications of IT Services”. SAP is responsible for the project’s software architecture and the interface between data capture and the back-end, leveraging a pre-version of SAP Auto-ID Infrastructure. Tracking and tracing capabilities are provided via the integration of the RFID data through SAP Auto-ID Infrastructure with SAP Event Management. Employees of the METRO Group Future Store access the data by using SAP Enterprise Portal and can analyze the data using SAP® Business Information Warehouse (SAP BW).

SAP Solutions using RFID

Cross industry solutions:

  • mySAP SCM
  • mySAP CRM
  • mySAP PLM
  • mySAP ERP

Major Industry Solutions:

  • SAP for Consumer Products
  • SAP for Automotive
  • SAP for Pharmaceuticals
  • SAP for Retail
  • SAP for Healthcare

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