These tags, developed by German firm Witron Logistik & Informatik, will be used to identify system pallets and help the retailer achieve complete traceability at a vital section of the supply chain.
In the long term this should bring cost benefits due to less wastage and quicker identification of bottlenecks or weaknesses.
The new logistics centre, which has been designed to handle 265,000 cubit feed of goods per day within the dry goods section and 198,000 cubit feet per day in the fresh and frozen goods areas, will use Witron's OPM (Order Picking Machinery) for the fully automated picking of single units (cases) to ensure optimum supply to the supermarket's retail stores.
For the identification of system pallets - used for storing all incoming pallets in the goods-in area - Witron is using RFID tags integrated into each system pallet, rather than conventional barcode labels.
The company claims that this provides new benefits for Mercadona by increasing the reliability of the entire goods in system. The tags do not have any unusual specifications in terms of quality, as factors such as space restrictions are not relevant in this implementation. A scanning rate of almost 100 per cent and the long lifespan of the RFID tags used will also result in quantifiable process advantages.
There now appears to be an insatiable demand for RFID. A recent IDTechEx report, entitled RFID Forecasts, Players and Opportunities, analysed the rapidly growing and diversifying market for Radio Frequency Identification RFID. The total value of this market, including systems and service, will rocket from $1.95 billion in 2005 to $26.9 billion in 2015.
Primarily, this will be driven by another new and dramatic development. This will be the tagging of high volume items - notably consumer goods - at the request of retailers and postal authorities, and also for legal reasons. In these cases, the primary benefits sought will be broader and include cost, increased sales, improved safety, reduced crime and improved customer service.
UsingRFID reports that as far as Mercadona is concerned, all dry, fresh and frozen goods will be handled on the plastic system pallets. Mercadona's suppliers are currently using plastic pallets - without RFID tags for now - for the fresh and frozen goods areas (including meat as well as fruit and vegetables).
In due course, by replacing worn out pallets with RFID tagged ones, there will be a gradual change-over from conventional plastic pallets to RFID system pallets within the fresh and frozen goods areas, which will result in fewer and fewer of the incoming goods having to be placed on system pallets.
These system pallets will not only be used as an in-house transport device but will also be used within the entire supply chain.
At present it is planned that the RFID tag will be carry a 12-digit pallet number for clear identification purposes, and further information, such as the relevant product data, will be stored in the Warehouse Management System.
The new Mercadona logistics centre comprises 29,000 pallet locations for dry and fresh/frozen goods that are turned over at an average of one to three days. This dynamic system, which includes fully automated picking, can process a daily volume of some 375,000 cases.
Witron sees the implementation of this RFID system as its first step toward gaining practical experience in the retail supply chain market.