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UPDATE: Coles Myer kicks off RFID trial

Coles Myer has teamed up with Intel Australia and Sun Microsystems for a two month trial using Radio Frequency Identification Device (RFID) tagging in Coles Myer distribution centres.The trial, which started in late May, uses RFID tags to track the movement of roll-cages in the supply chain from a Coles Myer distribution centre to a Coles supermarket.

Coles Myer has teamed up with Intel Australia and Sun Microsystems for a two month trial using Radio Frequency Identification Device (RFID) tagging in Coles Myer distribution centres.

The trial, which started in late May, uses RFID tags to track the movement of roll-cages in the supply chain from a Coles Myer distribution centre to a Coles supermarket. Equipment installed at the distribution centre's dispatch door and the supermarket receiving dock will allow real-time tracking of the roll-cage's arrival at the dock. The readers will register on Coles' database the arrival of the roll cage.

"This technology is still relatively new for the retail industry and it is important that Coles Myer starts to understand the impacts of the technology at an early stage so as to be ready when and if adoption is possible," Coles Myer chief information officer Peter Mahler said.

Coles is expecting the new technology to save time and increase accuracy by replacing the manual bar code checking which is currently used.

"While Intel does not manufacture RFID tags, servers and mobile client devices built around Intel architecture play an integral part in tracking and recording RFID movements through supply chains," said Philip Cronin, general manager Intel Australia and New Zealand.

During the trial, Sun will supply RFID standards-based infrastructure platforms, including hardware, software, services. Using J2EE, based on Sun's SolarWind middleware and SolarView management tools, Sun's solution included servers and software development.

Sun Microsystems managing director Jim Hassell said "The use of RFID technology is seen as the technology that is going to revolutionise the supply chain. By automatically tracking the movement of stock and assets, this technology will enable organisations to increase efficiency, reduce cost and complexity not only for the supply chain but all company assets."

Hassell also said that although the use of RFID has been shrouded in controversy, "the retail sector is more than ready for RFID technology. On a global scale, there is currently major interest and funding being poured into RFID."

"We are going to see a radical uptake of RFID solutions worldwide over the next 12 months," Hassell predicted.

Mahler said, "RFID devices themselves are very much at the cutting edge of technology today. What we are testing through this trial is the idea that they can deliver a better, simpler and cheaper service in our busy supply chain."

Coles has also teamed up with Accenture and EAN to conduct the trial.

Coles Myer innovation and research manager Andrew Littleford said they are not concerned about codes of conduct or policies because the trials are only within their "four walls and therefore will not affect the customers."

He also added that it was still too early to disclose if they are going to take the technology a step further after the trial and if it will save them operational costs.

"That information cannot be disclosed at the moment since we are still learning about the technology and it is still very early. The trial is only focused around asset management within Coles and not impacting the front of the store, therefore it has no impact to customers," Littleford said.

Critics of RFID fear that the technology will be used to track down individual purchases, even after leaving the retail outlet. However, Littleford said that they are not worried about what critics of RFID say regarding privacy issues since they are still trying to "walk before they can run."

"We are learning more about the technology and we are looking at learning more on what the future might hold. It is still way too early to say what efficiencies RFID can give us," Littleford said.

Trials are being conducted at Coles' Hampton Park distribution centre and the Glenferrie supermarket in Melbourne.