SAP Launches First RFID Solution to Help Customers Automate RFID-Enabled Business Processes

Packaged RFID Solution for Supply Chain Management Will Deliver Value through Seamless Integration of RFID Data into Applications

NEW YORK, NY - January 12, 2004 - Delivering on its vision of adaptive supply chain networks, SAP AG (NYSE: SAP) today announced the launch of the first packaged radio frequency identification (RFID) solution for supply chain management. Demonstrating leadership in the RFID space, SAP is delivering a solution that is the first of its kind developed and built entirely from the ground up to help companies manage the data reads from and writes to RFID tags. SAP, the world’s leading provider of supply chain management solutions, made its announcement at the National Retail Federation (NRF) show, being held Jan. 11-14, 2004 in New York.

Drawing upon experience from customer projects with leading companies like Procter & Gamble and the METRO Group, as well as six years of RFID research and involvement in RFID standards organizations, SAP has developed technology that will dramatically change supply chain management in the retail and consumer product industries. Companies can leverage data captured through RFID tags in their business processes by integrating ERP and SCM functionalities with RFID-enabled applications. Examples include packing and unpacking, shipping and receiving and tracking and tracing across the supply chain.

The Java-based RFID solution packages the new SAP Auto-ID Infrastructure, SAP® Event Management (SAP EM), a component of mySAP™ Supply Chain Management (mySAP SCM), and SAP® Enterprise Portal (SAP EP), a component of SAP NetWeaver™, the industry’s leading integration and application platform. Currently available to pilot customers, the SAP RFID packaged solution will be more widely available to customers in mid-2004.

The SAP RFID solution is built on SAP Web Application Server (SAP Web AS), part of the SAP NetWeaver technology platform, which ensures seamless extension and integration into SAP and non-SAP IT environments. The new packaged solution, developed to allow management and communication of RFID data and utilization of business content to automate RFID-enabled business processes, can be integrated into existing IT environments through Auto-ID connectors for SAP R/3, version 4.6c or higher, and mySAP™ ERP. SAP and its consulting and technology partners will help customers build individually tailored RFID solutions that address business case building, integrating RFID hardware infrastructure, creating solution blueprints and implementing projects. SAP’s automatic identification concept enables companies to manage multiple Auto-ID technologies, including RFID, barcodes and sensors.

“This is a solid enterprise infrastructure for RFID that will allow for the practical usage of RFID data across more processes and applications than many of the point solutions on the market,” said Steve Banker, service director for supply chain management at ARC Advisory Group, international analyst and consulting firm. “As companies discover and pursue RFID-related programs which are oriented toward business improvements, they will need to build an RFID infrastructure that can be used across their business.”

SAP has been conducting RFID research since 1998 and is a driving force in developing RFID technology and helping to set industry-driven standards according to the guidelines set forth by EPC Global. SAP was the first enterprise software sponsor of the Auto-ID Center, the predecessor of EPC Global, which leads the development of standards for the Electronic Product Code (EPC) Network to support the use of RFID.

Since March 2003, SAP has been working closely in its RFID Customer Council with more than 60 companies from the consumer products, pharmaceutical and retail industries. The council has helped SAP to define and develop the 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.

RFID-enabled Business Processes for the Real World
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. Approximately 1,700 products sold at the Future Store have RFID tags, helping to track and trace items as well 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.

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).

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.

“Our packaged RFID solution merges the virtual world of data with the real world of RFID-tagged assets,” said Claus Heinrich, executive board member, SAP. “By providing accurate, real-world, real-time data and information, the solution enables companies to close the loop between capturing data, converting it to meaningful information and automating all associated transactions and processes. This will help businesses create smarter, more responsive and more adaptive business processes to execute on our vision of adaptive supply chain networks.”

About SAP
SAP is the world’s leading provider of business software solutions. Through mySAP™ Business Suite, people in businesses around the globe are improving relationships with customers and partners, streamlining operations, and achieving significant efficiencies throughout their supply chains. The unique core processes of various industries, from Aerospace to Utilities, are supported effectively by SAP’s 23 industry solution portfolios. Today, more than 20,500 customers in over 120 countries run more than 67,500 installations of SAP® software. With subsidiaries in over 50 countries, the company is listed on several exchanges including the Frankfurt stock exchange and NYSE under the symbol “SAP.” (Additional information at http://www.sap.com)

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