Volkswagen and IBM Shift Into Higher Gear to Create Smart Supply Chain Through RFID

STUTTGART, GERMANY and ARMONK, NY, Mar 24 (MARKET
WIRE) --
IBM (NYSE: IBM) today announced it is working with Volkswagen Group,
Europe's leading vehicle manufacturer, to improve the automaker's
material logistics operations through the use of sensor technology.

The new system will significantly enhance the carmaker's efficiencies in
day-to-day operations, for instance at the goods-receiving stage. As a
result, Volkswagen is preparing to introduce this technology at its
central logistics hall, located at its major plant in Germany.

Volkswagen is deploying the new system following a one-year pilot project
in which the automaker and IBM tested RFID technology with suppliers.
Using this system, shipping containers carrying auto parts destined for
Volkswagen will be increasingly fitted with RFID tags.

"The pilot project has been ground-breaking," said Kurt Rindle, global
sensor Solutions executive, IBM. "Volkswagen is driving innovation by
becoming the first vehicle manufacturer to make daily use of RFID
technology in the flow of materials between suppliers and the
manufacturing line."

The information on the tagged containers is automatically collected by
readers at all key locations throughout the supply chain -- first at the
supplier's shipping department, through the transportation process until
they arrive at Volkswagen, then during storage, collection and
installation on the automaker's assembly line. The same process is used
when Volkswagen returns the empty shipping containers to its suppliers to
ensure that all containers are returned after the auto parts are
received. The technology is also reducing the need for paper documents
and barcode labels.

"Our long-term goal is to implement an integrated, paperless production
and logistics chain throughout the whole Group," said Klaus Hardy
Muehleck, Group CIO and head of Group IT at Volkswagen. "The pilot
project showed that we can reliably integrate RFID technology into our
business processes at a low cost," he said.

For the pilot, Volkswagen fitted around 3,000 shipping containers with
passive RFID tags, supplied by Intermec Technologies Corporation. The
technology has been refined so that it can also automatically register
metal containers, which normally interfere with RFID technology. The tags
were used on containers carrying sunroofs for the new Volkswagen Golf.
Readers at the entrances to the manufacturing line, along with mobile
handheld scanners and forklifts were used to identify the containers and
their contents.

The IBM technology being used for this project is comprised of IBM Global
Technology Services' RFID container management solution together with the
IBM WebSphere Premises Server, an application-neutral RFID middleware
product.

About IBM

For more information on IBM and its RFID solutions, visit:
www.ibm.com/solutions/businesssolutions/sensors

About the Volkswagen Group

More information on the Volkswagen Group, visit: www.volkswagenag.com

Contact:

IBM
Nancy Kaplan
914-766-1849
nkaplan@us.ibm.com

Volkswagen Group
Hans-Ruediger Dehning
+49 (53 61) 9-7 71 73
hans-ruediger.dehning@volkswagen.de

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