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Radio Frequency Identification Tag - RFID

  • “To a surprising extent, businesses operate today on information that has the quality of myths. The arrival of RFID will, in effect, turn on the lights and identify what is really happening…It could eventually mean a whole new way of doing business.”

- Kevin Ashton, former Executive Director and Cofounder of the Auto-ID Center, Massachusetts Institute of Technology.

 Wal-Mart tunes in to radio tagging.

 So thoroughly have the lessons of the Internet bubble been learned that he launch of any new technology is now invariably accompanied by much talk from industry observes about dangerous hype and inevitable disappointment.

 

A case in point is RFID, a new, super-cheap version of which may, its backers hope, be destined to transform everything from shopping to warfare.  As soon as RFID’s boosters alerted the world to their innovations, reports of dire setbacks began to circulate.  Yet, if anything, the surprise is how well the rollout of the new technology is meeting early expectations.  DNS ERP is logically the first step in that direction.

 

RFID systems are made of ‘readers’ and ‘smart-tags’ tiny microchips each with an attached antenna.  The tags can be stuck on everything from milk cartons to hospital patients.  When prompted by a reader, the tag broadcasts the information on its chip.  Unlike the traditional bar code, which smart tags aim to replace, RFID chips give every tagged object a unique identification.  

 

Companies hope to use RFID to track the trillion of objects that circulate the world every year in planes, Lorries, and ships, through ports and warehouses, on to shop shelves, into homes and office.  Accurate tracking should save hundreds of billions Rupees a year as it improves distribution, reduces theft, cuts labor costs and shrinks inventory. 

 

In 2002, the Auto-ID centre, a partnership between academic researchers and business, came up with a standard for a new, stripped-down RFID chip that stores just 96 bits of information, enough to give every object in the world a unique number.  With tag readers plugged into a computer network, this number can be used to look up detailed information about the object, such as its origin, age, and expiry date.  The centre also challenged manufacturers to produce a five-cent tag.  Several start-ups, said they could do so.  Suddenly, there was huge interest and talk of a potential mass marked.

 

Last June, Wal-Mart said it would require its 100 top suppliers to put tags on pallets and cases of products for shipment to a cluster of its super centers in northern Texas.  This year Metro, a German retailer announced tag mandates for their suppliers.  On 17 June 2005, Wal-Mart said it would extend its RFID rollout to its top 300 suppliers and to more shops.

 

Wal-Mart has begun the first major field test its progress toward its goal of having its top 100 suppliers use radio tags to track their shipments by the end of the year.

The company said that it had begun to receive radio-tagged shipments of 21 products from eight manufacturers at a distribution centre in Sanger, Texas, and was using the same technology, known as radio frequency identification, to track the goods as they are sent out to seven of its Super center stores in the Dallas Fort Worth region.

 

Radio tagging is intended to reduce theft, better match supplies to demand for particular products and speed distribution.  However, the technology’s supporters need to overcome concerns about its accuracy and cost, in addition to such economic questions.  Wal-Mart and the manufacturers are also confronting critics concerned about whether radio tagging will eventually allow retailers – or anyone with a radio scanner – to track what consumers do with products after they leave the store.

 

Products being tracked in the trial include personal care items from companies like Procter & Gamble and Gillette, Purina pet food from Nestle and 3 electronic devices from Hewlett-Packard.  The radio tags will be attached to cases and pallets of the goods in most cases so that the individual products, which will be unpacked at the stores, will not have tags when they reach the shelves.  Nevertheless, two models of Hewlett’s Photosmart printer and a scanner are arrived at Wal-Mart’s distribution centre with individual tags, which will remain on their packaging in the stores, Wal-Mart said.  Wal-Mart said that it would not have any readers installed in the retail areas of the stores to track the tags once the electronic goods leave the storeroom.  In addition, the stores will provide pamphlets about the radio tagging that tell customers they are free to dispose of the tags once they have bought the products.

 

Wal-Mart said it hoped the technology would move into the front end of the store eventually.  If customers accept the tags as a successor to bar code scanning, Wal-Mart said, it could lead to benefits like faster checkouts, returns, and processing of warranties.  Unlike bar codes, radio tags do not have to be in the line of sight of a reader to be recognized.  They can carry far more specific information about the product than the standard bar code, and large numbers of radio tags can be read virtually simultaneously.

 

Privacy advocates are concerned because the radio signals can be detected through cardboard, a typical purse or even, in some cases, walls.  Wal-Mart said on Friday that the readers it was using at its distribution centre and storerooms work at ranges up to 15 feet.

 

The American government is becoming a big user of the new tags, too.  Last October, the Pentagon said it would require its suppliers to put tags on cases and pallets shipped to its warehouses.  It expects suppliers to have the technology working by January.  FDA wants drug manufacturers, distributors, and retailers to adopt the new RFID technology to combat counterfeiting.  Alien Technology says that its current production line can assemble 2 million chips a month.  By the end of this year, it will have a second-generation line, able to assemble 2 billion chips a year.  For orders of 1 million Alien Technology new sells its tags for 20 cents each.  As investment rises, prices should fall further.  Marks & Spencer has just extended a trial in which tags are applied to suits, shirts, and ties for men.

 

DNS ERP solution keeps track of inventory.  The advantage for such item-level tagging is that it allows retailers to monitor stock levels with more accuracy, and to order replacement goods at the end of each day to make sure that every size, style, and color remains in stock.

 


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