RADIO ID TAGS TO MAKE BIG WAVES
By BEN SILVERMAN
WHILE techies are always looking for the new new thing, it's actually a decades-old technology - called Radio Frequency Identification (RFID) - that may begin to dramatically reshape American lives in 2004.
It will allow companies such as Wal-Mart to gather information and track everything from livestock to a soda can. And while RFID has been much discussed in the technology trade, it wasn't until the recent mad-cow scare that the technology generated more mainstream buzz.
The RFID technology is simple: a small "tag" that transmits a radio frequency is placed on an object or living being, so that scanners or other devices can track the tag. Such RFID tags can be small enough to put on a candy bar, but can track objects as big as an aircraft.
Traditionally, RFID has been relegated to second-class technology standards, used mostly by ranchers to track livestock (though not extensively enough to prevent the recent mad-cow scare).
As 2004 begins, however, at least one company is pushing RFID away from its seemingly mundane uses. Wal-Mart, the nation's largest retailer, is requiring its top 100 suppliers to put RFID tags on all pallets and cases delivered to the company by January 2005. Wal-Mart will use RFID to better track its supply chain.
For Wal-Mart, using the technology will increase efficiency, but for suppliers it will increase costs.
Last January, Gillette jumped into the fray and placed an order for a half-billion RFID tags, reportedly for 10 cents per tag. With a market cap of more than $37 billion, Gillette can absorb the RFID costs, but smaller companies may find their bottom lines hurt as they absorb the cost.
Wal-Mart is not alone in pushing a new RFID standard. The Department of Defense announced in October that suppliers must attach RFID tags to products delivered to the military by January 2005. Everything from boots to bombs is covered by the new policy.
One of the main hindrances has been a fear of Big Brother-like snooping. So RFID proponents are stepping up lobbying efforts in a bid to have the technology designated an anti-terrorist application - arguing that the need to protect the food chain, for example, supercedes privacy concerns.
A number of public companies could reap the benefits of increased RFID use. Texas Instruments, Alanco Technologies, Parlex and Phillips Electronics are among the players that manufacture RFID tags and readers.
But it will be the government and retailers that push the pace - and with the 2005 deadlines approaching, 2004 is shaping up to be a big year.
*Please send e-mail to:
bsilverman@nypost.com
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