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Radio Frequency Identification
RFID...Coming of Age
 June 2004
 
Radio Frequency Identification (RFID) is a sys-tem that facilitates the tracking of objects,primarily for inventory tracking, via a three-part technology comprised of a reader, atransceiver with decoder and a transponder (RF tag). RFID is a wireless system that worksin conjunction with an organization’s infor-mation technology infrastructure to improvebusiness processes such as inventory man-agement and efficiency in supply chain man-agement.
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History
 The development of RFID was spurred by the need to enhancetracking and accessapplications in the 1980’sin manufacturingand other hostile environments. This non-contact means of gathering and trackinginformation proved to be resilient. RFID isnow an established part of specific busi-ness processes in a variety of markets
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How RFIDworks
 The reader emits a radio signal that activatesthe tag and reads and writes data to it. Asproducts are shipped, received or stored,the information (encoded on a bar code-like tag) can be read and received by thereader, which is attached to a computer.RFID has been integrated into the EPCglobalnetwork and uses the EPC (ElectronicProduct Code). The EPC is a unique number that identifies a specific item in the supply 
 What is Radio FrequencyIdentification
2chain. The EPC is stored on a RFID tag, which combines a silicon chip and a reader.Once the EPC is retrieved from the tag, itcan be associated with dynamic data suchas the origin of an item or the date of itsproduction. Much like a Global Trade ItemNumber (GTIN) or Vehicle IdentificationNumber (VIN), the EPC is the key thatunlocks the power of the information sys-tems that are part of the EPCglobalNetwork 
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EPCglobal andRFID
EPCglobal is a joint venture between EANInternational and the Uniform Code Council(UCC). It is a not-for-profit organizationentrusted by industry to establish and sup-port the EPC Network as the global stan-dard for immediate, automatic, and accu-rate identification of any item in the supply chain of any company, in any industry, any- where in the world. EPCglobal’s objective isto drive global adoption of the EPCglobalNetwork.EPCglobal is also an organization that isleading the development of industry-drivenstandards for the Electronic Product CodeNetwork. This network supports the use of RFID in today’s “fast-moving, information richtrading networks. EPCglobal is a member driven organization of industry participantsthat is creating global standards towardsproviding efficiency gains in supply chainsand relationships with trading partners.
 
 The EPCglobal Network was developed by the Auto-ID Center, an academic researchproject headquartered at the MassachusettsInstitute of Technology (M.I.T.) with labs atfive leading research universities around the globe. The EPCglobal Network is a set of technologies that enable immediate,auto-matic identification and sharing of informa-tion on items in the supply chain. In that way, the EPCglobal Network will makeorganizations more effective by enablingtrue visibility of information about items inthe supply chain.
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RecentDevelopmentsin RFID
 Wal-Mart, the world’s second largest com-pany, is deploying RFID technology in itsstores. “Wal-Mart is positioning itself at thefront of an inevitable technological revolu-tion, even if it means dragging others into afuture they’re not sure they want,” saidDillman, Chief Information Officer, Wal-Mart.
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Furthermore, Dillman states, “I had no idea we’d get a reaction like this.But the fact that this is happening in publicdoesn’t change our focus on making sure ithappens.” Dillman is referring to someresistance from consumer advocates whoare concerned about privacy issues andsuppliers who are concerned about the fair cost for their end of the technology – theRFID tags. The Department of Defense is embracingthis emerging technology as well. “TheDefense Department recently announced it would require its suppliers to use wireless3tags based on radio frequency identification(RFID) technology by January 2005. Thepolicy calls for Defense Department suppli-ers to put RFID tags on the ’lowest possiblepiece‘ - each part, case or pallet, for exam-ple - and pertains to all items except bulk commodities such as gravel. The goal is bet-ter inventory management through faster,hands-off processing.” The Department of Defense purchases not only just multi-milliondollar military equipment, but over $20 bil-lion dollars in consumer products and isseeking to make the supply chain more effi-cient.
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Companies like Microsoft, IBM, and PhilipsElectronics, which recently made productenhancement announcements in this area,are also participants in the industry. “IBM, in Armonk, New York, and Philips, in Amsterdam, will team on RFID for supply chain management, retail and asset manage-ment, as well as smart card technology for finance, e-government, transportation andevent ticketing.” the company said. “As partof the joint effort, IBM Global Services willbuild an RFID system for use in for Phillips’semiconductors facilities for manufacturingand distribution in Taiwan and Hong Kong.”7
Efficiency Gainsfrom RFID
 As mentioned above, large organizations,such as the Department of Defense, arelooking to improve their supply chain man-agement and reduce labor, errors, and han-dling costs.
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