Smart tags open up new opportunities

Radio frequency identification smart tags move us one step closer to an automated supply chain.

The completely automated supply chain is one of those IT holy grails that seems further off the nearer you get.

But radio frequency identification (RFID) smart tags seems to offer one of the missing links: the means to dynamically track a product through its lifecycle.

The decision of a global brand such as Gillette to back the technology will further boost its credibility. The company plans to deploy up to 500 million smart tags.

It's a substantially larger trial than the one announced by Marks & Spencer in November, which will see the implementation of 3.5 million tags on its returnable food produce delivery trays.

The retail sector will make the early headlines, but smart tags will be much more than a front-of-shop barcode replacement.

Vendors promise a variety of applications, mainly revolving around stock maintenance and control (no more 'out of stock', or 'out of date' products) and theft prevention.

Rather than relying on barcodes, which need to be physically scanned by a human operator, smart tags are automatically scanned by readers. As this happens via radio, tagged items don't have to be in sight to be scanned.

This opens up a range of improvements, especially in mass-volume businesses such as retailers and logistics firms.

But before widespread market uptake is achieved, the familiar IT industry barriers must be overcome. Put simply, the tags are too expensive and there are no clear industry standards.

Smart tags still cost anything up to 50p each, a sum that looks worse because a barcode is effectively free.

To make them affordable for mass use, the tags need to drop to about 5p. Price reductions of that level require huge orders, hence Gillette's monster trial.

Getting the price right needs to go hand-in-hand with global standards that win the confidence and trust of business and customers.

The Auto-ID Center, which brings together bright thinkers from the Massachusetts Institute of Technology in the US and the UK's Cambridge Institute for Manufacturing, is trying to set an electronic product code (EPC) standard.

Embedded in a smart tag, the EPC acts as the unique identifier for an RFID unit, allowing automatic identification and providing a means for identifying and monitoring physical goods.

Few doubt the potential gains from smart tags. Many retailers are excited about the prospect of 'smart' shelves that inform inventory systems when they need to be replenished, and till points that automatically scan and invoice all the items in a customer's trolley.

Even more interesting is the possibility of tracking an individual product through its entire lifecycle.

Next month, Nokia will demonstrate its prototype RFID-based tracking system for its mobile phones. It will track the company's products through the distribution cycle, providing detailed management information, and will provide phones with better protection from theft.

The Auto-ID Center's vision for smart tags is more ambitious than simple supply chain mechanics; it hopes to create a universal environment in which computers can automatically identify and interact with physical items, without any need for human intervention.

While this vision is a long way off, Gillette's announcement shows that widespread RFID acceptance is a lot closer.