RFID and commercial applications

Facing increasing resistance and concerns about privacy, the United States' largest food companies and retailers are trying to win consumer approval for radio identification devices by portraying the technology as an essential tool for keeping the nation's food supply safe.

Certain companies are making a concerted effort to have the Department of Homeland Security designate radio frequency identification, or RFID, as an antiterrorism technology.

In addition, they are asking members of Congress and other influential figures to portray RFID as a good system to have now and to expand into the future.

Companies like Procter & Gamble, Wal-Mart, and Johnson and Johnson see RFID technology as a superior way of keeping track of their products. By implanting tiny radio transponders in their product packaging, the companies can instantly track their goods from factory floors all the way to retailers' warehouses. In addition, more retailers can get a 100 percent accurate inventory of products on their shelves instantly with RFID readers. Taking inventory without RFID currently involves countless hours of overnight work usually with inaccurate results.

Experts estimate commercial companies could save billions of dollars each year in inventory and logistical costs with RFID. The problem is that privacy advocates see RFID as a massive invasion of privacy. They say the technology would let retailers, marketers, governments, or even criminals scan people (or even their houses) and determine what they own. The technology hasn't been rolled out widely yet, but it is already causing controversy. Earlier this summer, Wal-Mart caved to protests and pulled radio-tagged items out of a store in Brockton, Massachusetts.

To win the hearts and minds of consumers, retailers; such as, food and drug companies, may portray the technology as an antiterrorist tool. They say the technology can help them keep precise track of all goods and help in recall efforts should their products be contaminated or laced with poison during a terrorist attack.

"We have been working with legislators to make sure the right regulations are in place to make RFID tags commercially feasible," said Stephanie Childs, a spokeswoman for the Grocery Manufacturers of America, which lobbied on behalf of the food and drug companies and retailers.

Not all legislators on Capitol Hill are buying into RFID tags, especially when they see companies playing the terrorism card to gain acceptance for the technology.

Some companies, retailers, and government organizations are determined to utilize RFID, asap!

While analysts say radio-frequency identification tags don't work well enough to replace UPC codes, and costs are still too expensive, some technology companies, retailers and government groups remain determined to infuse RFID into daily consumer life.

"We are at an incredibly early stage of this technology and what it is actually capable of doing. All the promise of real-time supply chain visibility is just that. It's promise," said IDC analyst Christopher Boone, according to a Reuters report.

Low reliability and high costs aren't stopping Wal-Mart, the world's largest and most influential retailer, and the Department of Defense from pushing their hundreds of suppliers to use the technology, suggesting the tags could see wider adoption in the next few years.

With the ability to track everything from cases of razors to a car passing through a toll booth, analysts say the electronic tags are to this decade what the Internet was to the 1990s; a promise of radical change in the way business is done.

The tags use low radio frequencies to transmit data about items or locations, enabling companies to better manage inventories, replenish supplies and cut costs. Tagging items could create a more efficient way of doing business.

Companies lining up for a piece of the action include venture capital start-ups that make radio frequency identification tags; such as, technology service giant IBM, who wants to show corporations how to use them.

For tags to be more widely used, analysts say the price must drop to under 5 cents each, which would happen only with higher volume.

Amid all the hype, companies are looking at real deadlines. Wal-Mart and the Department of Defense have set January, 2005, as the date for use of RFID technology by their suppliers.

RFID tags fall far below the 99 percent reliability rate of UPC tags because of the difficulty of transmitting clean radio signals. At 20 cents to 30 cents apiece, plus the cost of altering packaging lines to accommodate them, the tags are too expensive for most companies to use; also, there are not enough RFID chips to supply the current demands for RFID.

The technology is so far from being ready, analysts say, that some companies may not last long enough to reap the benefits, as was the case when UPC codes were introduced in the 1970s.

"Radio frequency has some limitations. It cannot be read through liquid ... or through metal. If you have nylon conveyor belts it causes RF noise. We don't know what happens when you shrink wrap this stuff," said Kara Romanow, a senior analyst at AMR Research.

Privacy issues could hinder RFID expansion

There are privacy issues. Civil liberties advocates fear that, under the guise of protecting national security, RFID could be used to invade peoples' privacy by monitoring their activities.

One storm of controversy developed when Tesco, a grocery retailer in Cambridge, England, reportedly photographed customers removing Gillette razors from the shelves.

Efforts to use the technology for inventory management in places like libraries and supermarkets have met resistance from groups who are concerned the tags will link consumers with purchases to develop customer profiles.

List of Radio Frequency Identification or RFID articles.