CHICAGO – Retail giant Wal-Mart Wednesday threw its weight behind a plan to create an industry standard for embedding tiny radio transmitters into product labels and tags.
The technology, called radio frequency identification (RFID), is already used in highway toll collection systems, and can tag everything from luggage to livestock. It’s being tested by a growing number of the biggest retailers, including Wal-Mart. But all current implementations are proprietary, frustrating efforts to track items like paper towels, diapers, and soft drinks from manufacturing to checkout.
The heart of any RFID system is a tiny microprocessor and radio, along with a thin flexible antenna. These components can be embedded in a label, pressed between layers of cardboard in boxes. When the label or box passes by a reader device, which emits a radio wave, the RFID components “wake up” and sent the unique identifier number for that label.
At a presentation here Wednesday, the nonprofitUniform Code Councilunveiled steps to transform RFID into a retail industry standard. The industry group perhaps is best known for creating the Uniform Product Code (UPC) that now appears as a barcode sequence on almost every item sold anywhere. Adopting a similar approach for RFID, the council has proposed creating a new “Electronic Product Code,” which will become the retail industry’s standard implementation of RFID.
“This absolutely has to be a [retail] industry initiative,” said UCC Chief Operating Officer Michael Di Yeso. “Everybody has to show up for the game, and everybody has to be ready to play.”
The council helped launch last month an outfit called Auto-ID Inc., to bring together leading retailers and technology companies in hammering out the EPC details, starting this summer. Sharing a podium with Wal-Mart CIO Linda Dillman, Di Yeso called on audience members to join Auto-ID in time for its first meeting in July. Defining a standard will take place over the next 12 to 18 months, and eventually will be passed to official international standards bodies.
The council plans an extensive demonstration of RFID at the EPC Symposium next September in Chicago.
“To move forward, this [standards push] is going to take all of us,” said Wal-Mart’s Linda Dillman. “We believe very strongly in the future of this technology.”
That belief is based in large part on Wal-Mart’s RFID tests. By being able to track pallets or cases of items, Wal-Mart expects to be cut what are known as “out-of-stocks” – empty store shelves and their attendant lost sales. Inventory counts will be more accurate, and pallets will be able to move faster through shipping and receiving.
Based on these tests, Dillman unveiled a timeline that will move Wal-Mart toward a limited first use of RFID by January 2005. Many of the details are still being worked out, she said.
By late this year, the company plans to evaluate commercial tag readers that comply with the emerging Electronic Product Code standard. “We won’t implement anything that’s proprietary,” she said.
In that same period, Wal-Mart will start talking in more detail with its suppliers about its RFID plans. The initial focus will be on Wal-Mart’s biggest suppliers. Dillman said implementation of reader networks, applications and other elements will start in 2004. Initially, Wal-Mart will focus on tagging and tracking pallets and cases.
Dillman cautioned listeners that crafting the standard, and then implementing it, will have to jump a number of hurdles, including interference caused by nearby wireless LAN transmissions, fears by some consumer groups that RFID will compromise privacy for customers, and the high cost of RFID tags, currently about 30 cents each.
Copyright © 2003 IDG Communications, Inc.