Radio Frequency Identification Technology

What is Radio frequency identification (RFID) technology? RFID is a wireless communication technology that provides users to identify tagged objects or people. RFID is is also becoming a cost-effective and widely use technology. This is because the efforts of Wal-Mart and the Department of Defense (DoD) planting RFID technology into the supply chains. In 2003, these Giants started enabling pallet-level tracking on their inventory, Wal-Mart set a rule for an RFID mandate requiring their top suppliers to begin tagging pallets and cases, with Electronic Product Code (EPC) labels. Also, at the same time DoD quickly followed and issued the same expectation to its top 100 suppliers. This drive to incorporate RFID technology into their supply chains is motivated by the increased goods shipping, good receiving and stocking efficiency and the decreased costs of storage, labor, and product loss that pallet-level visibility of the inventory can offer.

Wal-Mart and also the DoD mentioned here are, actually the world’s giant retailer and the world’s giant supply chain operator. Due to the size of their operations, the RFID rules are spurring growth in the RFID industry and bringing this new and emerging technology into the market. Obviously, the costs of employing RFID are falling as a result of the mandates also, as an economy of scale is realized. Lastly, the standard appears to have united the industry behind a single technology standard (Electronic Product Code standard). With the lack of industry understanding and consensus over the standards issue had been impeding industry growth prior to the issuance of the mandates. DoD and Wal-Mart alone cannot account for all the current interest in RFID technology. However. Given the rapid forecasts of industry growth, it becomes clear that RFID has begun attracting the notice of a wide range of industries as well as government agencies.