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Nashville Business Journal - October 6, 2006
by Roy Moore
Nashville Business Journal
70-year-old technology meets the microchip and the introduction has broad implications
Radio frequency identification is changing the way businesses operate, speeding inventory passthrough and altering the inventory logistics landscape.
Rooted in technology 70 years old, RFID, as its known, has come to the forefront in recent years because microchip technology has made its deployment cost-effective. The occasion hasn't escaped Wal-Mart or the federal government for that matter. Both are embracing the convergence of the two technologies decades apart as a way to eliminate costly supply chain bottlenecks. In the process, they have launched an RFID revolution.
The most common RFIDs are passive tags – basically tiny, microchip-based targets. When their antennae are hit with an incoming radio signal, the signal provides just enough energy for their microscopic circuitry to power up briefly and transmit a response.
At libraries, the response can trigger an alarm, notifying personnel that someone may be leaving with a book that hasn’t been checked out. For cars with a window-mounted transponder imbedded with an RFID tag, the response raises a gate, signifying a toll has been paid.
For Wal-Mart, the world’s largest retailer, the technology means getting the right item to the right place, right on time-and the potential for savings millions, or likely billions, of dollars in the process.
Checking items in instantly via imbedded RFID chips eliminates the time it takes to individually check them in using a barcode scanner. Wal-Mart officials are reporting more accurate inventory controls and, subsequently, higher “in-stock” ratios in stores where the technology’s used.
John Menzer, Wal-Mart’s vice chairman of U.S. operations, underscored the impact products availability has on the bottom line. Speaking at an analyst meeting in June, he said when an item’s out of stock, customers are forced to look elsewhere – often to a different store or a different product – meaning Wal-Mart and its suppliers potentially lose business. |
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