TECH TALK: Tech’s 10X Tsunamis: RFIDs: Silent Commerce

Weve all been through the experience. After a long flight, we wait at baggage claim, waiting it seems forever and wondering if the bags will arrive. We check different bags (because they all seem so alike). On especially bad bag days, the bags dont arrive (for a long time) and we go through the horror of imagining their loss! Wouldnt it be nice if bags could talk with our boarding pass, and send out alerts if (a) they werent on the same flight as us, and (b) when they are close to us as they make their way on the baggage conveyor belt. That day may be coming close, thanks to a technology called radio frequency identification (RFIDs).

RFID systems consist of smart tags and reader devices. The tags send out radio frequency signals, which can be picked up in a short range by readers. Unlike bar codes which can carry very limited information, smart tags can store and broadcast object-specific information, giving each item its own unique identify and history. This aspect of RFID systems is creating applications which may today seem like science fiction, but will quickly become reality.

Glover Ferguson, writing in Harvard Business Review (June 2002), provides some examples:

  • Star City Casino has sewn RFID chips into all of its 80,000 garments to eliminate losses and laundry bill discrepancies.
  • Seagate, which produces tens of thousands of media discs each day, uses RFID to track each disc through the manufacturing process, with each read-write tag including a production checklist customised to the disc type.
  • Ford uses RFID tagging to track inventory and better manage the assembly process at its Ontario plant. The key is the smart tags ability to capture new data on the fly something a bar code cannot do.
  • IBM ships smart-tagged motherboards on its laptop and desktop computers, enabling customers to track the computers within their facilities and automatically disable any that are illegally taken offsite.
  • At the Yokohama Stroke and Brain Center in Japan, Alzheimers sufferers and patients impaired by head injuries carry RFID-encoded identity cards to keep them from wandering into dangerous areas.
  • Movie Gallery, a video and DVD rental chain, has used smart tags to cut inventory-taking time from eight hours a day or two.
  • Gap is sewing smart tags into individual garments to track clothing as it is delivered into a store, shelved and sold.

    Another example comes from the New York Times (July 7,2002): Millions of motorists in the Northeast have discovered the convenience of E-ZPass, which lets them move quickly through toll stations as electronic readers automatically deduct their fees. The system has become so popular that the consortium of states that operates the technology has increased its projections for its use to 53 percent of vehicles, from 35 percent. The paper also talks about SpeedPass, which lets customers pay for gasoline and convenience-store products at Exxon and Mobil service stations.

    The article says that RFIDs convenience is now opening it up to new uses in mobile commerce: RFID systems are much faster than other types of payment. There is no fumbling through a wallet, no punching in personal identification numbers, no signatures and, most certainly, no Web browsing. All that is needed is a tiny device called a transponder that might hang on a customer’s key chain and is waved in front of an electronic reader like a magic wand.

    Tomorrow: RFIDs (continued)

    • Published by

    Rajesh Jain

    An Entrepreneur based in Mumbai, India.