Analyst sees RFID as complementary to bar coding

RFID systems are part of a family of auto-ID technologies. However, unlike its bar-code brethren, RFID tags don't require "line-of-sight" access or proper alignment of the bar code to the scanner.

"In fact, RFID tags require no specific orientation," says Bruce R. Hudson, program director at META Group, a Stamford, Conn.-based IT research and advisory firm. "Indeed, the tags could be located inside a box and still respond to the scanner."

That's because RFID systems, as the name suggests, rely on radio waves to transfer information. A system consists of three basic elements. First is the transponder, made up of a memory chip and an antenna.

Second is the reader/scanner that remotely scans the RFID tags and captures the encoded data. Finally, there's the software that prepares the data for use by other applications.

While many manufacturers see RFID is not necessarily a bar-code replacement, "We suggest you implement RFID as an addition to other auto-ID technologies, not as a substitute," Hudson says. "Why tag a 99-cent bag of chips with a 10-cent RFID tag? On the other hand, it's clear that tagging cases and pallets can improve inventory control."

Look for ever-broader applications in the supply chain.

"The tags are relatively immune to water or dirt, which makes them ideal for harsh environments," says Hudson. "Plus, they can be reprogrammed in use, which allows them to carry updated information. In addition, other information such as time, location, or temperature can be added to the data transmitted by the chip—yielding a rich description of the object."