An old technology on the cusp of rapid adoption has businesses extolling its money-saving benefits and consumer advocates shuddering at the potential for privacy invasion.
The technology is radio frequency identification. Promoted as the successor to bar codes, an RFID is an electronic tag that emits information via radio frequency and can deliver detailed product information to computers. Think of it as LoJack to locate inventory instead of stolen cars.
While created more than 30 years ago, the electronic tags are reaching the point of being highly practical to use. Performance has improved, costs have fallen and more retailers are demanding suppliers to adopt the technology.
Corporate efficiency
Corporations, particularly those in retail, want a world where they can immediately locate thousands of pallets of merchandise in warehouses. When accounting errors are responsible for up to two-thirds of annual merchandise losses in the retail industry, using the electronic tags is a way to recover that cost and reallocate workers to more productive tasks, said John Simley, a spokesman for Home Depot Inc. in Atlanta.
"There's no more army of people running around wondering where a pallet went," said Simley. "We would rather have more people on the floor than looking for where 12 lost widgets are."
Better than bar codes
Wal-Mart is one retailer pushing for rapid adoption. It is asking its top 100 suppliers to deliver RFID-tagged pallets and product cases by 2005. Procter & Gamble and Gillette Co. are among the consumer product manufacturers testing the technology.
"It's a great improvement over the bar code," said Andrew Fano, a senior researcher at Accenture Technology Labs in Chicago. "It identifies a unique item, not just a category. And you don't need a line of sight."
Yet consumer activists wonder just how long before the electronic tags leap from supply-chain technology to direct-marketing tools that provide insight into purchasing habits.
"Think about how easy it is to undo everything you've done to protect your privacy," said Katherine Albrecht, a consumer advocate who opposes supermarket loyalty programs - where purchases are tracked in exchange for presenting bar-code tags - and pays for everything with cash. "I think this technology is so extraordinarily dangerous because of its potential for abuse."
