March 2001

Beyond the Bar Code

Continued from page 2

By Charlie Schmidt

Two Steps Forward

While Eberhardt's work moved the field closer to the penny tag, one lingering issue is whether low-cost tags will have a long enough range to make them practical. The range of Motorola's tag, for example, is limited to slightly more than a centimeter. Painting the antenna over an entire box extends the range to about 60 centimeters, but this won't help much on something as small as a can of tuna fish. Higher-cost tags, like Intermec's inductive tag, can transmit signals up to five meters but at a price beyond the reach of the typical consumer market. Echoing industry sentiments, Winston Guillory, vice president of the tag's business unit at Intermec, predicts that short-term applications will probably be limited to warehouse, rather than retail, management. And as for the penny tag, Guillory admits to a certain skepticism. "You hear all this talk about it," he says. "But it's never been delivered."

Despite the skepticism, many companies are in hot pursuit of the penny tag and its glittering potential payoff. Steve Van Fleet, International Paper's program manager for e-packaging, says the technology will benefit his company's clients by eliminating the "shrinkage" due to lost, stolen or spoiled goods that consumes three to five percent of everything they make. Last year, International Paper partnered with Motorola to use their radio tag on some of the 8.6 million metric tons of corrugated crates, boxes and other packages the paper company makes annually. Explains Van Fleet, "Say I have 5,000 cases on a truck that's supposed to be going to Cincinnati, but the driver goes to St. Louis and diverts 1,000 cases to the black market. Without the tags, we have limited visibility to detect this. But if we put readers in the truck, I can inventory these cases remotely using geographic information systems software on a laptop."

In addition to reducing shrinkage, such identification technology could help companies create a more realistic picture of how their products move through the supply chain and into the world. At Gillette, for example, sales information is transferred across warehouses, distribution centers and retail stores in batches by telephone, fax or e-mail. Since the information isn't matched with demand in real time, manufacturers often get stuck making too little, then too much, product in an attempt to keep up with the market. Economists call this the "bullwhip effect."