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In the past two years, radio frequency identification tags-silicon chips that carry ID numbers that can be read by computerized radio scanners-have become cheap and tiny enough that such retail behemoths as Wal-Mart are implementing them to track cases of products from warehouses to stores. But makers of these tags aren’t keeping good track of each other, making different kinds of tags and readers that aren’t all compatible, slowing their widespread adoption.

The tags’ communication woes could soon end, however. This fall the Auto-ID Center, an international corporate and university consortium headquartered at MIT, will announce the first hardware and software standards for such tags and their readers. These standards should greatly facilitate the use of the tags by, for example, allowing one reader to be used with different tags. In turn, says David Brock, codirector of the Auto-ID Center, wider adoption of the tags should slash costs from spoilage, theft, and miscounts. “It will be a revolution in the supply chain,” he says. “You can see where your items are at any time.”

In preparation for the new standards, companies are gearing up to produce readers and tags-which range in size from postage stamps to postcards, and cost as little as 10 cents apiece. Earlier this year, Alien Technology in Morgan Hill, CA, announced that Gillette would buy 500 million tags. And this summer, Wal-Mart-the world’s largest retailer-announced it is requiring 100 suppliers to put tags on all pallets of merchandise by 2005. With stores like the Gap, Target, Home Depot, and U.K.-based Tesco and Marks and Spencer making trial runs, radio tags are ready to make tracks.

Players in Radio Frequency Identification
COMPANY TECHNOLOGY/STRATEGY
Alien Technology
(Morgan Hill, CA)
Cheap, mass-produced tags; 500 million sold to Gillette
Matrics
(Columbia, MD)
Fast, reliable tags and readers for high-volume tracking; used in supply chains for consumer goods
Royal Philips Electronics
(Eindhoven, the Netherlands)
Tags used at the European retailer Metro Group
ThingMagic
(Cambridge, MA)
Universal tag readers

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