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RFID Drives Inventory Management Evolution, Business and Industry Trends Analysis

The biggest technology breakthrough in inventory management is RFID (radio frequency identification)—the placement of microchips in product containers, cartons and packaging, combined with the use of special sensors in warehouses, hand-held scanners or store shelves that alert a central inventory management system as to shipment arrivals, product purchases and the need to restock inventory, communicating via wireless means.  From loading docks to cash registers to parking lots, RFID readers have the potential to wirelessly track the movement of each and every item of inventory.  Bar codes will be replaced by Electronic Product Codes (EPC), which are stored in RFID microchips.  In retail stores, the chips could even eliminate the need to scan each item at checkout.  Checkout stations will be equipped with receivers that automatically calculate purchases of an entire cart of merchandise at a time, rather than each individual item.  These systems can lead to reductions in shoplifting and the elimination of costly manual inventory counts.

Leading suppliers of RFID equipment include:

     Another potential advantage of RFID is that manufacturers and distributors are able to reduce overall inventory, thanks to greater supply chain efficiency.  Walmart is heavily invested in this new technology.  The greatest advantage of RFID implementation in stores such as Walmart may be a reduction of out-of-stock situations.  The ability to keep popular items properly in stock means higher revenues.
At MIT, experts are endeavoring to enhance RFID systems by continuing work on a project originally called the Auto-ID Center.  Now called EPCglobal, the initiative is backed by more than 50 companies including Walmart, Procter & Gamble and Coca-Cola.  (See  The project developed a common language for all RFID chips, thereby substantially reducing costs.  It is estimated that costs must fall to between one and five cents per chip for this new wave of technology to be universally adopted.  (Costs in actual commercial RFID use are between 5 cents and 15 cents per tag for typical volume purchases, according to the RFID Journal.)  EPCglobal has been at the forefront of design standards for all components of RFID systems, including electronic product codes for the tags and software to look after them.
Thinfilm is a Norway-based firm that uses printing to manufacture simple integrated electronics at a fraction of the cost of conventional electronics, in highly scalable processes compatible with high-volume, low-cost markets.  Thinfilm has integrated sensing, data storage and display in a label format.  The addition of a printed near-field communication (NFC) interface will allow Thinfilm’s sensor labels to link sensor data to apps on mobile devices and/or cloud-based analytics. 
Yet another breakthrough in technology is the result of efforts made by Telmex Lab for Communications and Development, also at MIT.  The lab has created a tiny dot called a Bokode that, while only 3 millimeters wide, can hold more than 10 megabytes of data.  The data can be read by the camera installed in most smartphones.
The next step in RFID may be a nanoparticle-based covert barcode system that can be embedded in a wide variety of objects from polymers to drugs to inks to explosives.  The nanoparticles are embedded during manufacturing and can be tracked by thermal analysis to follow the life of the object.  Practical applications may include document authentication, manufacturer and/or vendor identification and location verification.  Researchers at the Worcester Polytechnic Institute are studying the concept.
When fully implemented, advanced RFID and electronic sensor/monitor systems are more than mere inventory management systems.  They are able to track virtually every item made, from the factory to the freight container to the shipping line to the warehouse to the store, even from the checkout lane to the home.  They can even be used to sort recyclable items for reuse by the manufacturers, following the entire lifecycle of every product.

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