Radio Frequency Indicator Tags (RFID) relies on memory chips equipped with tiny radio antennas, which can be attached to objects to transmit streams of data about them. That data needn’t be encyclopedic — an advanced chip’s capacity is 2 kilobytes, enough to encode a serial number, where and when the product was manufactured, and a bit more — but the RFID tag obviates the need for bar-code scanning. That opens up worlds of possibilities. Supply-chain specialists see RFID as the backbone of an infrastructure designed to identify and track billions of individual objects all over the world, all in real time.
Wal-Mart is investing heavily in RFID tags with an eye toward dramatically reducing supply-chain management expenses, trimming inventories, cutting theft, and eliminating misdirected shipments.