Part 4: The Software Conundrum

Computerworld - Even if all the tag and reader issues are worked out, simply slapping tags on pallets, cases or individual products and installing readers won't produce the real-time flow of data that retailers and suppliers need to gain the full benefits of RFID technology. RFID is going to change business processes so fundamentally that users will have to either install new, possibly experimental applications or endure a massive rewrite of existing programs, warns Gartner's Jeff Woods.

"I don't see anything [happening] with RFID-centric warehouse management or manufacturing, or even retail processes," he says. "It's a classic innovators' dilemma, because everyone is so heavily invested in bar-code-based infrastructure and processes that they are the least likely ones to make the wholesale transition quickly."

The first applications will emerge in the next two to three years, Woods says. Emerging vendors, such as OatSystems Inc. in Watertown, Mass., are working on the problem, as are established vendors such as Manhattan Associates Inc., SAP AG and IBM.

"Through 2007, we're going to see primarily applications that use RFID tags in the context of bar-code-based processes—things like receiving at the back door with an RFID tag instead of a bar code," Woods predicts. "It's the three-to-seven-year time frame when we will start to see entirely new processes come about."

The Auto-ID Center's response to managing the flow of data is special-purpose server software, called a Savant, which it predicts will be running in stores, distribution centers, offices and factories. Savants will gather, store and act on information and interact with other Savants, deciding which information needs to be forwarded up or down the supply chain, the center claims.

Under the Auto-ID Center's proposal, RFID tags will contain a limited amount of information in a 64- or 96-bit electronic product code (EPC). The reader pulls the EPC from the tag and passes it to a Savant, which in turn forwards it to an Object Name Service server and then a Physical Markup Language server on a local network or the Internet to find information stored about the product. The Savant can then retrieve the file and forward it to the company's inventory or supply chain applications.

"The Auto-ID Center moved the problem of data from the tag into the system," says Steve Halliday, president of High Tech Aid in Gibsonia, Pa. But he predicts that some companies will want tags that can store more data so they can find out the contents of pallets and cases on the spot where the tags are scanned, rather than having to connect to a Savant and other servers.