IBM Launches RFID Service

Big Blue packages consulting, implementation and specialized software for product tracking and inventory control via the wireless technology.

IBM Corp. on Monday launched a new service to boost the use of radio frequency identification (RFID) among retailers and manufacturers.

The service provides a combination of consulting, implementation services and specialized software to provide companies with advanced product tracking and inventory control through the use of RFID.

"IBM believes RFIDs time has come," said Faye Holland, worldwide RFID leader at IBM Global Services, in a statement.

Armonk, N.Y.-based IBM made the announcement at the Electronic Product Code Symposium in Chicago, the first conference held by The Auto-ID Center, a group of 100 corporations and six major research universities such as the Massachusetts Institute of Technology promoting RFID for product tracking. RFID this year has gained a spotlight after the worlds largest retailer, Wal-Mart Stores Inc., said in June that its 100 largest suppliers need to implement RFID for use in cases and pallets by 2005.


Take an in-depth look at Wal-Marts plans for RFID.

Through RFID, manufacturers could embed an RFID tag with a miniscule computer chip and antenna into products to better track their movement through the supply chain. The tags, often inactive themselves, respond with identification information when radio waves are sent to them from transmitters that could be in a store or warehouse.

IBM said its new services will make use of a retailers existing back-end inventory system and be based on IBMs WebSphere Business Integration software running on WebSphere Application Server, DB2 Information Integrator, Tivoli Access Manager and the WebSphere Portal Server.

The service provides three major phases to an RFID project. In the first phase, IBM would provide consulting and help develop the business case for the technology. A 12-week pilot would follow in the second phase. The final phase would be a full roll-out of an RFID system.

One of the biggest selling points for RFID, according to IBM: reduced costs. Retailers could save billions of dollars each year by reducing theft and cutting inventory through using computers to trace products from a warehouse to store shelves, the company said.

RFID is providing a huge opportunity for various industries, particularly consumer and packaged goods, wrote AMR Research Inc. analyst Scott Lundstrom in a recent report entitled "RFID Will Be Bigger Than Y2K." While it will affect companies dramatically over the next 10 years, most are just beginning to figure out how to use the technology.

"Think of this as the Y2K problem as seen from 1993," he wrote. "While we expect the eventual market to be substantial, the high growth and adoption of the technology being hyped today is at least several years in the future."

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