March 2001

Beyond the Bar Code

High-tech tags will let manufacturers track products from warehouse to home to recycling bin. But what's great for logistics could become a privacy nightmare.

By Charlie Schmidt

It's 2010, and an ordinary day on an assembly line. A bottle of root beer gets stamped with an innocuous little tag that immediately begins sending messages into cyberspace. The tag radios the soda company's Web site to report the bottle's whereabouts, allowing computers to track the bottle as it moves from the factory, through warehouses and distribution centers, and into a refrigerator at a corner drugstore. When the bottle is sold, the manufacturer is alerted and makes a new one to take its place. Finally, facing reincarnation at a recycling plant, the bottle radios its "last words" to a robotic separator that lifts it from a pile of plastic and newspaper and tosses it into a container of broken glass.

Manufacturers hoping to recoup some of the billions lost every year to theft, counterfeit, and depleted stocks have been closely watching a technology that promises to track the locations of individual products, from perfume bottles to car parts, in real time. At the heart of this scenario is a little device called a "radio frequency identification tag"-a silicon chip that boots up and transmits a signal when exposed to the energy field of a nearby reader. The ultimate goal is to put a radio tag on virtually every manufactured item, each tracked by a network of millions of readers in factories, trucks, warehouses and homes, transforming huge supply chains into intelligent, self-managing entities. Dick Cantwell, vice president of global business management at Gillette says that the devices for reading the tags are "going to be a ubiquitous part of construction, whether you're building stores or homes....We see this as a tremendous opportunity and we intend to make full use of the technology as it becomes available."

The radio tag has been around for more than half a century, largely relegated to specialized industries. Some of its first uses were for tracking livestock and government freight-train cargo; today highway tolls throughout the United States and abroad are outfitted with readers that pick up signals from a tag in your car as you drive by. Insiders in this field believe the technology won't blanket the consumer market, though, until someone produces a radio tag costing in the neighborhood of a penny-an assumption that has sent engineers back to the drawing board.

When the penny barrier is finally broken, manufacturers hope to use these tags as a next-generation bar code linking manufactured items to online databases containing product-specific information. Steve Halliday, vice president of technology at AIM, a trade association for manufacturers of tagging technology, says, "If I talk to companies and ask them if they want to replace the bar code with these tags, the answer can't be anything but yes. It's like giving them the opportunity to rule the world."