By Bob Violino

Oct. 6, 2003 - Like radio frequency identification, Web services have gotten a lot of press. Both technologies, however, have only just begun to prove their business value. Ironically, these two highly promoted technologies might achieve their full potential only when they are married to each other. Experts believe that together they could play an integral role in managing information in future supply chains. Even today, companies that provide supply chain and RFID products are exploring ways that Web services can help maximize the value of information generated from RFID systems.

Web services are middleware based on the Extensible Markup Language (XML), which is used primarily for business-to-business e-commerce applications. Typically, Web services are bits of reusable code that allow two or more Web-based applications to communicate with each other. The code can be used with older applications or to build new ones. Web services can let Web-based applications from two different companies share data, or let one company perform operations, such as calculations and database searches, on another company’s computer remotely over the Internet. Rather than granting a business partner direct access to its databases, a company can employ a Web service that allows others to access a restricted part of its data or perform only specified operations or queries.

Currently, all companies find it cumbersome to share information and conduct automated transactions with suppliers. Many companies still place or take orders by phone and fax instead of electronically by computer. Electronic data interchange (EDI) is common among large companies, but it's expensive and inflexible. For instance, when there's a problem with an EDI transaction, people still have to get on the phone to solve it. So, as companies automate the tracking of goods in the supply chain, these slower forms of conducting business will likely become a major bottleneck.

Web services, however, promise to simplify the electronic exchange of information. They can do this because they provide a single application program interface (API) that allows other applications on remote computers—even if those applications are written in different languages or on different operating systems—to exchange data. The data is exchanged in an XML format, usually transported using Simple Object Access Protocol (SOAP) and often transmitted over the Internet.