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Part 1: State of The Art

How close is the Auto-ID Center is to creating a network for tracking goods worldwide? And what will the equipment will cost?
Sep 09, 2002—Sept. 9, 2002 - There has been a great deal of confusion in the marketplace surrounding the Auto-ID Center's quest to build an "Internet of things" – that is, the world's first open, global network for tracking goods using low-cost RFID tags and readers. Many people say it will take years to create low-cost tags and develop the necessary infrastructure to track unique items globally. In this first installment of our special report Low-Cost RFID: The Way Forward, we will answer some of the key questions many companies have about the Auto-ID Center.

The center's goal is to create a global network that would make it possible for a company in China to tag a pair of sneakers or a polo shirt and have that item tracked as it moves through the supply chain to a retail outlet in the United States, Russia, Germany, or Argentina. The center is creating a layer of information technology that will sit on top of the existing Internet and provide a low-cost way of transmitting information about specific products.

Unlike most RFID systems, the Auto-ID Center's is based on the idea that each product will have simply an electronic product code (EPC) – a unique "license plate" that identifies the manufacturer, product category and unique item. All other information about that item – when it was made, where, how much it cost and so on -- will be stored in databases on the Internet or on a company's local area network.

The reason for using just a serial number on the tag is it makes the microchip much simpler and the cost of the tag much lower. There are other advantages, according to the Auto-ID Center, such as the ability to store a great deal more information about each individual item in a database. For instance, a robot on an assembly line might be equipped with a reader that enables the robot to identify parts. It would then be able to download instructions from an associated database on how to install different parts on different models. If that information were stored in the tag, the chip would be prohibitively expensive – which, of course, is why few people use such systems today.

Critics of this license plate approach say that the IT infrastructure needed to make the system work is years away or that it is just impractical. Often, this point of view is espoused by existing RFID tag makers, who would prefer to sell more sophisticated chips with higher margins. Other critics say companies will never trust their supply chain operations to the Internet because the Internet is unreliable. Not only are many Global 1000 companies moving in this direction, but companies like Amazon, which has more than a billion dollars a year in sales, exist entirely on the Web.
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