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News Tip: Will Radio Frequency ID Tags Become Industry Norm?
Though Wal-Mart recently announced it will require its suppliers to place radio frequency identification (RFID) tags on their products, it does not necessarily mean this technology will replace barcodes as the industry standard, says a Duke University business professor.
Many people have concluded that other businesses will follow Wal-Mart's lead, says Paul Zipkin, the T. Austin Finch, Sr. Professor of Business at Duke's Fuqua School of Business. "But people still underestimate Wal-Mart. Wal-Mart executives are pragmatic innovators. They are quite willing to try a promising new product, market or technology. If it doesn't work, they'll tinker with it and try again. If it still doesn't work, they'll drop it with no regrets. It's likely that they will take the same approach with RFID."
One plausible scenario, Zipkin says, is the following: Wal-Mart initiates a pilot project involving a few suppliers and warehouses. The system crashes. After months of tinkering, they roll out a new system. It works, but the cost is huge. More tinkering. The system finally works. Little by little, Wal-Mart expands the system to include more suppliers and warehouses. At some point criminals figure out how to fake the tags, and the whole system must be redesigned to foil them. Finally, the technology becomes stable enough to become routine. Total elapsed time: six years.
"Thus, it is likely that RFID technology will be adopted gradually, penetrating different industries at different times," says Zipkin, an expert on inventory and supply-chain management and author of "Foundations of Inventory Management" (McGraw-Hill, 2000).
Zipkin says there is no cause for alarm by privacy advocates. RFID represents "the latest of a series of innovations -- credit cards, electronic ID cards, electronic commerce, etc. -- that enhance the efficiency of transactions. Each of these technologies manipulates information in new ways, for good and for ill. Each can be and has been misused, and the industry has had to respond with adaptations to improve security and privacy at considerable cost. Despite the potential hazards, many people and companies choose to use the devices, to enjoy the greater convenience."
Zipkin can be reached for additional comment at (919) 660-7853 or by email.
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