SMARTSTICK™ AND RFID

Currently used in toll road commuter Fastrak systems and retail theft prevention, Radio Frequency Identification (RFID) is proven technology that carries and retrieves data. It has been initiated for use in logistics and inventory management efficiency programs, and is ultimately expected to supplement the current universal bar coding system. Wal*Mart, the Department of Defense and several other companies have set implementation dates for RFID programs to help reduce labor costs, out-of-stocks and inventory shrinkage, and improve in-transit visibility. Logistics service providers are actively embracing the technology.

RFID technology consists of a series of components including tags, antennae, readers and software. These components are combined and the data integrated to provide supply chain and logistics information. The RFID systems currently being implemented allow assets to communicate directly with enterprise systems. This systems link provides instantaneous tracking of containers, pallets, cartons and individual units.

The SmartStick™ is designed as an RFID carrier. Virtually any RFID tag and/or antennae can be inserted into the SmartStick™, which unlike external tag mounting, prevents accidental damage and tampering of the tags. The tags are attached to the SmartStick™ and protected from damage and loss but completely readable for accurate tracking and data integration from a substantial distance. As RFID technology penetrates the market and adds value to the consumer goods supply chain, retailer demand for implementation will increase due to the value added to their business by the overall integrity enhancement to the pallet transportation system.

The SmartStick™ promises to lower costs due to efficient supply chain management as well as the reduction of product and asset losses. Adoption is driven by retailers, consumer packaged goods (CPG) companies and the Department of Defense (DoD) who are requiring that their suppliers include RFID tags on pallets. With roughly $460 million spent on RFID tags in 2002, which is expected to grow at roughly 23% annually through 2007, analysts are expecting pallets and containers to lead the way for RFID adoption in supply chain solutions.

The DoD and Wal*Mart announcements, which mandate that their top 100 suppliers include RFID tags on all incoming pallets, suggests that the adoption of RFID technology is accelerating. With an estimated 43,000 suppliers for the DoD and over 10,000 at Wal-Mart, these initiatives are likely to be a significant driving force for RFID adoption. Other industries, including the pharmaceutical and the airport/airline industries, are also showing increasing interest in RFID.

The interest in RFID technology stems from its developing capabilities as well as inherent advantages over barcode systems. RFID tags can be read through most product materials, eliminating the “line of sight” requirement, and can provide more automated and accurate readability. Of significant importance to the SmartStick™ is the amount of data that can be encoded and retrieved from RFID tags. As tag technologies develop the sophistication of information available increases dramatically. The SmartStick™ could, for example, include temperature sensors that record environmental changes as the product is transported, and tags that can be re-written at each stop while in-transit, providing up to the minute accurate tracking.

As currently designed, the SmartStick™ is capable of accommodating all current RFID tag classes from any designated tag manufacture. Most current retail requirements are for Class 0 tags, but many other companies and industries are already experimenting with more sophisticated RFID technology.

Tag Class	Characteristics
Class 0	Read Only, Factory Programmable
Class 1	Write Once, Read Many
Class 2	Fully Re-Writable
Class 3	Active Tag (Fully Re-Writable)
Class 4	Relay Tag – Communicates with other tags