Lab studying new tag technology

MADISON, Wis. — Alfonso Gutierrez smiles as boxes of Kraft Macaroni and Cheese tagged with tiny chips zip around a conveyor belt and pass under a reader that instantly displays information about the product.

"It's going fast," said Gutierrez, who heads a new university research lab dedicated to helping businesses deploy the technology that could one day replace the bar code.

Gutierrez was referring to the speed of the conveyor belt — 600 feet per minute, the speed Wal-Mart uses in its warehouses — but he could have been talking about the rapid acceptance of radio frequency identification, a technology that can revolutionize business but also erode privacy.

RFID uses a computer chip the size of a grain of rice to store data, which are transmitted wirelessly by a tiny antenna to a receiver. The chips, embedded in tags, now track pallets in warehouses and let drivers pass toll booths without stopping, but their potential is almost limitless.

To accelerate deployment, the University of Wisconsin-Madison formally opened a lab this month to study how to make RFID work better, leaving it to others to debate the broader issues such as implementation and privacy.

"RFID technology and applications are revolutionizing supply-chain management and are enabling companies to obtain an enormous amount of data in a short period of time," said Paul Peercy, dean of UW's College of Engineering. "It's only in its infancy state, but it's going to affect nearly all industries."

More than 40 companies, including 3M Co., Kraft Foods Inc. and S.C. Johnson & Son Inc., are contributing $500,000 combined to start the lab, and the university is kicking in another $62,000. Other companies can pay for individual research projects, giving them access to top-notch scientists without having to fund their own labs.

In 2003, Wal-Mart Stores Inc. and the Department of Defense ordered their top suppliers to start using RFID technology by this year. The goal was to track products without human interaction, resulting in fewer misplaced shipments and the ability to restock store shelves as soon as a product runs out.

Wal-Mart spokeswoman Christi Gallagher said the retailer is on track to have the technology at 13 distribution centers and up to 600 stores by October, but she said many suppliers have had difficulties finding tags that fit their products or figuring out how to place them in such a way that they can be read without outside interference.