Supply chain RFID applications are ramping up more slowly than expected, but compliance with tagging initiatives at retailers and entities such as the U.S. Department of Defense have demonstrated the technology's potential for tracing and tracking goods. As a result, many manufacturers are adopting RFID internally for asset management tasks.

In 2006, roughly 285 million tag-equipped labels were sold, according to a report from IDTechEx, well below analysts' forecasts of 600 million. Modest growth is forecast for 2007, when volumes for supply chain applications are expected to reach 520 million.

Despite RFID's slow start, the technology can provide real value, as long as manufacturers know how to use the data it generates. "An RFID system won't really provide value unless it's connected downstream into the enterprise systems used to run the business," says Dean Frew, chief executive officer of Xterprise Inc., a systems integrator and pioneer in RFID service-oriented architecture (SOA) applications and RFID data analytics.

For example, iGPS LLC, a year-old pallet provider, has based its business on RFID-enabled asset management to supply reusable plastic pallets that can be tracked in real time.

The company tags its 48-inch by 40-inch pallets on all four sides with Gen 2 RFID smart labels manufactured by Zebra Technologies International, LLC or MPI Label Systems using RFID inlays from Avery Dennison RFID or Alien Technology . Tagging all four sides ensures readability. "We get virtually 100% read rates at dock doors, regardless of what's on the pallet or its orientation," says Matt Ream, senior manager of RFID business development at Zebra. Because pallets enjoy a life span of five to 10 years, the per-trip tag cost is minimal, he adds.

Zebra R110Xi printers encode the tags with a unique identification number based on the EPC Reusable Transport Item standard tag data format. System and data management depends on the Xterprise Asset Management (XAM) suite, a turnkey system consisting of passive and/or active tags, intelligent reader portals, and an SOA-based application server with enterprise integration services.

The SOA platform, based on Microsoft BizTalk Server 2006, manages hardware and transactions, and interfaces with iGPS's Axapta ERP system, a Ryder inventory and transportation management system, and customer systems.

"We're currently managing hundreds of thousands of transactions a week," Frew says. "This will grow to 1 million per week by the end of 2007."

As loaded pallets pass through reader portals, the system captures data from the pallet tag and any tagged cases or items on the pallet, and associates the pallet identification with the item or case data in the database so that the shipper knows what's on each pallet. Associating the case or item data with the pallet data in the database is more reliable than encoding it on the pallet tag, Frew says, and eliminates the possibility of delays related to the tag-writing process or downstream reading.

David Gulian, chief executive officer of InfoLogix Inc., a provider of business intelligence solutions, says, "The power of radio frequency identification (RFID) isn't in the tag, but the data that's created from it and the efficiencies derived from the data."