Indian giant Infosys backs RFID

Indian information technology services and consulting company Infosys Technologies has thrown its support behind the controversial tracking technology known as RFID, or radio frequency identification.

The inventory tracking system is designed to let companies better take stock of their supply chains, but critics fear its widespread use could lead to invasion of privacy by retailers and governments.

In a statement issued earlier this week, Infosys said it will start marketing a new offering based on RFID, which keeps tabs on stock levels through microchips embedded in individual products. Beyond slashing labor costs associated with stock checking, the advanced tracking capabilities of radio frequency-based systems, such as the ability to tell an item's origin, time of purchase and expiration date, will enable companies to respond quickly to changes in the demand and supply chains.

Infosys said it will now provide consulting services to help clients identify pilot RFID projects and develop a plan for phased adoption. According to published reports, the company will also develop customized software to help customers integrate radio frequency networks into their current IT infrastructure.

"Enterprises...face many challenges in...(the) tracking of physical movement of goods, assets and personnel," Nandan M. Nilekani, Infosys' chief executive officer, said in a statement. "Our customers can now look to us to provide cost reduction, improved customer service and streamlined operations."

Radio-frequency systems may be a nascent technology, but they have drawn significant interest in the past year, most notably from the retail sector.

In the United States, companies like Gillette and Wal-Mart Stores have been experimenting with specially designed shelves that can read radio frequency signals. U.K.-based supermarket chain Tesco has also launched trials, and in Singapore, the National Library Board has already implemented an RFID-based borrowing and returning system at all 25 branch libraries across the island.

Despite the merits, the high costs of radio frequency tags and possible signal interference remain as obstacles to broader adoption. In addition, consumer groups have also vehemently protested the use of RFID chips for fear the technology will invade individual privacy and allow for unprecedented government surveillance.

CNETAsia's Winston Chai reported from Singapore.