Microsoft hops on the RFID bandwagon

Microsoft on Monday announced new software designed to help small and midsize companies better manage their supply chains wirelessly.

The company has added radio frequency identification technology, which combines silicon chips and radio frequency technology to track inventory, to its Microsoft Axapta Warehouse Management software.

Microsoft has been testing the new RFID software with KiMs, a Danish snack food company, since December 2003. KiMs, which was already using Axapta, is using the new software to monitor pallets or cartons of finished goods as they move out of production and into a third-party warehouse. The company said that the new software provides much greater knowledge of the exact location of products at various points in its supply chain.

RFID has been lauded by manufacturers and retailers for its ability to provide better information about inventory and other data across the supply chain, which can increase product availability and help businesses reduce costs by trimming inventory levels.

Several major companies have already announced RFID initiatives. German retailer Metro Group has asked its top suppliers to begin attaching the special microchips to shipments. Wal-Mart and the U.S. Defense Department have also begun big RFID projects with the expectation that the technology will help prevent goods from being lost or stolen. Companies like Gillette and Procter & Gamble are experimenting with using RFID systems in stores to prevent shoplifting and to monitor stock on the shelf.

		News.commentary The year of living RFID In 2004, many companies will need to adopt radio frequency identification to meet federal and commercial mandates.

Microsoft's software will now allow smaller companies to take advantage of the innovative wireless technology.

The way it works is that RFID "tags," which contain a special radio frequency-emitting microchip, are attached to each carton or box of goods. The microchip wirelessly broadcasts information about itself, such as its location and its origin. Each tag has a unique number, or electronic product code (EPC). The tags are monitored during storage, loading and shipment, and the data is fed back into Microsoft Axapta.

Microsoft has made several moves to support RFID. Earlier this month, the software maker said it would be creating tools, using the company's .Net Web services framework, that will allow retailers to interact with customers, improve operations management and incorporate RFID.

Other companies are also introducing RFID products. IBM and Dutch electronics maker Philips announced on Monday that they are working together on an RFID product. Philips' semiconductor unit will make the radio chips that can be stuck on items, and IBM will provide the computer services and systems.