Intelligent devices to drive commerce

25 Nov 2002

The next phase in the evolution of e-commerce will see a proliferation of thinking devices ranging from radio frequency ID (RFID) tags, sensors and mobile computers the size of dust particles, that will all feed into a range of supply chain management (SCM) and enterprise resource planning (ERP) systems.

This new phase will be known as silent or ubiquitous commerce and should be commonplace in five years’ time, experts say.

“Always on, always aware, always active, this new wave of technology will build on breakthroughs so far in barcode technology and mobile commerce over cell phones,” says Accenture strategy manager, Seamus Mulconry.

Mulconry pointed to the current phase of development in RFID technology — tiny chips that are capable of interacting with radio scanners in warehouses, shops and the home, which will eventually replace the barcode we see on items ranging from magazines to packages of food. “This technology will give manufacturers, retailers and consumers a far more complete history of the lifecycle of a product than currently enjoyed through barcode,” Mulconry said.

He pointed to the creation by Silicon Valley researchers of a device the size of a matchbox with its own self-generating power source, programmable memory and a radio transmitter. “In a number of years the plan is to replicate the same thing as the size of a piece of dust, not necessarily computers, but smart devices with sensing abilities and the ability to communicate. Smart dust, for example, could be included in the oil in a car engine and could report on the health of a car,” he added.

Technologies such as RFID are finding widespread early adoption in a variety of places, ranging from inventory control in the US Army to collaborations between the Massachusetts Institute of Technology (MIT) and Wal-Mart, to enhance inventory management and the shopping experience of the consumer. Agricultural uses of RFID have also been mooted, with farmers using RFID chips to keep an eye on cattle movements and milk shipments. Others include utilising sensors and actuators to manage quality control, according to a recent article in MIT’s Technology Review Magazine.

The RFID chips, sensors and actuators would feed into a network enabling farmers and dairies, for example, to enjoy a ubiquitous supply chain, that would be managed using various web standards such as XML and enabling greater transparency through data storage archiving and retrieval.

“This kind of technology could prove useful to a food company if a shipment was contaminated, for example,” says Mulconry. “If they are able to track that shipment more accurately, the potential impact on their business would be lessened.” Mulconry also pointed to work that Accenture is doing in the US with a casino whereby hundreds of uniforms and costumes used by the casino’s staff are being tracked by RFID chips.

All of this, Mulconry says, is being driven by a number of key trends. These include: rapidly declining RFID and chip reader prices, the internet’s ability to connect a multitude of devices and data and legacy systems (ERP) appetite for data. Other trends include the increasing costs of counterfeiting, increased need for deeper consumer insight, value chain partners requiring more information, increased automation due to rising labour costs and increased product handling regulations.

Mulconry continued: “Advances in nanotechnology, which involves making tiny intelligent devices and RFID tags, are helping more and more devices to communicate. This is silent commerce. We are talking about a world where machines are connected to each other and are doing work that today is mostly manual. Most of this stuff is in prototype stage, but we are starting to see an uptake in business for it. It is very early days yet, we are talking about a five to seven year horizon, but it is coming. Five years ago we were at the same stage of e-commerce.

“E-commerce has become ubiquitous. It is impossible for a major corporate to do business today without making some reference to the internet. It is no longer a novelty or something that people are confused about. The reality is that its become an everyday part of business,” Mulconry concluded.

By John Kennedy