Savi Technology Inc. on Tuesday announced a partnership agreement with Matrics Inc. in which the two firms will use radio frequency identification (RFID) technology to help give companies better visibility into the supply chain.
Savi, a Sunnyvale, Calif.-based provider of supply chain technologies, and Columbia, Md.-based Matrics are partnering to develop systems that can read both passive and active RFID tags.
Active tags, those with their own power sources, have much more computing power than passive tags, so they relay more information, but they're also more expensive. They are used mostly to track large items, like shipping containers.
Passive tags are powered by the reader, and they simply relay their identity to a reader. They are becoming inexpensive enough that some companies are experimenting with placing them on product shipping cases and, in some cases, on actual products.
With this announcement, both companies will begin working to create products that are compatible with both active and passive tags. The first product from the partnership will be a handheld device that reads both active and passive tags. A prototype is expected by the end of 2003.
"Both companies realized that we needed to ensure that the industry created solutions that enable different technologies to communicate with each other," said Mark Nelson, a spokesman for Savi Technology.
This partnership is important because RFID lacks a universal standard, which means that interoperability is often a problem, said Adrian Gonzales, a director with the Dedham, Mass.-based research firm ARC Advisory Group.
"Everyone is moving in different directions, and the market is never going to grow that way," Gonzales said.
With the efforts of this partnership, companies will be able to simultaneously access information about the movement of products from the container level down to the case or pallet level. Eventually, it will extend to the product level.
Plus, with the additional information, companies can have better control over their products, and, ultimately, create new efficiencies in the supply chain, Gonzales said.
While commonly used, product-level RFID is still some time off, Gonzales said that companies are hungry to know more about their supply chains. Companies want better visibility, and this is a promising start, he said.
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