Bill Wade, Post-Gazette Marlin H. Mickle shows a research RFID chip. A lab at the University of Pittsburgh is testing ways to make the chips more affordable for small companies. Click photo for larger image.

A busy Saturday afternoon may leave shelves at a typical Wal-Mart bare of Pampers diapers or Ol' Roy dog food or even size-10 Levi jeans. Busy employees may get around to restocking only one of every 12 items cleared out, mainly because they don't know which shelves are bare.

"The lost sales are huge," said Simon Langford, the man with the ambitious assignment of fixing the problem by implementing a system that promises to keep better track of billions of items flowing through the planet's biggest retail operation -- and to make shopping faster and easier in the process.

Radio frequency identification technology, casually known as RFID, is at the heart of that system. The idea behind it has been around a long time and has come into common use in places such as the Pennsylvania Turnpike, where the EZ Pass system allows cars to breeze through toll booths now and pay a bill later.

The science that would make it possible to follow each box of cereal, each bar of soap and each T-shirt from the manufacturer to the warehouse to the sales floor and out through the cash register has yet to be perfected.

There's no agreement yet on standard technology, but if there were an RFID grocery store today, products would carry a selection of tags, ranging from 4-inch-by-6-inch rectangular versions to ones the size of a piece of gum, only flatter. Some would have two tiny antennas pointing out from the pinhead-size chip, others have one or even three.

Steve Senne, Associated Press Electronic product code RFIDs, also known as "squiggle tags," appear bottom and right, while an electronic product code class zero RFID is at center. The RFID could eventually replace bar codes. Click photo for larger image. What is RFID? Radio frequency identification, or RFID, uses radio waves to identify people or objects. The most common method is to store a serial number that identifies a person or object, and perhaps other information, on a microchip attached to an antenna. The chip and the antenna together are called an RFID transponder or an RFID tag. The antenna enables the chip to transmit information to a reader. How does RFID differ from bar codes? RFID tags have microchips that can store a unique serial number for every product manufactured around the world. Most bar codes identify only the manufacturer and product, not the unique item. Unlike bar codes, which require a "line-of-sight" reader, RFID tags can be read as long as they are within range of a reader.

The technology is expensive, sometimes awkward and raises worries among consumer groups who see it as yet another Big Brother-like attempt to chip away at shoppers' privacy.

Wal-Mart is determined to drive the research along. The $288 billion retailer's insistence that everybody else get on board, ready or not, may be the driving force behind a whole new approach to shopping. In that future scenario, consumers will casually dash out the supermarket door with a load of groceries instantly charged to their account, or retailers will implement a recall on bad meat simply by scanning RFID records.

In mid-2003, Wal-Mart demanded 100 suppliers be on board with radio frequency systems by January 2005. Boston research firm AMR Research estimates the company's suppliers have, so far, collectively spent $250 million on the chore. Another 200 top suppliers have been given a January 2006 deadline. The retailer plans to outfit 600 of its stores and 12 distribution centers by October.

The ripples from the project have spread through the retail supply chain and beyond. Retailers such as Target have issued their own mandates, and others like Sears and Kmart are studying the technology.

A lab at the University of Pittsburgh is testing ways to make RFID chips more affordable for small companies. Genco, a warehouse logistics company in Blawnox, is advising clients how to implement the existing technology. A local furniture chain has been discussing whether or not a system would fit in its showrooms.

"Wal-Mart's mandate is the reason everyone is doing it," said Cary Cameron, vice president of strategic technologies at Blawnox-based Genco.

Problems and promise

Radio frequency identification is seen as the next great leap beyond the now-decades-old barcode. Barcodes use thin, black bars that could be visually read when scanned, which makes taking inventory and ringing up sales easier by feeding product information into a computer.

RFID goes further by giving each item its own unique code that can be checked by electronic readers sending out radio waves and then recording the waves sent back by tags in the vicinity. Readers might be set up all along the supply chain to keep track of items as they move through.

In making his case on a recent industry conference call, Wal-Mart's Langford said RFID will protect manufacturers against counterfeiters, allow suppliers to see where goods are slowing down and help employees spend less time scouting through piles of back-room boxes.

When it tracked one store recently over a 24-hour period, the retailer found an average of 30 to 35 cases of goods pulled from the stockroom and then later returned because they were not needed. Multiply that across thousands of stores and it adds up.

Stores are not the only place errors add to retail expenses. Despite increasingly sophisticated warehouse systems, busy forklift operators in huge distribution centers buzzing around dozens of bay doors regularly place cases on the wrong truck, said Cameron.

Marlin Mickle and a group of University of Pittsburgh students took their traveling radio frequency identification demonstration to Harrisburg two weeks ago to show it off for lawmakers. The team stuck tags on a load of groceries and set up a reader that impressively records the contents.

Yet, Mickle, a professor of electrical engineering, believes the checkout counter may be one of the last places the technology will get widespread use, and not just because consumers will be the trickiest audience to win over.

Numerous advocacy groups have raised concerns about the possible misuse of tags embedded inside clothing or items carried in purses. If not disabled at the cash register, the tags could be read by anyone with the right device and within range without the knowledge of the consumer. In addition, there are fears that all this new data could be linked with personal information on buyers.

But there are also practical issues to work out, said Mickle, such as making sure RFID readers do not charge the wrong customers for the wrong goods. If a reader can read chips within 20 feet and a typical grocery aisle is 8 or 10 feet wide, what is to stop one consumer from paying for the next guy's items? "Nobody talks much about that problem," said Mickle.

He wandered into the field in 1999 when a student's senior project led to work on sensors that do not need batteries. The sensors wait passively to respond to a signal from a reader, a prospect attractive to many companies because of the long shelf life.

Not long after, the Department of Defense was trying to develop a standardized test to determine which of the radio frequency identification systems on the market were best for which needs. The Pitt team got the assignment and set up a test still used by the Defense Department's labs.

Mickle had decided to move on until he read about a group trying to put antennas on the radio frequency identification chips, something his team had already been doing. With support from groups like the Pittsburgh Digital Greenhouse, that work moved up on the priority list. "OK, we're back in the RFID business," he remembers thinking.

Since then, Mickle has been in the news talking about how Pitt's "smart tag" could be disabled at the point of sale, which would address concerns about consumers walking around in tagged clothing and giving out information unknowingly.

He also helped forge a deal with semiconductor design company Adcus Inc. to develop an inexpensive, generic tag that could be customized by small- to medium-size companies. Adcus, which is allied with Korean company Advanced Digital Chips and operates a regional office on Route 19, donated services and computer software worth about half a million dollars to further the work.

The Pitt researchers -- a mix of faculty and students -- have found numerous bankable ideas for RFID. Battery-operated tags costing $20 each, if perfected, could be read from longer distances and might allow low-flying planes to swoop over ships to make sure the containers they carry hold the right merchandise.

Manufacturers could benefit from a project to put a $20,000 machine directly on assembly lines to simplify the process of applying radio frequency tags to individual products such as DVD players or boxes of laundry detergent. Now, tags often are slapped on cases as they head out the supplier's door and only on the ones going to a retailer or other customer who requires one. With tags costing between 20 cents and $1 each, it is not worth putting them on every one of thousands of cardboard boxes.

Mickle, who has never taken so many calls about a technology, expects the work to keep him busy for years. He has Wal-Mart to thank for much of that. So far, he praises the retailer's involvement. But he adds one caveat. "It's been good as long as the industry can keep moving ahead and not just selling what they have."

The battle for supremacy

Rather like the Beta vs. VHS battles that launched videocassette recorders into American homes, the radio frequency identification industry is still working out what format the final systems will take and who will make them. Mergers and acquisitions seem guaranteed.

"You don't know who is going to end up being the last man standing, so to speak," said Genco's Cameron, who has spent the last year setting up a small simulated warehouse distribution center inside the company's headquarters along the Allegheny River.

Nevertheless, Genco officials decided they had to plunge in or their business clients would look elsewhere for assistance meeting the mandates or even setting their own. Genco works with both suppliers and retailers.

Next week, the company is scheduled to run the first official check of a client's shipping cases through a 9,000-square-foot test center carved out of chilly warehouse space. The secure area holds a conveyor belt outfitted with RFID readers made by three different companies so the testers can determine which works best for a particular product.

Though getting tags onto every item in the store is the eventual goal of RFID proponents, there's consensus that costs will have to drop dramatically to make that possible. Langford estimated tagging individual bottles of water, for example, could not be justified until costs fall below a penny per tag.

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Already, though, more expensive items that may come one to a case, such as televisions and personal computers, are getting RFID tags. Langford said Wal-Mart has no firm plans yet to try setting up readers at the checkout stands, something that large United Kingdom supermarket chain Tesco is expected to test and that has sparked calls for a boycott from privacy groups.

For many who do not supply Wal-Mart or the other companies that have begun to insist on it, the inclination just now is to wait until the early adopters work out the bugs and fight the public relations battles.

"Generally, we're not looking to be on the front end," said a spokesman for Findlay-based Dick's Sporting Goods.