An RFID, or radio frequency identification, is a rather new technological development. An RFID system uses transponders to store and remotely retrieve stored data. Currently, RFID is used everywhere, from animal tracking to container tracking. From credit cards to library cards we see the usage of RFID. Some RFID applications can remove human intervention completely. RFID promises to directly connect logistic systems to the physical products, and provide automatic identification.

Generally, the RFID system has tags, tag readers, servers and application software. The tags are mobile devices with a digital memory chip and unique identification code which transmits the data, which is then read by the tag reader. Further processing is done by the application software. RFID can track locations with millimeter accuracy. Animal identification is done with low-frequency RFID tags, while high-frequency RFID tags are used in libraries or baggage tracking.

RFID tags are going to replace UPC or EAN barcodes. The introduction of RFID technology helps track the product and customer’s use patterns even after purchase. P&G tags a small number of cases and pallets of their products as a part of trial with Wal-mart stores. UHF RFID tags are commonly used for truck and trailer tracking in shipping yards. The company is focusing on making the supply chain management more efficient. The Federal trade commission held a forum to begin the dialogue on RFID, its usage and benefits and potential concerns. There are privacy concerns based on the fact that companies will collect data about consumers without their knowledge, and then misuse the data.