A technological revolution that could make the bar code redundant has begun. Ed Bedington reports on T2T Imagine a world where almost every household's kitchen equipment collaborates with the television set to carry out the weekly shop. Imagine a world where checkouts no longer exist and store shelves know exactly how many loaves of bread are currently resting on them. Imagine a world where thieves are identified the moment they touch a product. Imagine a world without stock-outs. This may sound like the far-fetched ramblings of a science fiction writer, but that couldn't be further from the truth. All the scenarios could exist within the next decade, according to researchers at the Massachusetts Institute of Technology's Auto-ID Centre in Boston which is developing technology which it claims will have a dramatic effect on the global supply chain. The centre's executive director, Kevin Ashton, describes the process as simply mixing atoms with bits of information ­ in other words connecting the physical with the electrical. Ashton says: "It's being called the next wave of the internet revolution, but really it's more than that, it's the next wave of the computer revolution. "At the moment, the internet's connection with the global supply chain is extremely weak ­ basically the link between the supply chain and the internet is a person. That's what we are about to change. "We call it T2T which stands for things talking to things, which started off as a joke, playing on the use of B2B and B2C, but the name stuck." The Auto-ID Centre is globally funded by industry, including firms such as Gillette, Procter & Gamble, and more recently Wal-Mart. They not only provide cash but allow researchers to investigate the commercial applications of the programme more proactively. Research director, Professor Sanjay Sarma, says the set up works by using a system known as the Electronic Product Code or ePC. This is a number made up of 96 bits of information which gives a unique code to almost every object in the world. This number is put onto a microchip which operates as a battery-free radio frequency identification tag. It is embedded in the product and transmits the individual number to a reader which can be connected to a computer. According to the researchers, the main advantage of tagging, compared with barcodes, is that it does not require line of sight to be read. Sarma says: "We are making the tags read only'. You don't write to the tag, you write to cyberspace and information is shared in cyberspace. "This means the tags work in a similar way to a car licence plate. If a policeman wants information on my car, he uses the registration number to pull down information from a data base. "So what we do is build one big database for the tags and build connectivity. There are several reasons for this, one is that it's cheaper ­ making the tags is very cheap and if the tag dies, the information is still stored somewhere." Sarma says the ultimate vision is of a store filled with readers and every product carrying a tag. This information is connected to a website which is available globally via the internet. This means that an entire store inventory is available accurately at the touch of a button, and if something is bought from the store, the readers register the absence of the product and the quantity of stock is automatically adjusted. Sarma said: "Obviously this raises questions of security and cost and these are things we are looking to address right now. "We're trying to push the cost of the tags down to five cents. It hasn't happened yet, and this is not going to happen tomorrow. We need to get volumes up. "The readers themselves are not rocket science, they're very basic technology. My laptop is far more complicated than the systems we're talking about. But they are still expensive and we need to get the price down. "We are very close to getting this done now, but that doesn't mean it will hit the streets tomorrow." But what will the new technology mean for the people at the sharp end? For companies such as Gillette, they hope the technology will effectively mean an end to their products being out of stock on store shelves, a problem that the company estimates being worth around $240m if it can be solved. Gillette's customer development manager for on-shelf availability in Europe, Colin Peacock, says it's a serious problem they are keen to address. "If customers are finding our products not in stock they will do one of three things. They will either wait until another time, buy another product, often trading down, or go to another store. All of which leads to customer frustration. "Addressing this issue is a win' situation for every party, customers, retailers and us, the manufacturers." Company research has revealed the main cause of out-of-stocks and empty shelves is stock loss and the fear of stock loss. This can arise from process failures, supplier fraud, internal and external theft. To combat stock loss on high risk products such as Gillette's, many stores employ defensive marketing measures, which, Peacock says, can lead to out-of-stock situations or products being kept away from customers. "Some stores will lock the products away from customers which means they then have to find a member of staff and get them to unlock the product which is inconvenient for everyone. "Other stores use plastic cards which customers must carry to a checkout. But a lot of stores resort to putting less stock out which again reduces on-shelf availability for customers." Gillette is working closely with companies in Europe in a bid to improve on-shelf availability using a variety of common sense methods, but the Auto-ID Centre's plans could mean a complete end to the company's problems. But Kraft Foods director of European Systems, Peter Jordan, is cautious about the new technology. Kraft's parent company, Phillip Morris, is one of the sponsors of the Auto-ID Centre and Jordan says one of the most important issues that the Auto-ID developers are considering is ensuring the technology uses a universally standard system: "There needs to be a standard frequency and set of protocols for each chip. If there isn't a recognised standard and different retailers use different systems, it would make things impossible for manufacturers." Jordan adds the use of the system may also be limited, for practical reasons: "We can see areas where it can be applied during the supply chain, but once you get beyond the pallet level it becomes difficult. "The people at Auto-ID are doing some great things, but there are a large number of technical and practical problems that need to be addressed. "There's a possibility it may eventually replace the bar-code, but not for a long time and only if costs come down and standards are put in place." The system is very much reliant on everyone being on board, from the major manufacturers right down to the smaller outfit and, as Jordan points out, a large number of smaller distributors still do not even have bar code technology. EAN International, the organisation that oversees the use of the traditional bar code, is also sponsoring the Auto ID Centre's work. But EAN's automatic data capture manager, Dave Buckley, does not think the new system will replace the bar code. "Maybe perhaps in the very long term, but the cost of a bar code is very little, almost an irrelevant cost. Even if tags come down in price it will still be an additional cost and I would question whether people would be able to carry it. "The tags could be applied to pallets and container loads, but taking it down to individual units is a big difference. "We see what they are doing as very exciting, but as for what it will turn into, that is a very big question." The Auto-ID Centre is currently preparing to hold a test towards the end of the year. At the moment no site has been picked and the tests are still in the planning stages, but the organisers hope the tests will prove to be a success. Overall, for use of the technology to become as widespread as Sarma and his team envisage, there is one main obstacle ­ cash. If the cost of the technology involved can be brought down to acceptable levels we could start seeing the supermarkets of the future in a few short years. {{FEAT. GENERAL }}