RFID is a technology whose time has finally come - and that's good news for your supply chain.

When Australian Packaging giant Visy Industries embarked on a pilot project last year to trial the use of radio frequency identification (RFID) tags on delivery dockets for tracking loads through its supply chain, it had no idea it was creating a fait accompli. Yet by the time the tags had been in use for a month the level of acceptance from the business and users was so high it would have taken a brave person to take the tags away again.

"The fact of life is, once we had been running for over a month, the pilot had to become a production system," says general manager, information systems and business solutions, Peter Hood. "We met with the business and the users a number of times over the course of the trial, and they were so happy with what they saw that they already considered RFID a part of their business."

As the only Australian member of Auto-ID - a worldwide coordinating group for the radio frequency identification industry that has now morphed into EPC Global - Visy Industries felt it had a responsibility to go on an accelerated learning curve and get its hands dirty with the technology some pundits are touting as the next way to streamline supply chains and increase efficiencies at retail outlets.

Hood's verdict? The Auto-ID solution for the supply chain works; the US decrees from Wal-Mart and the US Department of Defence that by 2005 top suppliers must tag their cartons and palettes have provided a timeline and a sense of urgency about its adoption; users love its convenience, but the industry still needs to do some work on standards and cost of ownership before the technology becomes ubiquitous.

In this way a simple technology that has been around since World War II and in its present form for a couple of years is showing it has the potential finally to make the mark its promoters dreamt of. RFID enables objects to carry and transmit information inexpensively without human intervention by transferring data wirelessly between a tiny transceiver and a transponder or "tag". The tag can be attached to anything from the items on store shelves through to shipping containers; e-tags on cars to fruit, vegetables and livestock; and on to just about anything else business and the human imagination can dream up. Better still, tag and transponder can trigger actions, such as reordering from a supplier.

Unlike barcodes, RFID does not require line-of-sight scanning, with high-frequency RFID systems capable of transmission ranges up to 27 metres. This is RFID's great promise: to offer more granular, accurate information on product availability and to automate processes that are performed manually. On the other hand, some privacy advocates see an equally great threat: that customers wearing or carrying tagged items could be surreptitiously tracked by the government, store or hackers.

Even so, RFID is already in use in airport luggage routing systems, at highway toll collections, on dairy cows and samples of their milk, on the uniforms used by workers at Sydney's Star City Casino and to track everything from rubbish bins to commercial linen travelling through laundries.

Its use is starting to escalate. Sun Microsystems' chairman, president and CEO, Scott McNealy, sees RFID as one of the keys to connecting everything with a digital, electrical or biological heartbeat, even inert objects - and conceivably every object on the planet - to the network. "The evolution from a network of hundreds of thousands of computers, to millions, billions, even trillions of things, will be here much sooner than we expected," he says. "That's going to generate a tonne of information that needs to be processed, stored, accessed and served up."