Technology: A new era for industry, not Big Brother in a microchip - but try telling us that

They could transform manufacturing and distribution processes and even make air travel safer. Only before that can happen, a sceptical public must learn to trust RFID tags, writes Stephen Pritchard

Smart labels that can identify themselves over the airwaves, RFID tags have been described as the electronics industry's GM crops. A technology that scientists believe is both useful and harmless has become a focus of angry protests.

Smart labels that can identify themselves over the airwaves, RFID tags have been described as the electronics industry's GM crops. A technology that scientists believe is both useful and harmless has become a focus of angry protests.

While environmental groups have torn up fields of genetically modified plants, consumer groups have picketed stores using RFID to track their goods because of the perceived invasion of privacy. In one protest, more than 10,000 people demonstrated outside a store owned by Metro, a German retail group. Objections by consumer and civil rights groups also forced Benetton, the Italian clothing maker and retailer, to stall an RFID project.

For retailers, radio frequency identity tags offer a number of advantages. Each tag contains a small microchip, with its own unique number. A barcode allows a retailer to identify a product, whether it is a grey pullover or a tin of beans. But an RFID tag will identify the individual pullover or tin. Links to manufacturing and distribution databases can then help the store pinpoint where it was made, and how it has travelled through the supply chain.

But what worries consumers is the idea that the retailer can track the goods after they have been purchased. Yet the backers of RFID claim that this would stretch the technology to its limits, and that it would involve considerable expense for little commercial benefit.

Instead, companies want to use RFID to manage their inventories and control their supply chains. Stores can use the technology as one way to counter theft. Using sensors, they can also monitor customers' in-store behaviour. For example, if customers repeatedly pick up a product but return it to the shelf without buying it, data from RFID tags can show this. Such information is valuable to shopkeepers and producers, and cannot be provided by a barcode.

Ideally, the retailer wants the RFID tag to be built in to the product, so it can be tracked before it reaches the store as well as when it is on the rails. This needs the input of the manufacturer.

Marks & Spencer has experimented with RFID tags on men's suits at six of its stores, and the fashion company Hugo Boss also plans to use the technology. A number of retailers are modifying their production processes now, so that if RFID becomes mainstream, their manufacturers will be ready.

Demand from retailers for RFID-ready products is prompting manufacturers to look at how they can make use of the technology. And as long as consumers remain sceptical about RFID, the companies making the equipment believe the take-up is going to be strongest in the manufacturing and distribution periods of a product's lifecycle.

Retailers might even remove or deactivate RFID tags. In Germany, Metro has introduced RFID "killers" in its stores to allow shoppers to do this, should they wish. In the UK, Marks & Spencer has already put RFID tags in up to four million crates it uses to deliver fresh vegetables to stores. But it is at pains to point out that no tags on are the produce customers actually buy - or on its packaging.

The RFID industry is now on a charm offensive, stressing how benign the little chips are and how they could even improve safety standards.

Georg Brauckmann-Berger, IBM's leader for RFID in Europe, believes that industry will turn to the technology to help it identify parts. Car companies and aircraft manufacturers are two groups that are showing interest in RFID. "In a car, there are a number of safety-critical parts that could be recalled during a vehicle's lifetime," Mr Brauckmann-Berger says. "The industry is currently working on numbers that would identify car tyres. These numbers do not have to be RFID, but they could be."

Similarly, RFID could be used to identify aircraft parts. Manufacturers are interested in the technology because it can simplify their parts inventories. It also allows them to track the history of a part. Some aircraft components can be refurbished or remanufactured, and then reused. Giving an individual part an identity, through RFID, improves tracking and will give engineers access to the component's service history. It will also make it harder for unauthorised or unchecked parts to find their way on to planes.

Airbus is already running a small project using RFID, although this applies to ground equipment rather than aircraft components. The manufacturer holds a loan pool for specialist tools, which airlines can draw on for maintenance. RFID is helping Airbus manage this pool, according to Jens Heitmann, a senior manager for systems integration at the company. "Not all airlines can buy all the tools for maintenance," he says. "We are constantly moving these from A to B as we lend them to airlines. We decided to put RFID chips on 9,000 of these tools."

Putting RFID on to aircraft parts themselves requires approval from the aviation regulators, even though the tags do not transmit a radio signal unless near a reader. Once it has this approval, Airbus plans to put RFID into a range of components.

Items that are easy to mislay, such as life jackets, will be early candidates for the tags, particularly on Airbus's new A380 superjumbo. Says Mr Heitmann: "Today, cabin crew check before every flight that there is a life vest is under your site. That will be time consuming on the A380, with up to 550 passengers. In the future, RFID will be able to capture that data."

Other onboard equipment, such as coffee makers, will also be fitted with RFID tags. In time, the project will extend to components of the aircraft itself, although engineering problems remain, such as how to scan tags on a part where metal might interfere with the running of the system.

These technical hurdles are being overcome, however, not least because the US Department of Defense wants to see all equipment delivered to its sites equipped with RFID by 2006.

At IBM, Mr Brauckmann-Berger expects RFID to spread across industries, where its uses might range from identifying chemical drums to tracking such items as beer barrels or rolls of paper destined for printing presses. Already the electronics giant Philips (also a maker of RFID tags) is using RFID on its production line in Taiwan, although the tags are on cases or cartons, not individual products. This may not seem the most exciting application for cutting-edge electronics, but it is where real savings lie.

"This is not going to happen on the factory floor, because that is already a highly visible, tightly controlled environment," says George Lawrie, an analyst at Forrester Research. "But it will help manufacturers keep track of things such as paper roll cores and cable drums. It is a big expense keeping track of them, but they go missing because nobody really cares about them."

However, consumers have shown they do care about RFID. Given the way protesters strangled GM crops at birth in Europe, the backers of RFID must now focus on winning hearts and minds as well as contracts.