Have you heard of RFID (radio frequency identification)? Wal-Mart has:

Inventory management technology that uses wireless signals to track products from the factory to store shelves is set to win a major new ally next week: Wal-Mart.

The retail giant is expected to throw its weight behind RFID (radio frequency identification) technology at the Retail Systems 2003 industry conference in Chicago on Tuesday. Sources familiar with the company's plans said executives will make a presentation encouraging its top 100 suppliers to start using wireless inventory tracking equipment--chips affixed to products, and scanners in warehouses--by 2005.

Wal-Mart's endorsement of RFID gives an important boost to efforts to overhaul the world's supply chains, a makeover that could provide a shot in the arm for technology companies struggling to find buyers for the latest products and services. RFID is expensive, but backers say it offers long-term benefits that could dwarf the impact of the bar code on inventory control and distribution.

RFID spending will be "bigger than...Y2K," predicted AMR Research analyst Pete Abell. "I imagine there will be a rush on investing in RFID."

Suppliers are already exploring the use of RFID technology in tracking goods from the factory to warehouses. But backing from retailers is considered important because it could ultimately allow products to be tracked on store shelves. [CNET]