August 2, 2004

At first glance, airline luggage, hospital patients and a box of breakfast cereal might not seem to have a lot in common. But they do: they are all prime targets for new smart-tag technology that can help identify, distribute and/or keep track of them - and virtually anything else.

Mohsen Moazami, vice president of the Internet Business Solutions Group at Cisco Systems, was recently selected to serve on the Board of Governors for EPCglobal, Inc., the standards body that is leading the development of industry-driven standards for the Electronic Product Code (EPC) Network to support the use of Radio Frequency Identification (RFID) - the smart tags in today's retail supply chain and other information-rich trading networks.

News@Cisco spoke with Moazami recently to learn more about RFID and its importance to a wide range of industries.

Let's start by defining terms. What is RFID and what is the EPCglobal Network?

Mohsen Moazami: Think of RFID as the Internet of objects. We're arriving at a point in which every bottle of shampoo and container of prescription medicine has self-identifying capabilities. Each can have an RFID tag, or a 'passport' that it carries with it. People can scan that passport to obtain information about that specific bottle, much like they do today with bar code scanners. However, with RFID, the scanning can be done automatically without human intervention.

The industry's vision is to be able to track inventory and supplies this way, to handle them in a far more efficient, automated way.

RFID tags are one component of the EPC network. Together, RFID and the other technology layers of the EPC network help with immediate, automatic identification and sharing of information.

Why is this important?

Mohsen Moazami: This technology crosses many different industries. But let's look at just one problem for one industry - the retail industry.

The 'out of stock' problem costs more than $400 billion a year to that industry alone. This occurs when we, as consumers with money in our pockets, walk into a store intending to buy a particular item, only to find that the store is temporarily out of stock. So we leave, without spending our money.

The most efficient retail operator is Wal-Mart, and even that giant suffers an 8 percent loss of its business from this issue. Others suffer losses of up to 28 percent. So the promise of this technology is that retailers can do a better job of inventory management and visibility.

What are some other applications?

Mohsen Moazami: In the pharmaceutical industry, counterfeiting is a multi-billion-dollar problem. Fake drugs - that don't have the same degree of potency as the genuine article - are sometimes sold to consumers. RFID technology will make it easier to fight this problem.

In health care, operating rooms in the western world contain literally millions of dollars worth of specialized equipment. RFID technology can help keep track of this valuable equipment more efficiently - not to mention keeping track of patients.

And, of course, in the retail industry, this technology will help enable businesses to keep track of every single individual stock item.

Why is Cisco interested in RFID?

Mohsen Moazami: Customers have asked for our help, and we're responding.

Global customers like hospitals, retailers and manufacturers are deploying RFID infrastructures today. This is creating a platform from which a lot more data will be captured, stored and communicated. These customers want to get the most from their existing infrastructure as they deploy and use RFID technology.

What plans does Cisco have for RFID?

Mohsen Moazami: Currently, we're assisting our customers with existing RFID pilots. Ultimately, in keeping with our vision of an intelligent network, we're adding even more intelligence to the network edges.

With that intelligence, instead of undergoing the cost of transporting, storing and archiving all scanned data, I can determine what is important enough to keep and what can be deleted. The intelligence can also identify particularly important information that should be routed to a manager, for example.

With whom is Cisco working?

Mohsen Moazami: We're currently working with our customers to determine their needs and how we can assist them. We're committed to delivering value to the customer through the RFID/EPC network.

Why is it important for Cisco to be part of EPCglobal?

Mohsen Moazami: This is a member-driven body. The users of this technology have come together to help define industry standards so that this industry doesn't face a 'Beta versus VHS' problem, in which a lot of investment was wasted because of divergent standards.

Also, EPCglobal will help address concerns such as consumer privacy. Through advocacy and education, this group will try to address these and other issues that could hinder accelerated adoption of this infrastructure.

What contributions can Cisco make to EPCglobal that other technology providers might not?

Mohsen Moazami: Cisco has a long tradition of building on top of open, non-proprietary technology, and we've been very influential on standards bodies in helping to adopt and promote widespread industry standards. That experience is invaluable to EPCglobal.

And at end of day, this is a network. Given our prominence in the networking space, we can be very influential in helping the acceleration and adoption of the EPC network across the globe.

This is a major, transformational industry development that will occur on a widespread basis by the end of this decade. Cisco intends to play a significant role as this important technology unfolds.