No one wants to be caught napping when the next big thing comes along—just ask the e-commerce company whose business plan was based on a dialup connection. But what about radio-frequency identification technology, or RFID? Can you safely put it on hold or is it one of those technologies you ignore at your peril?

Though it's been around for several years now, not everyone knows what radio-frequency identification is and how it's used . At its most basic, an RFID system consists of three components: an antenna or coil, a transreceiver, and a transponder or RF tag that is programmed el ectronically with unique information. Typically, the antenna is packaged with the transreceiver and a decoder to become a reader.

The antenna transmits radio signals that activate the tag and read data from it—and with some tags, write data to it. Antennae, available in a variety of shapes and sizes, can be built into existing structures, such as doorframes.

Readers, which can be mounted to a fixed location or held in the hand,emit radio waves in a wide range, depending upon the power output and radio frequency used. The tag detects the reader's activation signal when it passes through the electromagnetic zone. The reader decodes the data that are encoded in the tag's computer chip, and the data are passed to a host computer for processing.

A good deal of confusion surrounds the advanced functionality that RFID offers. Simply put , RFID can do things that optical or magnetic identification technologies cannot do. Specifically, RFID can identify objects that are not in the reader's line of sight, it can identify items that do not come into physical contact with the reader and it can perform these tasks without any human intervention.

If your auto ID operation requires these capabilities, then RFID may be the solution. If not, other, lower-cost automatic ID technologies are likely to be sufficient.

RFID is currently seeing widespread use in several industries and applications, including manufacturing plants where products of high unit value move rapidly through tough environments. RFID also is widely used in rail and trucking transportation, and in retail outlets to prevent theft.

But RFID's potential is perhaps greatest in applications where it's important to know more about an item than merely its identity, such as where it has previously been routed to, when it has undergone maintenance, or what processing steps it has undergone. In such applications, read/wri te RFID tags offer what amounts to a "mobile data base" of information about the product. Down stream operations can automatically "interrogate" the read/write tag and receive a full account of key details of the product's history.

Two major factors have held b ack wider adoption of RFID technology, says Cliff Horwitz, president and CEO of SAMSys, a manufacturer of RFID readers. These factors? Price and a lack of standards. "End-users are still too focused on the price of RFID tags," says Horwitz. "But users compare the price of RFID to techniques used to simply identify products, such as bar codes." That isn't a valid comparison, he stresses, because RFID offers functionality that simply is not available with other auto ID technologies.

In the standards area, Horwitz says that although a great deal of work has been done, "standards are not in and of themselves the panacea. We need to do a better job of educating users about what standards can bring them and what they can't."

Still considering RFID? Your best bet is to work closely with suppliers of the various components to ensure you fully understand whether it's right for your specific operations. RFID is not a "one size fits all" technology—far from it. Although the potential produ ctivi ty improvem ents that RFID can deliver are significant, it's critical that the technology be matched with the application to maximize benefits received.