Welcome to the world of RFID—Radio Frequency
IDentity tags—which is the technology that may render
obsolete the current bar codes and scanners used in supply
chains. And a serious player in this business is Piyush Sodha,
CEO of Matrics RFID in Columbia, Maryland. In a second
round of funding, Sodha has managed to gather $15 million
despite the downturn in the markets. Sodha comes with a
reputation of successfully heading startups and leading them
to public offers. An IIT Delhi graduate with an MBA from
Wharton, Sodha worked for IBM, Nortel and Booz Allen
Hamilton, before moving on to work with startups.

While not a founder of any startup idea, Sodha has headed
LCC International, which he took public in 1996
(NASDAQ:LCCI), and then Nextlinx, a supply chain
management company. He has also managed to sell his most
recent venture, Wireless Home, to Western Multiplex
Corporation (NASDAQ:WMUX) for an undisclosed amount.

Sodha's interest in wireless was piqued during his stint at
Nortel, where he was involved in infrastructure development,
setting up transmission stations and nodal points for the
cellular industry. Booz Allen Hamilton fetched him some good
consulting experience in line management and he left this to
join LCC in 1990. He took this system design company public
in 1996 and subsequently left to head Nextlinx. Nextlinx is a
supply chain management company and Sodha found his past
experience to be of good use. He left this too and joined
Wireless Home in 1998, which was involved in low-cost
wireless networking for corporate businesses.

In almost all these cases, Sodha had been an early-stage
investor. Matrics was one such investment. "I was enamored
by the possibilities of this technology. It has been around for
sometime, but with Matrics I saw the technology making a
business out of itself," says Sodha. The history of RFID goes
back to the Gulf war, when a U.S. warplane was shot down in
the Arabian deserts and the pilots had gone missing.The need
for some device that could locate these pilots across vast
distances was glaring.A couple of scientists began working on
the possibilities of remote sensors and radio tags.And Matrics
came into being. Sodha's investment broker tipped him off on
this startup looking for funding and Sodha needed no second
bidding. From tracking people to tracking products, it was a
quick change of focus and Matrics today is a member of the
Auto-ID center, a working group that has names like the
Gillette Company, P&G, Wal-Mart and others on board,
working towards a viable solution in RFID.

So what is RFID (see panel on Radio Frequency
IDentification Tags)? Current product identification is a
generic bar code pasted on the product packaging, which is
then read by a line-of-sight laser scanner.This scanning is done
package by package, requires physical line-of-sight between
the laser reader and the bar code, and all this can finally only
establish the presence of a product from a generic family.
RFID is simply a microchip that is thin and flexible enough to
replace the bar code strip, and is placed on the product—
programmed to store the product's entire history: date of
manufacture, batch number, unique product code and so on.

A suitable reader is then used for scanning these tags.The
unique advantage is that the reader can function without the
need of line-of-sight scanning, and can scan numerous tags at
the same time. Akin to automated toll ways on the freeways,
where a reader on the booth pillar can read and debit the toll
fee from one or many cars that have toll cards on their cars,
this technology is now making inroads into the retail sectors.

An understandably cagey Sodha has many big names on
his client-list, and his labs are working towards reducing the
cost of the ID tags. “Today we are seeing the possibility of a
million tags put into use, and the tag price remains over a
dollar. But with a billion in place, we should be able to come
under a dime, and over five billion…I'll break the nickel,”
claims a wistful Sodha. Matrics is involved in the entire
chain—with tags, readers and antennas, and the backend
middleware, which finally integrates all the data into an XML
pipe for client use.

Sodha's Matrics is also pushing the tags' range. Its latest
product is capable of scanning over 20 feet. So what are the
implications of this technology and Matrics' products?
“Imagine large supply chains which have hundreds of product
ranges and hundreds of thousands of products in actual stock.
There is a definite lag in the chain and stock movement
control. RFID will simply put this chain on real-time speed,”
says Sodha. As each product gets its own unique identification
tag, it can be tracked all the way from the plant to warehouse
to store-shelf to the consumer. “The team back in the
corporate office can actually see each can of their sauce or
soup move from place to place, and can take action to
supplement stock—all this without depending on human
resources at all these manpower-intensive areas,” exultsmicrochip
Sodha.

The RFID will also help in sorting legal wrangles.
“Remember the case of Firestone tires some time back? RFID
would have helped in identifying exactly which tires were
faulty, where they were made and when they got fitted on the
car.This is how close we can get with this technology,” claims
Sodha. He lists other fields like asset tracking, people
tracking, baggage tracking, court-systems, and hospital
tracking. “ When RFID is deployed in any or all of these areas,
you don't have to go looking for your product. It will tell you
where it is,” says Sodha.

As one of his investors says, “This is one very hot idea.”
While there are other players like Alien Technologies in the
Valley and SCS in San Diego, Sodha feels the market is young.
“The bar codes were invented in the seventies, and came to
mass use only in the early nineties. I see RFID taking at least
another five years, before becoming a mass-use product. But
this is where the technology will move to,” assures Sodha. He
runs Matrics with a very tight team, equally split between the
labs and sales. Most of his manufacturing is sourced out of
Taiwan and China, and he is looking at Bangalore for support
in the near future.

“Expect products to talk to you. Imagine your shopping
cart has a screen that tells you what your tally is, as you pick
and drop products at random.You don't need to calculate your
bill, your shopping cart will do it for you in five years or less,"
says Sodha.As Matrics enables this seamless, people-less supply
chain system, it marks yet another success for Sodha.