SAN DIEGO — Oracle is introducing a new version of its warehouse management software next summer that will include radio frequency identification and electronic product code capabilities, the company said last week.

Wal-Mart and the Department of Defense want major suppliers to use RFID tags on pallets by 2005.

“The potential for improved process efficiency, inventory control and, ultimately, cost savings are substantial,” said Keith Morrow, chief information officer and vice president of Information Systems for 7-Eleven, an Oracle E-Business Suite customer, which has been evaluating RFID technology.

Oracle’s new software will enable pallet and case-level tagging for automatic processing of inbound and outbound shipments, helping companies identify, track and manage shipments through the supply chain and make better decisions on production, stock levels, security and deliveries.

Oracle is seeking to create RFID standards for the industry by making the software compatible with RFID tags, reading and printing devices from leading companies including Alien Technology Corp., Intermec Technologies Corp. and Zebra Technologies. Oracle Warehouse Management will use both Oracle Database 10G and Oracle Application Server 10g.

RFID technology includes tags and reader devices that use radio waves to automatically identify items. It has been gaining momentum with suppliers, distributors, manufacturers and retailers for its ability to eliminate line-of-site processes — such as manual bar code scanning — and automate critical supply chain transactions.

EPC, a new numbering scheme for identifying products in the supply chain, is also gaining acceptance.

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