NEW YORK - Wal-Mart Stores Inc., the world's largest retailer, is requiring all of its top 100 suppliers to have "smart tags" for better inventory tracking on their pallet shipments by early 2005.

Through radio frequency identification, or RFID, technology, Wal-Mart expects it will be able to "track, control and move inventory even more efficiently," said spokesman Tom Williams.

He said the retailer plans to work with suppliers to see what type and how much information should be on the smart chip. Wal-Mart announced its intent at a technology conference in Chicago earlier this week.

Unlike bar codes, which have to be read manually by laser or image readers, the tags emit radio signals that are picked up by warehouse readers, which transmit the data to a computer system. The U.S. military and several smaller retailers have already adopted the technology.

Wal-Mart has not announced its technology partners.