RFID will work reliably in Asia

RFID is likely to work reliably in Asia's retail supply chain, says Hewlett Packard (HP) after a successful trial of the technology with Cold Storage retail chain.

The year-long trial, which ended in April, saw the technology major working with Cold Storage to develop and implement an automated tracking system for cases and pallets using RFID.

Apart from increasing supply chain efficiencies, the trial aimed to prove that the technology will work dependably in a typical Asia Pacific retailer's distribution centre, even if it had a number of critical processes and environmental differences to US and European retailers already using the technology.

"RFID has matured in sophistication and is now increasingly used across a wide range of industries and applications as a critical technology tool to enhance business efficiency - either as a mainstream technology like in supply chains and logistics industries; government or security purposes" says Joseph Poon, vice president and general manager of services and technology solution group at HP Southeast Asia.

"We're seeing more investment being channelled into R&D for RFID applications," Poon says. "For instance, the hospitality industry is working with A*Star's R&D Centre to develop applications specifically for the hospitality industry."

The Infocomm Development Authority of Singapore (iDA) too has been working with industry players to develop RFID solutions for the public sector workplace.

"iDA has expanded the RFID frequency allocations of 923MHz - 925MHz to 920MHz - 925MHz, more than double the existing range, to cater to the increasing demand of RFID applications," Poon says, explaining that the improved system will allow users to select channels with less interference, resulting in fewer errors when reading RFID tags.

"This will also allow them to deploy RFID readers closer together to give more comprehensive coverage in warehouses and distribution centres in order to avoid blind spots."

 Slow on the uptake

In spite of government backing, RFID adoption in Singapore is still slower than what supporters of the technology would like it to be.

Explaining this phenomenon, Poon says it is likely that companies are adopting a "wait-and-see" attitude, as they do with most relatively new technology. It is also possible that organisations need a longer time to evaluate their needs and the likely benefits that the technology could bring.

Further, to experience the full benefits of RFID, the technology should be adopted across all links of the supply chain. "The other challenge in retail is to motivate a critical mass of early adopters across the entire supply chain including manufacturers, logistics providers and retailers. For the ROI to be realised, all players across the supply chain must adopt the technology."

According to him, incompatible standards may be yet another reason for companies to delay the rollout of RFID in their supply chains. "Those with overseas operations may still be unconvinced to take the RFID route because of conflicting standards, such as EPC-Global frameworks and frequency allocations."

This is because different countries allocate different spectra and standards, preventing the emergence of an international framework, he adds.

However, steps to create global standards have already begun. According to Poon, iDA's doubling of the RFID range here allows businesses to use these standards in Thailand and Hong Kong.   

Box story:

Counter counterfeit drugs with RFID

Jeroen Keunen, marketing manager of identification Asia Pacific at NXP Semiconductors believes an industry-wide adoption of RFID technology in the pharmaceutical industry can reduce the amount of counterfeit drugs entering the market.

"In this industry, RFID, in particular, Item Level Tagging (ILT) - putting RFID tags on every item - can reduce the number of counterfeit drugs entering the market somewhere along the supply chain to the patient."

Keunen says this is particularly important in a region still relatively open to the problem of counterfeit drugs. According to estimates by the Centre for Medicines in the Public Interest (CMPI), approximately 300,000 people in China die each year due to fake medicines. Meanwhile, the World Health Organisation (WHO) estimates that counterfeit drugs, which account for a dangerous 10% of the global market, cost the pharmaceuticals industry US$46 billion annually. The figure is expected to increase to US$75 billion by 2010.

"There are, therefore, enormous benefits for both the public and the pharmaceutical industry to deploy RFID technology," Keunen says.