RFID Opportunities in Asia

The number one challenge facing organisational supply chains is the ability to make sense of the overwhelming and disparate data, according to IBM’s latest Global Chief Supply Chain Officer study, which interviewed some 400 global supply chain executives.

The study, “The Smarter Supply Chain of the Future”, found that (70 percent said) this is the biggest challenge because as more information is made available, proportionately less is being effectively captured, managed, analyzed and made available to people who need it.

“Unfortunately, because of cost and resource issues, these issues do not rank highly in terms of implementation activity to solve these problems,” observes Sanjeev Nagrath, partner and global supply chain management leader, IBM.

“Only 16 per cent of respondents indicated that they are effective at integrating information and visibility across the supply chain with external partners. The leaders tend to have better planning with suppliers, replenishment with customers, inventory planning, and shared real-time data with partners,” says Nagrath.

Smart devices – such as sensors, RFID tags, and GPS systems – and integrated ERP systems can step in here to capture real-time visibility of forecasts and orders, schedules and commitments, pipeline inventory, and shipment lifecycle status.

Market opportunities

According to projections by Frost & Sullivan, the passive UHF tags market in the Asia Pacific region is forecasted to capture the largest market share of RFID tag volume. This growth is largely due to ratification standards and recent technology enhancements introduced over the last few years which offer real business value to end users.

Frost & Sullivan research analyst Richard Sebastian observes that manufacturing, shipment tagging and logistics applications that have typically sustained the Asian market have been hit by the economic recession and export cuts.

He advises vendors to focus on applications that are simple, unique and innovative, and not depending on multiple supply chain partners. Activities like asset management will continue to need RFID applications, and in verticals the food industry, oil & gas, and environmental health & safety. Asianheadquartered firms need to seize the advantage and be seen as brand leaders in the region.

Asian players

Indeed, a number of Asian firms in China and Japan are stepping into the RFID market. Invengo, a 16-year-old Chinese outfit that launched North American operations earlier this year, was the first Chinese RFID company to go public. It first developed a freight car identification system for China Railway across 70,000 km of rail lines throughout China. It has since expanded into HF and Gen2- standard UHF readers, tags and inlays.

Mitsubishi and device manufacturer Omni-ID of California have just formed a partnership (March 2009) in response to the growing RFID market throughout Asia. Mitsubishi will offer its customers Omni-ID’s three standard passive UHF RFID tags suitable for a variety of applications and conditions, along with access to Omni-ID’s service bureau, which provides users with one-stop shopping for RFID tags, label design and data programming.

Mitsubishi will also market the Omni-ID On Demand, providing users with the ability to print and commission mount-on-metal RFID tags on site. Omni-ID recently indicated plans to expand heavily in the Asian market and acquired an additional US$15 million in funding to fuel the expansion.

Omni-ID was also recently awarded the 2009 Asian Frost & Sullivan Best Practice Award for the passive RFID tag market. “In the face of these challenging economic times, Omni-ID maintains an unwavering commitment to growing its presence in Asia and extending the benefits of our innovation to the region,” according to Tom Pavela, President and CEO of Omni-ID.

Other RFID applications are also emerging in Asia’s agri-business sector, for “farm-to-fork” tracking of food and beverages – more on that in a future column.