30 March 2006 - Speech By Mr Chan Yeng Kit, Chief Executive Officer, Infocomm Development Authority of Singapore, At The Think Solutions: Real Time Supply Chain Management II, Raffles City Convention Centre.
Speech By Mr Chan Yeng Kit, Chief Executive Officer, Infocomm Development Authority of Singapore, At The Think Solutions: Real Time Supply Chain Management II on 30 March 2006, Raffles City Convention Centre.
Robert De Souza, Executive Director, The Logistics Institute - Asia Pacific,
Boon Swan Foo, Managing Director, A*Star,
Ladies and Gentlemen,
1. Singapore is widely recognised as one of the most important nodes in the global supply chain network. Many companies have chosen Singapore as a hub for their logistics operations because of our strategic geographical location, efficient operations, and excellent physical infrastructure and connectivity.
2. Infocomm Technology has also played a key role in differentiating Singapore as a logistics hub. Key examples include the TradeNet and Portnet IT platforms. They have streamlined information flow between logistics players, port operators and the government and have contributed to the efficiency of our import, export and trans-shipment processes.
3. In recent years, RFID has emerged as a key technology that could dramatically improve logistics and supply chain efficiency. RFID will allow automated tracking of logistics units as they move from place to place and this new wealth of location information opens up new possibilities for companies to optimise their supply chain processes.
IDA's RFID Initiative
4. Recognising RFID's potential, IDA launched our $10million RFID initiative in May 2004 to catalyse the development and adoption of RFID in Singapore.
5. In just under two years, we have made significant progress. Besides being the first country in Asia to allocate RFID frequency, we have also launched RFID courses, set up RFID test centres, and seeded numerous capability development and adoption projects. All these have resulted in 380 professionals trained in RFID through the courses and a commitment by 27 companies to invest more than S$30million in RFID projects. These efforts have created a strong branding for Singapore's RFID industry.
Creation of a Vibrant RFID Industry
6. Alongside the strong branding for Singapore is the emergence of a vibrant RFID industry. Companies such as NEC, IBM, NOL and SUN have set up RFID centres in Singapore to service their customers in the region. Some of the services include RFID testing and compliance as well as development of RFID solutions. This is a good testimony to Singapore's status as an RFID hub, and further augments Singapore's position as a key trans-shipment and logistics hub.
7. At the same time, local companies like Tunity, GT&T, and SmartID have built up significant RFID expertise and made forays into the overseas markets, selling their products and services beyond Singapore. Their regional business can be said to be very much boosted by their association with Singapore's strong RFID brand name.
8. In the area of research and development, A*STAR's Research Institutes have also built up RFID capabilities and are working with industry to commercialise the intellectual property they have developed. I will leave it to Swan Foo to elaborate further.
Logistics Industry Has Embraced RFID
9. Coming to the theme of today's seminar, which is logistics ICT in Singapore, I am happy to note that our manufacturing, logistics and fast moving consumer goods industries are one of the earliest to embrace the technology. Chain master companies in Singapore, from manufacturers such as Hewlett Packard to retailers such as NTUC Fairprice and Cold Storage, are committed to use RFID to track and monitor supply chains carrying goods worth more than $900 million. Logistics companies such as NOL and YCH are also at various stages of implementing RFID to manage their trans-shipment supply chains which, when fully implemented, will handle goods worth hundreds of billions of dollars. This suggests the growing importance of RFID as a key supply chain technology. The reasons for them are compelling. Not only does the use of RFID help these companies reduce operational costs, it also helps them strengthen existing business relationships and win new deals with RFID-enabled manufacturers and retailers. Many invaluable lessons were learnt and some of these will be shared later today by the speakers.
10. Another piece of good news that will accelerate the adoption of RFID is the falling prices of RFID tags. Since two years ago, their prices have fallen by more than half to between US10-20 cents from the earlier US50 cents per tag. Hence we are expecting RFID adoption to pick up in the coming year as prices continue to fall.
Expanding and Harmonising Frequency
11. To further spur adoption, IDA will expand the RFID frequency allocation based on industry feedback to cater to the growing demand of RFID applications. The existing bandwidth allocation is from 923MHz to 925MHz. IDA will more than double this to 920MHz to 925MHz while keeping the power output limits unchanged. The new 5MHz bandwidth will allow for more types of RFID applications to be deployed in Singapore and allow for better performance as well.
12. Besides the expansion of the frequency band within Singapore, significant work has been done at the Asia Pacific level towards regional harmonisation. Singapore rallied ASEAN to agree in-principle to harmonise our RFID spectrum allocations in the 860 MHz to 960 MHz range. IDA also pushed for and obtained approval for the draft Asia Pacific Telecommunity Recommendation on Spectrum for UHF RFID. The Asia Pacific Telecommunity is a forum made up of telecomm regulators and service providers in the Asia Pacific region, and this draft recommendation will encourage member countries to harmonise their RFID spectrum allocation in the same range. These are positive steps towards achieving interoperability of RFID in Asia.
13. This interoperability of RFID is indeed very crucial given the global nature of many companies. Let me give you an example. DENSO Corporation, the manufacturer of automotive system components, including car air-conditioner units, for car makers, has completed a cross-border RFID trial to track the movement of returnable boxes used to transport car components between Singapore, Malaysia, and Thailand. 953MHz tags optimised for Japan's RFID frequency regime were used and read in these countries with only a slight effect on performance. This shows that tags and readers of slightly different frequencies can still interoperate across borders, as long as they are harmonised within the 900 MHZ UHF band.
Private Sector Taking the Lead
14. Given what I have shared so far, the RFID industry in Singapore has certainly reached a level of maturity. Technology vendors are seeing real business opportunities while end users are starting to realise business benefits and potential. During this time, the Singapore RFID Alliance (SRA) with IDA as the Secretariat has successfully catalysed the adoption of RFID by spreading awareness through various speaking engagements and also providing feedback to IDA on frequency allocation. The Alliance has also compiled an RFID vendor directory to showcase the RFID capabilities available in Singapore, and this directory can also be found on IDA's website.
15. With the maturing of the RFID industry, the Singapore infocomm Technology Federation (SiTF) has expanded the scope of its Wireless Chapter to include RFID. The re-branded SiTF Wireless-RFID Chapter will look into promoting and driving the use and application of RFID for widespread adoption. This is a good development as it is a strong signal that the private sector is building on the momentum that IDA has started to bring the technology to closer to mainstream adoption. We believe that the SRA and SiTF will drive greater RFID awareness and adoption across industry and bring RFID to the next level.
To Become the Supply Chain Nerve Centre
16. Moving forward, IDA will see how we can combine RFID and other infocomm technologies to turn Singapore into a high value Supply Chain Nerve Centre as part of the iN2015 infocomm masterplan. As a Supply Chain Nerve Centre, we envisage Singapore being the place from which companies use ICT to monitor and control their global supply chains, including those that do not even physically pass through Singapore. This will be supported by a world-class logistics infrastructure and new supply chain services using advanced ICT solutions. Hence we will need to work with the industry to catalyse and implement more iconic and high impact RFID projects.
17. This year, Singapore celebrates 25 years of Infocomm. We have certainly come a long way since we embarked on national computerisation in 1981. It has been a journey of tremendous challenges and outstanding achievements. Today, Singapore as a whole has benefited from the foresight and vision of many who steered the infocomm journey. For the logistics industry, the iN2015 infocomm masterplan is set to mark the next phase of this exciting journey. We will share more details of this at the iN2015 launch in June this year, and we look forward to your continued support.
18. Meanwhile, thank you and have a fruitful seminar ahead.