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RFID for Business Efficiency

Mr Lam Chuan Leong, Chairman Infocomm Development Authority of Singapore RFID Seminar, Raffles City Convention Centre, Padang Room

Mr Lam Chuan Leong, Chairman
Infocomm Development Authority of Singapore
RFID Seminar, Raffles City Convention Centre, Padang Room
Singapore, 02 November 2004

Good morning
Distinguished speakers,
Ladies and gentlemen,


Overview on why IDA is promoting RFID

1. In May, I spoke of the growing importance of RFID as a strategic tool especially in the logistics and transport sectors. The use of RFID since has been growing and promising companies great cost savings. Today, I would like to share with you what has been taking place in the industry and IDA's efforts towards more adoption of RFID in Singapore.

2. Some examples of the increasing use of RFID. In the US, Wal-mart has mandated that its top 100 suppliers to have their pallets and cases with RFID tags starting next year. It expects to save USD8.4 billion1 per year when RFID is fully deployed throughout its supply chain and in the stores.

3. Other examples: the US FDA (Food and Drugs Administration) recommending the use of RFID tags on controlled drugs by 2007 to counter grey-market and counterfeit drugs; Ford using RFID tags in their forklifts; Avis in their car rental in Puerto Rico to track mileage, fuel and servicing needs; and Coor Brewing Company (the world's largest brewer on a single site) in their keg and case inventory tracking.

4. In May, IDA announced our RFID development strategy along 3 thrusts:

A: Alignment of Frequency spectrum and standards for global interoperability
B: Building capabilities to develop new intellectual property
C: Collaboration to catalyse adoption of RFID in key sectors

Alignment of Frequency Spectrum and Standards for Global Interoperability

Why is frequency spectrum revision important to Singapore's RFID development?

5. Aligning the frequency and power output limits with international standards is important so that technology players can develop and deploy RFID systems widely. Our RFID applications must inter-operate with the US and European systems to allow the physical movement of goods across borders to be tracked with the same RFID tag.

6. IDA will be therefore be allocating 2 spectrum bands for companies to start pilot deployments of RFID applications. These bands are compatible with the Europe and US markets respectively. The power output limit will be 0.5W without licensing for both bands and 2W with licensing for the 923-925 MHz band only. We will monitor the effectiveness of these spectra in industrial deployments, and make further adjustments if necessary.

Building Capabilities

The importance of R&D in RFID development

7. As RFID is relatively new, R&D is on-going in some key areas such global inter-operability of RFID systems, and the reliability of RFID when used in an environment with high liquid and metal content.

8. Many local companies have taken up the opportunities to do R&D in RFID. For example, Tunity is developing a multi-frequency RFID tag for frequency interoperability.

9. Another local company, GT & T Engineering, is developing an intelligent RFID tag that can 'talk' to other tags so that information can be relayed accurately to the final data collection point. When this is used in a warehouse management scenario, it means that the tag on one pallet can 'talk' with the tag on another pallet. With this cascading function, there is a multiplier effect. Pallets that are located further away which previously could not be located can now be traced for real time monitoring and retrieval.

The importance of Infrastructure in the RFID development

10. NOL, APL Logistics and SUN Microsystems will be jointly setting up the RFID Testing and Solutions Centre in Singapore. This is the first RFID test and compliance centre in Southeast Asia. It will provide companies with the necessary compliance testing and checks before tagging the goods. Specifically, the Centre will locate the optimal position to tag for the most accurate reading since each product has its own customised packaging. At the same time, it will free up the manufacturers from having to do their own tagging.

11. It is important that the Centre is located here in Singapore. For the tracking of the entire movement of goods to be effective, it is essential that they are tagged as close to the point of origin as possible. Hence Singapore as the logistics hub in the Asia Pacific is well positioned to play this role. It is important that we have as much goods flow through Singapore to be tagged before shipping them out again. Therefore, we want to work towards attracting more of these regional RFID infrastructure services to put Singapore in the centre of the Asia Pacific RFID map.

The importance of industry benchmark in RFID development

12. By its nature, RFID must be regional and global. We have to work closely with others through alliances. The Singapore RFID Alliance was formed two months ago. Ms Chong Chiet Ping, the Chairman of the Singapore RFID Alliance, will share more of the Alliance activities with us later in the seminar. We want to grow it into an Asia RFID Alliance to develop reference architectures, share best practices and align standards.

The importance of manpower capability to the development of RFID

13. As in all emerging areas of technology, we need to help increase the supply of the relevant skill sets. We are working with the relevant organisations and training bodies to do this. For example, later this month, two RFID courses will be launched. The first is by The Logistics Institute Asia Pacific in collaboration with Cambridge AutoID Labs; the second course is by the Singapore Manufacturers' Federation in collaboration with RFID Focus2.

Collaboration to Catalyse Adoption

14. On the end user RFID adoption, several encouraging deployments have taken place in Singapore.

15. In the aviation sector, Airbus has chosen Singapore as the first Airbus Centre outside of Europe to implement RFID to keep track of the tools loaned out to aircraft maintenance centres. This is driven by the mandatory requirement by the airworthiness authorities for all airlines to track essential data such as historical usage and maintenance. With the use of RFID, Airbus is able to increase the availability of tools due to quicker turnaround time made possible by more efficient receiving and issuing processes. It also enables Airbus to achieve higher data accuracy with automatic data capturing.

16. In the manufacturing sector, Hewlett Packard is conducting a trial together with one local supplier and one logistics service provider to achieve full traceability of their server and storage product line. The trial will also help HP achieve maximum efficiency in their distribution process.

17. In the logistics space, we have YCH, the leading home grown logistics and Supply Chain Management company. Leveraging on Singapore's status as a logistics hub, it is implementing RFID to manage its bonded warehouse. This will enable YCH to enhance the efficiency of its operations and improve visibility of goods movement - something that is very important for critical supply chain operations within a bonded warehouse.

18. In the retail space, Grocery Logistics of Singapore (GLS), the central warehouse and distribution arm of NTUC Fairprice, is working on a pilot to adopt RFID within its distribution centre. It aims to enhance its operations and reduce costs through more effective shipping and tracking of products, from coffee powder to razors to diapers and more. The technology will also help manage the return of products from the stores.

Call to Action

19. In implementing RFID solutions these companies are convinced that the benefits of RFID are practicable and realisable soon.

20. IDA would like to help more companies to build up their RFID capabilities. It will be issuing a Call-For-Collaboration (CFC) called "RFID for Business Efficiency".

21. I would like to invite you to come to the industry briefing on 18 November and participate in the CFC.


22. To conclude, the industry has committed to invest more than S$12 million. We are optimistic that the RFID initiative will generate ICT spending of S$50 million. Please come forward to join those in Singapore and elsewhere in the world which have deployed RFID as a strategic tool for the future.

23. Thank you.

Notes to Editors:

1 eWeek, 15 September 2003 "Case Study: Wal-Mart's Race for RFID"
2 RFID Focus is a start-up media and RFID resource company. It aims to promote RFID awareness and applications through various channels such as web portals, e-zines, publications, seminars, as well as RFID training programmes.

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