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RFID's Silk Road

Because of its growing importance as a manufacturing center, Asia will play a pivotal role in the global adoption of RFID technologies.
By Elizabeth Wasserman
Jun 01, 2006—Asia is fast becoming the world's factory. Exports from Asia have grown over the past 50 years from 13 percent to more than a quarter of all worldwide trade today, or US$2.4 trillion, according to the World Trade Organization (WTO).

Fueling Asia's ascension is the fact that global companies—based in the United States, Europe and other parts of the world—have contracted with Asian manufacturers to make their products, because it's cheaper than maintaining their own factories in regions where worker salaries and overhead are costlier.

Asian companies are beginning to play a pivotal role in RFID's global adoption.

Now many of these global companies are faced with RFID tagging mandates from large retail chains in the United States and Europe. Most suppliers have taken the slap-and-ship route, tagging cases and pallets in their warehouses after goods have been imported from overseas.

Still, they believe that they can cut the cost of compliance by pushing RFID tagging back to the Asian factories where the goods are made. Not only would it save time and reduce labor costs, but the tracking of goods from manufacturing plants in Asia to store shelves in North America and Europe holds enormous potential for companies to realize a return on investment from RFID.

Ideally, Asian companies would manufacture cheap tags based on the standards embraced by EPCglobal, the international standards group backed by more than 800 companies, most of which are in North America and Europe. Those tags would be applied to goods made in the region, allowing tracking from source to transport overseas to eventual sale. Low-cost interrogators also could be made in Asia and sold to companies around the world.

That would put Asia in a unique position to drive the adoption of EPCglobal standards and facilitate the much-anticipated global RFID-enabled supply chain. To that end, many Asian governments—including those in Hong Kong, Japan, Singapore, South Korea and Taiwan—are financing pilots of RFID technology in an attempt to carve out a role for their economies in the RFID industry. Governments and private industry in Hong Kong, Japan, Malaysia, Singapore and South Korea have been active in the development of international RFID standards.
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