Directions set for RFID

To encourage the use of radio frequency identification system (RFID) technology in Thailand, the Software Industry Promotion Industry Agency (Sipa) has set a direction for RFID development in four key areas.

They include the development of RFID in logistics systems, retail businesses, animal tracking, and for near-field communication applications.

Since RFID will be increasingly used and will bring new opportunities for local hardware and software development, the agency has to prepare users and developers for the adoption of new RFID technology.

Sipa has also worked with several organisations including the National Electronics and Computer Technology Centre (Nectec), RFID Cluster under Thailand Embedded Systems Association (Tesa) and universities, to develop pilot projects to showcase the use of RFID in each area.

As the agency believes the use of RFID in logistics systems will play an important role, it has developed a project to use RFID to help improve logistics processes for Thai jasmine rice.

Called ERP/Logistics for Thai Jasmine Rice, the project is to adopt RFID technology to improve the existing logistics system for rice supply chains.

Sipa's RFID expert Santi Suraratanam said the agency plans to conduct a pilot project in three provinces, Roi Et, Khon Kaen and Maha Sarakham. He said these provinces have high potential to conduct the pilot test as they produce approximately 1.5 million tonnes of the rice annually, about 27 per cent of Thailand's total production.

The project is underway in Khon Khan province. Sipa's Khon Khan branch has invited a rice mill in the Khon Khan Co-operative Community to conduct the pilot test. RFID, he said, would be implemented to improve logistical efficiency between the rice mill and the warehouse.

"We want to prove the use of RFID in a real situation and see how efficient it could be," Santi said.

RFID in logistics uses computer chips to store data, which is then transmitted wirelessly by a tiny antenna to a receiver. The chips, embedded in tags, can track pallets in warehouses and allow rice owners to trace their products from origin through to the destination.

Santi said through the project, the agency hoped to showcase the use of local software in the logistics process. The success of the project would help create guidelines for local software developers, especially those who develop ERP and supply-chain management systems, to design add-on systems to serve RFID technology in this area.

He said that designing ERP software to use with RFID technology requires the adoption of the EPC (electronic product code) global standard. EPC, when used with RFID, can uniquely identify individual products, giving a different electronic signature to each product item, and this allows supply chains to trace products from origin to destination.

Sipa also plans to expand RFID in logistics to test with other agricultural products such as sugar or tapioca powder, to improve the efficiency of their supply chains.

The retail industry, meanwhile, is another area with potential for the adoption of RFID technology.

 It's expected that RFID in the near future will replace the barcodes now used in retail businesses. This, Santi said, would offer huge opportunities for local RFID hardware and software developers.

Many leading retail stores including Wal Mart have plans to adopt RFID, so products sold in the stores will have to come with RFID tags. This will drive all manufacturers who supply products to Wal Mart to adopt the technology as well.

"In Thailand, we believe the use of RFID in retail businesses will start from 2008. At that time, many local manufacturers will begin to attach RFID to their products as the cost of RFID chips will also come down to less than Bt1. This will encourage the widespread use of RFID in the retail business," he said.