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The China Syndrome

In going forward with radio-frequency identification, there are three initials that are fundamental because they encompass all aspects of the challenge.

Deloitte's John Greaves, left, speaking recently to Packaging World's editor Patrick Reynolds.
Deloitte's John Greaves, left, speaking recently to Packaging World's editor Patrick Reynolds.

The three are f, t, and d, which represent frequency, technology, and data, the basic components of an RFID-based solution.

China has never been involved in these considerations until now.

Those who buy product from China have never had to consider the “China Syndrome.” We have never had to contemplate the upgrading of the China production model beyond basic production of a specified product and locally produced bar-code labels. In many cases, even this task was conducted at destination rather than origin.

We’ve never had to contemplate the added cost of training the Chinese skill set to an awareness of modern and sophisticated enterprise resource planning (ERP) or the integrity of data links.

It has rarely been the responsibility of the Chinese Producer to carry out the validation of the label, whether or not it is a bar code or human readable. I am sure all have smiled at the occasional misspellings as I am sure Chinese consumers smile at some of ours.

Electronic product code (EPC), even at case level, requires constant verification and alignment with tools such as data synchronization hosted in large information technology architecture. It is neither compatible nor efficacious with a local ERP pushing out a production order for “10ꯠ red track suit tops, size small, fabric as delivered, cut to xxx.” It is essential that the alignment is with the master ERP in the buyers’ U.S., European, Australian, or African home office or global data center contemporaneously issuing EPC numbers to individual tags.

The very basis of EPC as a coding system, and one of its greatest benefits, is the ability to singularly identify product at source and enable total product visibility through the supply chain. Benefits gained by the use of EPC in this fashion are measured in the millions of dollars per day even at case level. EPC is, however, a code, it is not RFID. EPC is in the third of our initials, data.

Why China, why now?

Why is China suddenly the concern?

Firstly, because of frequency. Recent announcements by government representatives and quasi-governmental agencies in China have indicated that China will not be the “victim” adopter of regulations imposed from afar, but in fact may well be self-determining in allowing the use of RFID at ultra-high frequency in China.

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