How Fast Will China Adopt RFID in the Supply Chain?

Filed in archive Supply Chain on September 27, 2005

The RFID Gazette recently had a thoughtful piece about RFID adoption in China. The article suggests that China will have to adopt RFID in order to sustain its low cost advantage in manufacturing, especially if the Yuan appreciates. Logistics costs and headaches will be a big driver.

While I can see The Gaz's point, let me take a contrarian viewpoint for the sake of getting some friendly debate and discussion going. I do not see a fast adoption path in China for RFID in the supply chain. Here are the countervailing circumstances against rapid RFID adoption in China:

1) China's RFID standard is still unclear. Will China follow the EPCglobal standard, or the Japanese version, or its own national standard (yet to be determined)? The lack of a clear standard will slow down market adoption.

2) The relatively high cost of hardware and RFID implementation projects is still an impediment. No matter how you look at it, and no matter where you are in the world, the typical supply chain/inventory tracking implementation costs a certain amount of money to implement.

3) China still has a cheaper alternative: human labor. Despite the potential for rising labor costs, it is still less expensive in China to hire more people to handle the same stuff RFID does.

So head over to the RFID Gazette, read what they say, and come back and offer your opinion.

Tags: RFID; business; supply chain