Now it's almost a year since UPM Raflatac, RFID tag and inlay manufacturer, announced that it is taking part in the largest retail RFID pilot project in China. The company had been selected by retail giant METRO Group to supply its Rafsec G2 ShortDipole RFID inlays for an innovative pilot scheme to track products along the supply chain from China to Germany.

It turned out that the big bet put by german giant has proven to be promising because Metro has expanded the use of smart tags from its stores in Europe to key producers in China as the German retailer moves to optimize its global logistics chain. According to ComputerWorld UK:

A three-month test, launched this week in Hong Kong, will require boxes and containers of products destined for Metro's distribution centre in Unna, Germany, to carry RFID (radio frequency identification) tags.

The pilot is part of the company's Advanced Logistics Asia (ALA) program, which kicked off in October 2006. The goal is to have more accurate, real-time data that will help the retailer improve control over its international supply chain, resulting in lower warehousing costs and fewer out-of-stock situations, according to a Metro spokesman.

For the Hong Kong pilot, Chinese suppliers can either fit passive RFID tags to their shipments themselves or allow a consolidator to manage this process. The passive chips have no energy and a short reading distance, the spokesman said.

Metro is collaborating with several IT companies, including IBM, Intel and SAP, and more than 40 additional consumer goods and technology suppliers to develop RFID systems for the retail sector. The retailer, which generated more than £40bn in sales last year through its 2,400 stores, operates Europe's largest RFID test bed.