RFID Container Pilot Project

Abstract: During the first quarter of 2005, the next step in using RFID as a means of identifying and tracking merchandise at a higher level of aggregation will be tested. IIJ Group plans to participate in a Japanese government RFID pilot project providing network and system environment for the world’s first shipping container RFID. If successful, this effort will contribute to a higher level of accuracy and supply chain security, while reducing the cost of direct materials associated with shipping and logistics services.

During the first quarter of 2005, the next step in using RFID as a means of identifying and tracking merchandise at a higher level of aggregation will be tested. Internet Initiative Japan Inc. (1), one of Japan’s leading Internet access and comprehensive network solutions providers, announced that it will participate along with IIJ Technology Inc. (2), its 67.9% owned subsidiary. They will test Radio Frequency ID tags (RFID) on international shipping containers in the physical distribution industry. This test is part of the FY2004 RFID Pilot Project that is being run by the Japanese Ministry of Economy, Trade, and Industry. The pilot project involves multiple industries and is the world’s first full-scale test of RFID in international shipping. It will cover a total of 20 factories or ports, with 4 sites each, in Japan and overseas.

In this test, the IIJ Group will provide network infrastructure and the EPC System, a system that enables the general recording, referencing, and updating over the Internet of information tied to RFID tags, such as tag code, association, and history. It uses technology that complies with the latest standards advocated by EPCglobal, and provides a basic tag information management system that is highly versatile and expandable.

The EPC System also provides more generalized and flexible use than closed use in a certain company or industry. The pilot test will use the EPC System to demonstrate how RFID can increase distribution efficiency by improving the overall process along trade lanes, including at the point of origin in the factory, in land and sea transportation, and at the final destination. For example, by attaching tag information to containers, pallets, cases or individual products and managing the information via the EPC System, the entire path and history of the freight in the physical distribution process is made visible. This enables the tracking of goods that have left the port and determining when shipments are received at the warehouse. (4)The IIJ Group has been actively involved with RFID tag operations for the past few years. In 2003, IIJ developed the world’s first EPC System and participated in another RFID pilot project with a large apparel maker. In 2005, IIJ will begin offering an Auto-ID Solutions Service that enables customers to implement RFID tag systems more easily by using EPC System components. IIJ is committed to this fast growing technology and believes it will provide yet another outlet for IIJ to expand its business. By staying at the forefront of new technologies such as this, IIJ continues to demonstrate its industry-leading technological expertise and dedication to continual innovation.(5)

References:

(1) Internet Initiative Japan Inc. (IIJ, NASDAQ: IIJI) is one of Japan’s leading Internet-access and comprehensive network solutions providers. The company has built one of the largest Internet backbone networks in Japan, and between Japan and the United States. IIJ and its group of companies provide total network solutions that mainly cater to high-end corporate customers. The company’s services include high-quality systems integration and security services, Internet access, hosting/housing, and content design. [Business Wire via NewsEdge Corporation : TOKYO—(BUSINESS WIRE)—Nov. 30, 2004]

(2) IIJ Technology Inc. (IIJ-Tech) was established in November 1996 by IIJ, Sumitomo Corp., Itochu Corp., Sumitomo Electric Industries, Hitachi Software Engineering, Sun Microsystems, Toyota, Hewlett Packard Japan and others. IIJ-Tech provides comprehensive Internet systems integration and consulting services for corporate networks and e-commerce systems. [Business Wire via NewsEdge Corporation : TOKYO—(BUSINESS WIRE)—Nov. 30, 2004]

(3) Supply Chain Management Review , 12/1/2004

(4) NewsEdge Corporation : TOKYO—(BUSINESS WIRE)—Nov. 30, 2004

(5) Supply Chain Management Review , 12/1/2004