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Declaration of Plan to Introduce 100 Billion Electronic Tags for Products in Convenience Stores Formulated To solve social challenges lying in supply chains

The Ministry of Economy, Trade and Industry (METI), Seven-Eleven Japan Co., Ltd., FamilyMart Co., Ltd., Lawson, Inc., Ministop Co., Ltd., and JR East Retail Net Co., Ltd. (operator of NewDays convenience store chains) reached an agreement on introducing electronic tags for all products sold in their convenience stores by 2025 under predetermined conditions. The number of these products is estimated to be 100 billion products per year. Based on this agreement, METI and the companies jointly formulated a statement called “Declaration of Plan to Introduce 100 Billion Electronic Tags for Products in Convenience Stores.”

1. Background

The retail industry in Japan has been facing a labor shortage and an increase in labor costs affected by the impact of the declining birthrate. It also faces a variety of issues across its supply chains, including food loss and returned food, despite achieving highly efficient logistics through mass production and frequent deliveries.

With the potential of causing an increase in the burden on on-site employees and in the cost of operations, companies in the retail industry have been undertaking a variety of measures to overcome the issues.

2. Declaration of Plan to Introduce 100 Billion Electronic Tags for Products in Convenience Stores

As one tool in overcoming a number of  practical difficulties related to supply chains, METI focused on electronic tags* and held working-level meetings** to discuss related issues, bringing together business operators running convenience stores and other stakeholders with significant interest in this technology.

As a result of discussions, METI, Seven-Eleven Japan Co., Ltd., FamilyMart Co., Ltd., Lawson, Inc., Ministop Co., Ltd., and JR East Retail Net Co., Ltd. reached an agreement concerning an introduction period and other conditions for utilizing electronic tags at their convenience stores, and they formulated the declaration as follows.

Text of the declaration

  • By 2025, Seven-Eleven Japan Co., Ltd., FamilyMart Co., Ltd., Lawson, Inc., Ministop Co., Ltd., and JR East Retail Net Co., Ltd. (operator of NewDays convenience store chains) should attach electronic tags to all products sold in their convenience stores (estimated to be 100 billion products per year) and achieve individual-item monitoring for every product.
  • In this process, the companies must consider providing a portion of the information that they acquire through using such electronic tags to supply chains.
  • The companies should start electronic tag demonstrations around 2018 by attaching such tags to products in their convenience stores in certain areas, aiming to achieve individual-item monitoring for every product.

Qualification conditions involving the declaration

  • The companies should set the unit production price of a “dissemination-type” electronic tags to one yen or less (cost taken for processing such tags, including a combination of an IC chip, antenna and creating seals), to be attached to all applicable products (some products have special disqualifying conditions for the time being, e.g., those warmed by microwave, stored in metal containers, frozen/chilled and ultra-thin).
  • They should develop a system for fully accomplishing source tagging, where manufacturers themselves attach the electronic tags to their products, and in which nearly all their products can be incorporated into their system using radio-frequency identification (RFID) technology.

Electronic tags can be utilized in a variety of business models, not limited to the convenience-store businesses. Successful efficient management of all products with electronic tags is expected to contribute to realizing increasingly sophisticated distribution systems.

According to the road map that they formulated along with the declaration, METI and the companies above will strive to advance efforts to overcome these practical challenges related to supply chains under government-industry-academia collaboration.

Notes:
*1: Electronic tags
An electronic tag is a tool which is used to remotely identify individual items using radio waves. Like barcodes, attaching electronic tags to nearly all products in stores and using radio waves to read the information stored in them will help users monitor a variety of data on products, e.g., what type of products are sold, when and at which store, and how many of such products have been distributed to the public.

The utilization of electronic tags is expected to bring about a variety of ripple effects to retailers, such as acceleration of the work at cash registers, product inspections, and inventory clearance, prevention of shoplifting with security gates, and reduction of food loss by making expiration-date management more efficient.

Moreover, information sharing through electronic tags between businesses involved in supply chains, including manufacturers and wholesale businesses, will enable such businesses to reduce waste across the manufacturing, distribution, wholesale and retail sectors, e.g., flexible adjustment of production amounts by manufacturers based on the amount of inventory distributed, or advancement of joint deliveries through sharing information on unused space in delivery vehicles.

**2: Outline of the working-level meeting
Organizer: METI
Secretariat: Mizuho Information and Research Institute, Inc.
Period: During FY2016
Chair: Dr. Jin Mitsugi, professor, Graduate School of Media and Governance, Keio University
Subject: Participants held discussions on approaches to the utilization of electronic tags, focusing on what issues should be solved by whom and when, through sharing technological trends in electronic tags and reporting the results of a joint demonstration test conducted by Lawson, Inc. and Panasonic Corporation.

Participants:

  • Retailers: Seven-Eleven Japan Co., Ltd., FamilyMart Co., Ltd., Lawson, Inc., Ministop Co., Ltd., and JR East Retail Net Co., Ltd.
  • Vendors: Avery Dennison Japan, Dai Nippon Printing Co., Ltd., Denso Wave Incorporated., Toshiba Tec Corporation, Toppan Printing Co., Ltd., NEC Corporation, Panasonic Corporation, Fujitsu Ltd., and Fujitsu Frontech Ltd.
  • Industry associations: Japan Cosmetic Industry Association (Sunstar Inc.) and Japan Franchise Association
  • Expert: Distribution Systems Research Institute

Appendices:

Release date

April 18, 2017

Division in Charge

Distribution and Logistics Policy Division, Commerce, Distribution and Industrial Safety Policy Group, Commerce and Information Policy Bureau

Ministry of Economy, Trade and Industry1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8901, Japan Tel: +81-(0)3-3501-1511
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