Post on 09-May-2015
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TOBACCO DISTRIBUTION SOLUTION
Using RFID Technology ～executive summary～
13th Jan. 2012
Current Malaysia’s Tobacco Situation？
Annual Tobacco Consumption Amount
23.3billion
（Yr 2009）
Tobacco Consumption Shift
（Billion）
18.7 20.8
23.3
10
15
20
25
2000 2002 2009
Public Health Concerns
Encourage Smokers to Stop
Prevent Youngsters from Smoking
Tobacco Price Shift
4
6
8
10
122
00
4
20
05
20
06
20
07
20
08
20
09
20
10
20
11
(Dunhill 20s)
(RM)
Tobacco Price Increase, same time, Tobacco Consumption has Increased!?
One of the MAIN reasons:
ILLICIT TRADE &
SMUGGLING
The MAIN Illicit smuggling Countries
Thailand
China
Indonesia
Cambodia
10%
20%
30%
40%2
00
4
20
05
20
06
20
07
20
08
20
09
20
10
20
11
Illegal Tobacco Ratio Shift
Annual Total Illicit Tobacco
About 9 billion
（Yr 2009）
Smuggled & Illicit Tobacco Market Price under
Estimated Profit from Illicit Tobacco Trade
RM 1Billion
Gov. Taxes Lost Estimated
RM2Bln.
From August, 2004
Special device:
Authenticity Check
Control illicit trade
…however, with little effect !?
Several factors
Illegal
tobacco
distribution
Production / Distribution Tobacco
Regulation / Investigation
People
Manufacturing control
Distribution system
SCM control
Tobacco price
Tax rate
Penalty
Custom inspection
Investigation
Detection device
Security technology
Syndicate Consumer attitude
Retailer attitude
Can be improved!
15% 1～2%
1 Licensing all participants in the tobacco business
2 Tracking and tracing systems from the points of manufacture to all points of sale
3 Traceable methods of payment
4 Strict scrutiny procedures in the selection of contractors during the supply process
5 Significant financial penalties for infringements
Key factor
“Supply Chain Control”
SUGGESTION
RFID Technology Application
Success in Supply Chain
“The U.K. government is sick of losing $7 billion in tax dollars every year due to the illegal cigarette trade. In order to avoid this problem in the future they are testing out a plan that implements RFID technology.” – May 13th 2011 RFIDiva
System
Distribution, Import/Export
Unique ID number Location / Status Info. Time stamped
Record Record Record
Production Sales
Tobacco tag information
• Unique ID number
• Manufacturer ID number
• Tobacco name / type
• Production date
• Location information etc.
Registration
Stick tag (Manufacturer)
Write production info. (Data lock)
Track & Trace
Update tobacco tag information
Location management
Record any abnormal status
Individual history tracking
Unauthorized move from factory.
Illegal distribution
Point of Sales
Tobacco tag invalidation（Kill）
D/B status update
Security
Unique ID number + TID
Encoded data lock function
Inspection
Visual inspection
Contactless scanning
Benefit？
Prevent terrorist & crime funding
Help prevent increase in smokers
Increase legal tobacco sales revenue by preventing Illicit Trade
Enhance Supply Chain Management efficiency
Final goal?
Prevent distribution of the illegal tobacco!!
Global Illicit Tobacco Trade Situation (For Reference)
Campaign for Tobacco-Free Kids in 2006 report
Illicit Tobacco Market Share
Gov. Loss(US$)
Global 11.6% 40.5Billion
High Income Nations
9.8% 17.6Billion
Mid & Low Income Nations
12.1% 22.9Billion
Globally Government Loss
> US$ 40.5 Billion
US$ 40.4 Billion
(Yr 2010)
Annual Sales Turnover
Illicit Tobacco
Ratio (%)
No data
0 - 5
6 - 10
11 - 20
21 - 30
30+
SERIOUS PROBLEM WORLDWIDE
Illicit Market Share (%)
30+ 21-30 11-20 6-10 0-5
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