Responses on Report of Consultancy Study on Smart City Blueprint for Hong Kong
Joint Submission by
GS1 Hong Kong
Hong Kong Internet of Things Industry Advisory Council
This response document represents the interest and voice of GS1 Hong Kong and Hong Kong IoT Industry Advisory Council members.
1) GS1 Hong Kong & Hong Kong Internet of Things Advisory Council
GS1 Hong Kong
GS1 Hong Kong is the local chapter of GS1®, a not-for-profit, global supply chain standards organisation that develops and drives adoption of global standards for businesses to identify, capture and share vital information about products, locations and assets. Currently, GS1 Hong Kong has over 7,000 corporate members, with 90% from SMEs, covering close to 20 industries including retail and FMCG, food and food services, healthcare, apparels, logistics, information and technology, etc.
GS1 Hong Kong’s mission is to enable Hong Kong enterprises to improve the efficiency, safety, and visibility of supply chains across multiple sectors and facilitate commerce connectivity.
GS1 and IoT
The term the “Internet of Things” was coined at the Auto-ID Center at the Massachusetts Institute of Technology (MIT) during the early days of RFID development work. In 1999, the vision was to connect “things” to object-specific data on the internet, which could then be accessed using a unique tag attached to the object. A set of standards was built around the three core concepts of identification, data capture and information sharing. That work spurred the creation of EPCglobal®, a GS1 subsidiary, and continues to be foundational to the GS1 system of standards. From this initiative, the Auto-ID Lab has been established to undertake continuous RFID and IoT-related technology research and development. Since then, GS1 standard was one of the key components of the blueprint for IoT.
Hong Kong Internet of Things Advisory Council
The Hong Kong Internet of Things Industry Advisory Council was established in 2013 with like-minded companies under the auspices of GS1 Hong Kong, to promote IoT innovations and broaden their adoption to uplift the competitiveness of local enterprises, and foster an IoT ecosystem for the continuous growth of this game-changing technology in Hong Kong.
2. Consultancy Study on Smart City Blueprint for Hong Kong
GS1 HK & IAC welcome the comprehensive study report (“Report”) which took reference of international practices, considered local challenges and comments after public consultation, with detailed and practical solutions for formulating the blueprint.
Based on the Report, we would like to make recommendations that evolve around the digital framework of a smart city development and the initiatives of the development plans.
3. Smart Object as the Key to Smart City
A key role in IoT or any smart city scenarios and services, besides citizens, is played by the concept of “SMART OBJECT”. A smart object is a physical/digital object augmented with sensing, processing and networking capabilities.
These smart objects could be food, drug, medical device, apparel, jewellery, etc., that people interact with, and hence show how people behave in choosing, purchasing, consuming and even discarding these objects. While a smart city is built for people, it is also necessary to track the movement of these smart objects to understand how people behave.
GS1 Hong Kong will illustrate with recommendations of initiatives how these smart objects can be applied in healthcare (smart healthcare), food (smart food) and retail (smart retail) industries that contribute to a smart city development, and what more are required to be done.
4. Recommendations on the Smart City Development Plan
4.1. Smart retail that contributes to smart economy and smart living
Government statistics show wholesale and retail trades account for 4.6% GDP in Hong Kong. Smart city development cannot omit the retail industry as it contributes to Hong Kong’s shopping paradise position, which also attributed to achieving smart living and smart economy.
With the emergence of omni-channel retailing and cross-border e-commerce trade, retailers are facing issues like speed-to-market, demands in item variety, product flow rate, product seasonality and effective inventory management. In response to these market conditions, an increasing number of companies in the industry have turned to RFID(Radio-frequency identification) item-level tagging (ILT) based on Electronic Product Code (EPC) standards, to effectively enable supply chain visibility, in-store inventory management and consumer journey analytics.
With RFID ILT application, retailers can also improve warehouse logistics, product ordering, in-store marketing, dynamic shelf pricing, after-sale engagement, social media connection and product lifecycle management with IoT technologies and solutions. They can offer consumers shorter delivery times, narrower delivery windows, and multiple choices for delivery options.
Major retailers such as Target, Kohls, Macy’s, Marks & Spencer, and Zara, etc. have begun to scale their initiatives as the benefits of RFID ILT begin to develop. And, even retail brands are enjoying the benefits of RFID such as Lululemon, Levi’s, and Adidas. According to Auburn University’s RFID Lab 2016 report, 96% of retailers have plans to start tagging apparel with RFID. According to Retail Wire, the use of RFID tags improves inventory accuracy by 32% and decreases out of stock item incidents by 50%. As a result, sales increase by 18%.
Locally, Chow Tai Fook has adopted a RFID-enabled inventory control system, featuring the use of RFID-enabled price tags; and Smart Tray backed by an Internet of Things platform. The application of Smart Tray is at shop level that facilitates customer servicing. With a built-in sensor, the tray displays product information of the jewellery pieces placed on it and can access other products’ information and stock data in any shop instantly with a few touches of the buttons. Along with other built-in functions such as price calculation, currency conversion, etc. which help frontline staff provide fast, professional customer service thus can streamline sales process and enhance customers’ shopping experience. It also helps collect big data for understanding customer tastes and preferences, shopping behavior, etc.
Retailers are ramping up smart stores to create more engagement opportunities with consumers. These stores of the future are equipped with IoT technologies, including RFID, beacons, heat-sensing scanners, magic mirrors, smart dummies, virtual closets, smart shelves, digital signage, self-checkouts and more. These tools are continually communicating with IoT-enabled software, which converts incoming data into actionable intelligence, thus, improve store operations, optimize the customer experience and ensure responsiveness.
To solidify Hong Kong as a desirable retail destination for tourists and the locals, and help omni-channel retailers to increase sales, it is recommended that HKSAR Government to actively promote the adoption of such applications that require products, sensors to be uniquely identified and/or data to be exchanged, so that retailers can foster a better shopping experience and consumer journey.
4.2. Smart Food that contributes to smart living and smart environment
There are increasing demands from consumers today to see improved transparency and enhanced regulation in the food supply chain. Food safety, product tracing and product recalls are also at the forefront of industry concerns and government regulations around the world. As a result, to comply with heighted requirements, instill consumer trust and facilitate trade today, many food industry stakeholders feel the need to adopt an efficient and reliable cold chain monitoring and management system as well as enforce international standards to ensure safety and interoperability of heterogeneous traceability systems, and supply chain efficiency.
Supply Chain Connectivity, Cornerstone to APEC’s Trade Facilitation
Global Data Standards (GDS) enables unique identification and traceability of goods and shipments to enable supply chain visibility.
APEC commissioned the pilot project of the adoption of GDS, the key enablers that facilitate cross-border interoperability. Five pilot projects were carried out in 2015 and 2016 that utilized GDS on export and import routes of different food items, such as red wine from Australia to Hong Kong, boxed beef from Australia to US, fresh and frozen durian from Malaysia to China and Hong Kong, fresh asparagus from Peru to the United States, Tequila Mexico to the United States.
The pilot projects involved utilizing global standards as basis for product identification on food at the carton level, pallet level and container level, enabling information connectivity for cross-border shipment. The transport event messages were supplemented to the existing transactional data which enabled real time visibility to all stakeholders, using RFID, sensors, EPCIS integrated supply chain platform, and a cloud-based application that can track and trace the flow of goods and product information from point of manufacture to point of sale, to make ordering and provide visibility to stakeholders. The pilots have all demonstrated benefits of enhancing supply chain visibility, efficiency and risk management.
The GDS projects were commended by the APEC Ministers, “We recognised that the ongoing work programme to minimise differences in standards and conformance….and encourage officials to explore next steps for the wider use of interoperable GDS in the APEC region.”
Globalised Tracking to Ensure Food Quality at its Best
DCH Logistics is one of the suppliers of a leading e-tailer company in China, and together they (DCH and the e-tailer) teamed up to introduce a traceable food supply chain from farm to fork with the goals to enhance cold chain visibility along the entire food supply chain. DCH adopted GS1 Global Traceability Standards, GS1 ezTRACK™, an EPCIS standard-based globalised track and trace platform and RFID-based cold chain solution to implement a full traceability logistics services when managing frozen products from Argentina to Shanghai and to Shenzhen door-to-door services. Together with the adoption of the QR Code at the item level, consumers are able to retrieve the whole shipment’s quality traceability information through mobile scanning on the arrived frozen food, providing information visibility and gaining consumer trust.
It is recommended that the HKSAR Government to actively encourage data-driven approach through food traceability platform and practices, enabling efficient recall, transparent batch information for retailers and consumers, while nurturing enterprises to comply with the traceability standards and citizens to check product information and traceability data. In this way retailers, food industry and consumers will all win, because it will drive visibility, operation efficiency, product integrity, and as a result, not only increase business efficiency and save costs, but also enhance consumer trust and company branding.
4.3. Smart healthcare that contributes to smart living and smart people
Statistics show the proportion of the Hong Kong population aged 65 or older is predicted to increase from 15 per cent in 2014 to 28 per cent by 2034. As a smart city grows, so do the challenges posed on the already-overburden healthcare system. All healthcare stakeholders are being challenged to eliminate errors in patient care while executing highly effective and efficient processes to control increasing costs.
Identification and traceability standards could be the key. According to McKinsey, using global product identification to match patients with drugs, for example, could help hospitals reduce the number and severity of adverse drug events at more than 25 million dollars with over 100,000 deaths annually. Product recalls, occurring about 15 times per week in medical devices and 20 times per week in pharmaceuticals in the U.S. alone (2012 data), could be managed more efficiently and more comprehensively.
A global identification and traceability standard is needed to help healthcare professionals to do more, better and with less. The traceability system, from product manufacture to patient treatment, is imperative to enable healthcare providers to identify all “objects” - drugs, medical devices, patients, caregivers, assets and locations - for transparent processes across the healthcare value chain.
Besides, the benefits of using a global standard like GS1 standards throughout hospital and healthcare environments are numerous: The automation processes reduces human error and ensures the right drug or medical devices are available for the right patient at the right time. There are significant reductions in stock with automated stock management, faster order fulfillment with more efficient warehouse operations and full transparency with automated prescription process.
Take UDI (Unique Device Identification) for example, the US FDA see it as “a unique device identification system to adequately identify medical devices through their distribution and use”. UDI provides essential product identification information i.e. Identification number, lot/batch/serial number, expiry date, in a universally recognized way, i.e. a barcode. The barcode is a gateway to additional information about the product that is stored in a publically accessible database.
UK Scan4Safety enables product-to-patient tracking - Safeguarding patients through improved traceability enabled by global stanards
Scan4Safety is a pioneering programme led by the Department of Health to improve patient safety, increase clinical productivity and drive operational efficiency of the National Health Service (NHS) through the use of GS1 global standards. GS1 standards provide the foundation for integrated patient care in the NHS by enabling the globally unique identification of every person (patient identification), every product (catalogue management), and every place (location identification).
One of the cases was rolled out in Salisbury NHS Foundation Trust, one of six Trusts in England, which introduced point-of-use scanning in orthopaedic theatres and cardiology, enabling 93% of the Trust’s implantable devices to be accurately tracked to a patient. The results to date have exceeded expectations and the Trust is now looking to roll this out across all areas of the hospital so 100% of all implantable devices can be tracked by early 2018.
U.S. Pharmaceutical industry getting ready for drug packaging standard
In the U.S., it is mandated that Standardized Numberical Identification to be applied to a prescription drug at the point of manufacturing and repackaging at the package- or pallet-level, sufficient to facilitate the identification, validation, authentication, and tracking and tracing of the prescription drug, which should be harmonized with international consensus standards. The purpose is to fight against counterfeit, diverted, subpotent, substandard, adulterated, misbranded, or expired drugs. GS1 Standards are integral to U.S. pharmaceutical industry efforts to prepare for and implement this regulation. With GS1 Standards, supply chain participants achieve the interoperability required by law.
Australian Pharmaceutical industry getting ready for drug packaging standard
GS1 standards adoption in pharmaceutical industry for unique drug identification is also common. The Australian National E-Health Transition Authority (NEHTA) Communiqué on GTIN Use Best Practice in Australian Healthcare recommended that “Australian Healthcare suppliers adopt GTIN Best Practice and avoid GTIN re-use for Regulated Healthcare Trade Items.” In 2013, the prevalence of GS1 GTINs in barcodes in the pharmaceutical sector was substantial where 95% packages dispensed at retail pharmacy carry a GS1 barcode. One example is Orion Laboratories, a manufacturer of chemical, cosmetic, and pharmaceutical, selected the GS1-128 barcode to apply on different levels of packaging, including unit, carton and inner level, which can encode information additional to the GTIN such as Batch Number and Expiration Date – attributes necessary for traceability in the pharmaceutical sector. The companies saw significant benefits associated with the ability to improve efficiencies in the supply chain through bar code scanning, so they decided to broaden the scope of use of GS1 Barcodes.
GS1 standard has been widely applied on drugs and devices identification in many countries. It is unique, secure, supporting laws and regulations like DSCSA in USA & NEHTA in Australia, and proven demonstrating value on traceability, thus, enabling efficient recall, simplifying drugs registration process, facilitating warehouse and distribution efficiency, hospital or clinical operation efficiency, and thus, patient safety.
Hong Kong Hospital Authority (HA) had modernized its pharmaceutical procurement management process by implementing GS1 Hong Kong’s ezTRADE – a standard-based B2B EDI platform, facilitates transmitting online pharmaceutical orders, invoices, shipment notices among HA and suppliers. The unique identification facilitates automatic checking what is received against what was ordered. However, the automatic capturing of product traceability information along the supply chain stops at warehouse only, while the pharmaceutical dispensing to patients route is still under manual update process.
In Hong Kong, there is a lack of substantial level of drugs identification being barcoded with traceability data, like batch/serial no., expiration date etc. We recommend a full unique identification adoption at primary package on all drugs to support automatic traceability data capturing at its pedigree, from ordering, receiving, storing, to dispensing to individual patient receiving a particular presecription accurately and be reflected in the eHR record, achieving patient safety with right medication, via the right route, at the right time, in the right dose to the right patient. In times of issue, it is easily traced and facilitates product recall.
4.4 Digital Framework - Adoption of IoT technologies based on global standards
IoT, as one of the fundamental technologies for a smart city, can be present in great diversity in terms of IoT connectivity options available and the variety of devices they must support.
To foster the integration and cooperation of different devices in the context of smart cities, international standardization bodies play an important role. Global standard can provide a common foundation for product identification and sharing visibility information in order to fully utilize IoT full potentials.
Graphic: IoT Key Enabling Technology Elements by GS1 Hong Kong
At GS1 Hong Kong, we believe a number of critical technology elements exist in different layers of IoT, including business analytics, visibility, virtualization, sensor, mobility and data security, which can be fit into the digital framework as the study Report suggested.
These technology elements are the building blocks of global standards, and hence interoperability between different IoT systems. GS1’s global standards, which shares "what, when, where, why" data between systems, provides interoperability and the fundamental raw data of a Smart City. This standard has been widely adopted in worldwide in tracking and tracing a moving object, is a proven and safe standard for Government to consider in the planning of systems in Smart City.
Smart city is about creating an environment for better quality of life for people thus enhancing the city’s competitiveness through embracing innovation and technology. It covers every aspect of lives, from daily consumption of products (retail), food, and healthcare attributing to the themes of smart living and smart economy.
To connect the dots of all these aspects of lives, we believe interoperability is the key. Unique identification of people, objects, assets, locations, etc. (things) and automatic data capture and sharing enable interoperability. With proven identification standard that scanned more than 5 billion products every day worldwide, and facilitating sharing of captured data that enhances supply chain efficiency and commerce connectivity, GS1 HK recommends the Government to take a more progressive step in adopting neutral and user-driven global standards to connect different aspects of lives, to enable smart citizens and to create a smarter Hong Kong, and connect Hong Kong to other smart cities.
 Hong Kong Census and Statistics Department -https://www.censtatd.gov.hk/hkstat/sub/sp250.jsp?tableID=036&ID=0&productType=8
 Hong Kong Population Projections 2015 – 2064, by Census and Statistics Department http://www.statistics.gov.hk/pub/B1120015062015XXXXB0100.pdf
 Strength in Unity: The promise of global standards in healthcare https://www.gs1.org/docs/healthcare/McKinsey_Healthcare_Report_Strength_in_Unity.pdf
 SMART CITIES, BIG DATA, AND THE INTERNET OF THINGS, Sensible City Lab, MIT - https://www.standardsuniversity.org/e-magazine/november-2016-volume-6-issue-4-smart-city-standards/smart-cities-big-data-internet-things/