She said that no one could doubt the overall effectiveness of the technology or question the guiding principles. The objective is to have a global system, governed by internationally agreed standards, to give companies real-time data and instant traceability of goods moving in their supply chain. This will also help with electronic ordering, replenishment, merchandising and procurement, inventory management at stock-keeping unit and even individual item level.

One key is the use of RFID tags. These hold electronically encoded data about the specific product or item to which they are affixed. The information is readable by scanner, decoded by a processor and stored in the corresponding database, where it is updated as necessary after each significant event or change of status along the supply chain.

The other essential is the EPC system. It establishes a unique classification of objects on a serialised basis and can be thought of as a logical extension of the international barcode system. However, it also identifies products more precisely, so it is possible, for example, to trace an individual can of soft drink and, with the encoded data, even track each previous movement and how long it has been in one place.

When initially registering, a company will assign a basic EPC code for each item that it handles. A record of this standard will be held in the company's own server and act as part of the 'global address' mechanism.

Ms Lin explained that what linked everything was a series of international protocols. These are similar to the various agreements governing the administration and operation of the internet. They define standards for the exchange of digital information, and provide 'pointers' to the appropriate database during any data search or update.

'The beauty is that it is all built to standard, so there is interoperability,' she said. 'From our perspective, it has always been important to look at the entire supply chain connecting raw materials suppliers, manufacturers, logistics companies, information technology providers and retailers.

'Traceability is going to be the killer application for RFID in future, so you know exactly where the goods are - at the point of manufacture, in the warehouse or in transit on the ocean.'

She acknowledged that the usual concerns surrounding any new technology - costs, reliability and actual effectiveness - had existed.

But all the signs now suggest that, within the next year or so, the rate of implementation will snowball.

Major retail groups, such as Carrefour and Metro, have been undertaking pilot projects with select suppliers. And, in negotiations or tender documents, they are asking the big logistics providers to state if they are RFID capable.

'I would not say it is all happening today, but people know that if the global retailers are doing this, they have to be ready,' Ms Lin said.

That means setting up hardware and software at the appropriate reading points, such as factories, loading docks and retailers' distribution centres. With advances in technology and standardisation, the costs for readers - whether fixed or handheld - software and RFID tags has fallen steadily.

'A primary objective is still to drive down the cost of the tags,' Ms Lin said, adding that this had gone from around 50 US cents per tag five years ago to about 15 US cents now. 'But we want to bring it down to 5 US cents or below and to provide a level playing field.'

She noted, too, that there was still a lot of industry wide co-ordination work to do, with a focus on raising awareness and providing training and education. In that respect, the Supply Chain Innovation Centre at the Science Park in Tai Po serves an important function.

Due to be relaunched next month, it will offer demonstrations of the technology as it relates in particular to manufacturing, retail and logistics companies, and will allow visitors to understand exactly how the network helps with the exchange of data.

'For some people seeing is believing, so they need to see how information moves through the system,' Ms Lin said. 'Overall, Hong Kong has been pretty quick from an RFID perspective and in driving things along.

'The majority of [local] companies implementing this are doing so because their customers want them to, but they should also remember to look at other ways it can help to improve their own processes and monitoring work in progress.'