All suppliers to the US Department of Defence will have
to put radio frequency identification tags on their shipping
pallets and cases by January 2005.
The endorsements of RFID technology by the Pentagon is expected
to force product manufacturers and distributors to make big
investments in their IT infrastructures over the next 15
months.
The policy will cover virtually everything bought by the US
military.
The so-called passive RFID tags will be used to track the
movements of about 45 million line items, said Alan Estevez,
assistant deputy undersecretary of Defence for supply chain
integration.
Last year, the Defence Logistics Agency, bought an estimated
$24bn (£14bn) worth of goods, from 23,642 suppliers, according to a
Pentagon.
Like retailer Wal-Mart, which has told its top 100 suppliers to
adopt RFID, the Pentagon will use electronic product code (EPC)
standards being developed by EPCglobal, a joint venture between
Uniform Code Council and EAN International.
EPCglobal, which previously was called AutoID, released the
technical specifications for an RFID-based EPC network and
supporting technology last month.
The Defence Department's timetable for starting to use RFID
technology is ambitious, Estevez said. Nonetheless, military
officials believe that suppliers will be able to meet the rapid
rollout schedule.
But Kara Romanow, an analyst at AMR Research who cited both
software and hardware impediments, said the early 2005 deadlines
imposed by the Pentagon and Wal-Mart are highly impractical.
RFID tags already have a 20% failure rate and cannot stand up to
the kind of environmental extremes faced by military units, she
said.
The cost of the devices is another hurdle. Passive RFID tags
typically sell for up to 50 cents each. Wal-Mart wants to see that
lowered to five cents per tag. Estevez said the Defence Department
is looking for "the lowest possible price", but he did not disclose
any cost targets.
Active RFID tags offer more capabilities than their passive
counterparts but cost much more. RFID proponents claim that both
kinds of tags can store more detailed information about products
and materials than conventional bar codes.
Bob Brewin writes for Computerworld