Defense Department Meets With Suppliers To Outline RFID PlansDefense Department Meets With Suppliers To Outline RFID Plans

The Defense Department held a meeting last week with its major suppliers about its plans for using radio-frequency identification tags.

"The message is that this is going to happen. This is not a fad for them," says Michael Guillory, industry relations director for Intermec Technologies Corp., a maker of RFID and supply-chain systems. "When they were talking about the schedule, they indicated that they know this is a massive implementation and that it will take time." Guillory attended the meeting the department had with suppliers last week to plan for the RFID initiative.

The Defense Department wants to leverage RFID for improved inventory management with less manpower. In an October memo that first directed the department and its suppliers to use RFID, Michael Wynne, acting undersecretary of defense for acquisition, technology, and logistics, said RFID will help the military "reapportion critical manpower resources to war-fighting functions and streamline our business processes."

The department last week also released more details on the technology specifications it wants included in RFID gear. The department wants RFID tags that can hold more data and support multiple reads and writes, so they can be reused to identify and track products other than the ones for which they were originally used. "Out in the desert in Afghanistan, you don't have connections to the Internet," Guillory says. "If they've got a case of goods, and they need access to mission-critical data about it, they can't afford to find that out via a network. They need that data on the tag, and that's more than just a unique ID."

The Defense Department and Wal-Mart are leading the way in pushing for aggressive deployment of RFID in the hopes that the technology will cut supply-chain costs and improve efficiencies. But some analysts say RFID technology won't revolutionize the supply chain as quickly as some people believe. Spending on RFID-related products will remain "modest" in 2004 because the technology is still maturing and expensive to implement, according to IDC. The market researcher predicts that more than half of Wal-Mart's top 100 suppliers will have only simple, early-stage pilot projects by January 2005. To compensate, IDC predicts, Wal-Mart and the Defense Department may push back the scopes or time frames of their RFID plans again.

This story was updated on Dec. 17.