Last month, a large and powerful supply chain player held a summit with its top suppliers and major technology providers in which it outlined its expectations for becoming RFID-ready. The player? No, it wasn't Wal-Mart, although the megaretailer did hold such a meeting in November. This time it was an agency that dwarfs Wal-Mart in size, the U.S. Department of Defense (DOD).
Like Wal-Mart, the DOD has issued an edict that its suppliers begin attaching radio-frequency identification (RFID) tags to incoming shipments by January 2005. The tags will allow the agency to track everything from Hummers to ocean containers wherever they are in the supply chain. Although it reiterated its intent to move forward aggressively with RFID—it hopes to have final plans in place by July—it did not issue comprehensive compliance information at the meeting. "If people were coming to get their marching orders, that's not what they got, nor should that have been the expectation," says Michael Guillory, director of industry relations for technology vendor Intermec, who attended the meeting.
What they got instead was the assurance that the Defense Department is not wavering from its commitment to the technology. "We did receive strong and clear indications that the DOD is 100 percent committed to the use of RFID," says Guillory. Better yet, attendees came away with assurances that the DOD intends to adopt the Electronic Product Code (EPC) standard that's also being adopted by Wal- Mart. (The EPC is a unique number stored on an RFID tag that identifies a specific item in the supply chain.)
"I think the primary thing we took away from the meeting was that the department stayed closely in line with what Wal-Mart announced [in November]," says Brandon Drew, a product manager for technology vendor Manhattan Associates, who also attended the DOD meeting. "That's important for us.When you look at the DOD, it has twice as many suppliers as Wal- Mart does. For them to be driving the EPC standard into their supplier base helps with the adoption of RFID."
Remote controls The bad news is that although the military is moving in step with the commercial sector, some of its requirements will almost certainly extend well beyond what any retail user would ever need, creating additional challenges for both suppliers and RFID technology developers.More will be known when the department issues a revised draft of its policy this month, but it's already clear that the military will have unique demands. "The military is like thousands of Wal-Marts moving all the time and they never know when Christmas is going to happen," says Guillory.
For example, while early development of the EPC for commercial use has concentrated on a chip with 96 bits of memory, the military is likely to want significantly more—256 bits at a minimum. Guillory explains that is particularly important in remote locations without access to networks. Any mission-critical data associated with a shipment would have to be on the tag. "That could have some implications on when the EPC standard is first available," says Drew.
The DOD's also likely to demand technology that's compatible with several radio frequencies so that its system complies with regulations around the world. "The reality is that the DOD is global," says Guillory. "While its supply source is within the United States, it distributes and operates in an expeditionary manner. As such, it needs its supply chain extended in a global fashion."
Even so, both Guillory and Drew believe that Wal-Mart and DOD are aligned closely enough. "We're very encouraged that it's staying well in line with what Wal-Mart announced," says Drew. "We have two major shipping entities endorsing the same standard and working toward a common goal. What it tells us is that companies working toward defined standards are on the right track."
Gartner, Inc.
