The US Defence Department wants a writeable, passive RFID tag with a data store larger than the 96 bits used in existing commercial tags, and believes it can work out any standards issues it has "in a matter of months," according to Alan Estevez, assistant deputy under secretary of defense, supply chain integration.
In a media briefing Wednesday, Estevez said the Pentagon is working with EPCglobal to develop RFID, or radio frequency identification, tag standards that can be incorporated into the International Standards Organisation standards it wants to use. His comments came the day after the Pentagon held its RFID Industry Summit with suppliers.
EPCglobal is a joint venture between Uniform Code Council in Lawrenceville, New Jersey, and EAN International in Brussels.
The Pentagon wants RFID tags capable of "multiple reads and writes" and with a larger data store to accommodate its unique identification number on "high value" parts or good priced over $US5,000, Estevez said. He added that the Class 1, Version 2 EPC tag that Wal-Mart Stores wants to use in its supply chain should "accommodate" most of the DOD's requirements.
Though the standards process is complex, Estevez said he is "fairly confident" that the department, EPC and ISO can develop a common standard quickly. Though he did not specify tag costs — Wal-Mart has said it would like to see tags costing a nickel each — Estevez said volume use by DOD, Wal-Mart and their respective supply chains should drive down costs.
Mike Liard, an analyst at Venture Development in Natick, Massachusetts, said he believed the EPCglobal Class 1, Version 2 tag will eventually be incorporated into ISO standards. That would alleviate the costly problem that suppliers to both the DOD and Wal-Mart have said they would face if the two organisations use different standards (see story).
Liard said that both Wal-Mart and the Pentagon would reap economic gains from using the Class 1, Version 2 tag. That's because Texas Instruments and Royal Philips Electronics NV are gearing up to produce the Version 2 tag in large numbers. That, in turn, promises greater economies of scale than the Class 1 tags the agency intends to use in its pilot programs. Those tags are produced by Alien Technology in Morgan Hills, California.
Estevez declined to say how much the infrastructure to support RFID in the Pentagon's supply chain — including readers in warehouses and supply depots — will cost. But he did say "reader costs are plummeting."
Mike Wills, vice president at Friday Intermec Technologies , in Everett, Washington, said the agency's infrastructure requirements would be "fertile ground" for RFID hardware vendors such as his company. Wills declined to estimate the DOD's cost for adding RFID tags, saying only, "it will have a lot of zeros in it."
Wills noted that the Pentagon will need more handheld RFID readers than Wal-Mart since military supply depots are often outdoors instead of in warehouses where fixed portal or door readers can capture data from the tags.
While the defense agency mandated earlier this fall that all 43,000 of its suppliers use RFID tags at the case and pallet level by January 2005, Estevez acknowledged it would be "unrealistic" to assume that all cases and pallets received on or after that date would have the tags.
In his presentation to the RFID Industry Summit, Estevez said the Pentagon wants to have its top 100 suppliers "live" with RFID tags by January 2005, and the top 500 suppliers using them by July 2005. In dollar volume, Estevez said the top 100 suppliers account for 80 % of what the agency buys while the top 500 account for 90 %. Estevez said all suppliers should be using RFID tags by January 2006.
While attendees at this week's event described it as more collaborative and less dictatorial than a similar one Wall-Mart held for its suppliers last month, Estevez emphasised that he has "drawn a line in the sand" and that RFID tags will soon be an ironclad requirement.
"It's going to be in every contract ... we're writing it into the DFAR (Defence Acquisition Regulations)," he said.