DoD is one step closer to RFID policy

Bob Trebilcock -- Modern Materials Handling, 5/19/2004

Last fall, the Department of Defense announced plans to require RFID tags on pallets, cartons, and some packaging materials that currently require a unique identification (UID) – the DoD's equivalent of a VIN number on a vehicle. The new requirements will be included in contracts issued in late 2004 for deliveries beginning January 1, 2005.

Then last month, the Department of Defense confirmed its commitment to be "an early adopter of passive RFID" at a suppliers' summit in Washington. More than 700 suppliers attended the meetings, according to Ed Coyle, chief of the DoD's logistics automatic identification technology office .

DoD's interest in RFID is the result of changing military requirements. DoD serves a rapidly moving force on a dynamic battlefield with a need for better asset visibility and detailed information on in-transit assets and more effective inventory management.

"The timing is right to capitalize on emerging supply chain technologies," Coyle said following the suppliers' summit. "DoD wants to influence the direction and cost of the technology, and make the standards work for us."

While comparisons have been made to Wal-Mart, Coyle points out that there are significant differences between the two organizations.

For one, Wal-Mart has about 10,000 suppliers in total. The Department of Defense, on the other hand, deals with more than 46,000 suppliers and 4.4 million stock keeping units.

"The DoD is just like Wal-Mart, if Wal-Mart's 3,000 stores were constantly on the move; its associates all wore different vests; and a stock out meant that everyone inside the store could die," Coyle said.

By the end of this month, Coyle expects to have a draft of contractual clauses for suppliers to review. A final policy – known as a DFARS, which stands for Defense Federal Acquisition Regulations Supplements – will be published in July. The DFARS Rule requiring passive RFID tags will apply to solicitations issued after October 1, 2004 for delivery after January 1, 2005. Suppliers with contracts issued before October may not be required to comply with the new DFARS.

While some defense suppliers are concerned about the compatibility of the DoD's requirements with those of their other suppliers, Coyle says the department is working with standardizing bodies to address those issues. "We will use EPC-compliant technology," Coyle assured suppliers. How many suppliers will be affected by the new rules is still to be determined.