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Defense Sector May Miss Deadline
A survey shows that the U.S. aerospace and defense suppliers need to catch up to meet U.S. government RFID mandates or miss the compliance date.
Nov 29, 2004—The U.S. aerospace and defense industry will either have to sprint to meet U.S. federal government mandates to initiate use of RFID tags on their shipments or miss the Jan. 1, 2005, compliance date, according to the results of a new survey.
In August, the DOD confirmed that DOD contracts issued as of Oct. 1, 2004, would require that passive RFID tags be used for delivery of materiel on or after Jan. 1, 2005 (see DOD Releases Final RFID Policy). The passive tags must be applied to cases and pallets.
The Aerospace and Defense (A&D) Industry Survey drew responses from small, midsize and large A&D manufacturers and suppliers across the North American. The 160 survey respondents included companies involved in rotor and aircraft design and manufacturing (23.7 percent), avionics and electronics (15.3 percent), industry-related products and services (19.4 percent), missiles and space (13.9 percent), military services and defense administration (14.0 percent) and terrestrial-based tactical weapon manufacturer (4.1 percent). The results found that despite the DOD RFID mandate, 60.6 percent of the respondents had no current plans to tag products and shipments and 19.8 percent estimated that any RFID deployment was at least a year away.
The survey, which examines the adoption of information technology within the A&D sector, was conducted by Computer Sciences Corp., a global consulting and systems integration company, in association with the Aerospace Industry Association (AIA) and Aviation Week and Space Technology magazine. Although it was the third year the survey had been carried out, it was the first time that questions involving RFID had been included.
The survey found that 60.1 percent of respondents said they had no finalized plans to deploy RFID. According to CSC, the lack of finished plans for RFID was particularly surprising given that 80.1 percent of the respondents had government customers.
However, there was a similar lack of awareness regarding the Unique Identification code, or UID, mandated by the DOD. Since January 2004, a 2D Data Matrix label carrying a UID is the minimum identification requirement on items priced at over $5,000 that are serially managed, mission-essential, controlled inventory, or on other consumable items or material for which the DOD has deemed permanent identification necessary.
Although this requirement is currently in place, the survey found that 38.8 percent of the respondents indicated they were not sure if they were required to comply with UID requirements. Another 36.4 percent believed they were not required to support UID, with the remaining 24.8 percent believing that they are required to use UID.
The survey, which covered companies ranging from less than $100 million to greater than $5 billion in annual revenue, found that even among companies with revenue greater than $1 billion and a customer base that is 91.1 percent composed of government agencies, 43.2 percent of those companies had no finalized plans to deploy RFID and 26 percent indicated their plans to deploy RFID capabilities were more than 12 months away.
Of the responding companies with revenue exceeding greater $5 billion, only 5.6 percent have completed their RFID plans, are in possession of the RFID readers and tags, and know how to use them
The survey was carried out between May and July 2004, and, says CSC, it is possible that since then, more companies will have implemented some form of RFID deployment to meet the January mandate. "Since July, many companies are likely to be in a sprint to meet the mandate, and they will most likely meet the letter of the law rather than its spirit," says Pete Wiese, leader of the aerospace and defense practice within CSC's consulting group.
The survey did find by July, 74.6 percent of the companies surveyed were aware of the DOD's RFID mandate and were beginning to plan their RFID strategies. That could leave time for companies to meet mandate deadlines. "We have worked with companies that have developed slap and ship to become compliant in as little as 60 days or so," says Ken Mason, partner and head of CSC's global automatic-identification technology practice.
In addition, 74.4 percent of the survey's respondents answered that they are not sure how they will cover the cost of meeting the RFID mandates, while 14.2 percent indicated they will request contract modifications to cover the costs.
Even so, CSC believes that among those companies that have begun to examine the potential of RFID, many are already seeing the potential for the technology to be used in their own manufacturing processes. Although 76.4 percent of respondents indicated they were not sure how they plan to apply RFID. Among those the 24.6 percent that did have their plans in place, 68.4 percent indicated they would track material during the manufacturing process as well as on the shipping dock.
The survey, which assessed a range of technology issues among the North American A&D industry, is available free of charge at www.csc.com/industries/aerospacedefense.
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