Dec 04, 2003At a meeting with representatives from some 200 suppliers at a Fairfax, Va., hotel, senior officials of the United States military stressed that they wanted to engage suppliers in a constructive dialog over the Department of Defense's plan to use RFID to track supplies beginning in January 2005.
Wal-Mart stated categorically in guidelines given to suppliers that it "will not be accepting any cost-sharing plans for RFID or expecting a cost-of-goods increase." But Michael Wynne, the acting undersecretary of defense for acquisition, technology and logistics, said: "For those of you who are concerned—yes, we'll pay."
In a conference call yesterday with journalists, Alan Estevez, the assistant deputy undersecretary of defense for supply chain integration, said that the cost of the RFID tags would be built into the cost of the product, just as packaging and labeling costs are today. If suppliers added the price into the cost of their goods, the military would wind up paying for the RFID tagging. But, he noted, some suppliers would find internal cost savings that might offset the cost of the tags. Those suppliers might gain a competitive advantage by not building the cost in.
During the meeting with suppliers, Wynne made it clear that the military was committed to deploying RFID technology as part of the overall transformation of the military that is underway. "If you want to transform defense and you don't transform logistics, you're [foolish]," he said.
Wynne, Estevez and Ed Coyle, chief of the DOD Logistics Automatic Identification Technology Office, all made it clear that this was the opening of a dialog with suppliers. The three said they wanted feedback from suppliers and RFID vendors. Wynne, Estevez and Coyle told suppliers frankly that there are many questions that they can't answer because they are not far enough along in their implementation of RFID.
The DOD plans to hold a second meeting with its suppliers in the first quarter of next year. The Defense Logistics Agency, which supplies food, clothing and munitions for all of the armed services, is organizing two pilots, one tracking rations known as MREs (meals ready to eat) and the other tracking suits that protect soldiers from chemical and biological hazards. The DOD is also looking for partners who want to participate in other pilots that involve collaboration with outside partners. The aim is to learn what processes need to change, what technology can be applied in different applications, and what the DOD's technical requirements are.
Estevez said that the military plans to use existing EPC tags for the pilots. Like Wal-Mart, it plans to eventually deploy Class 1, V2, or Class 2 (read-write) EPC tags. Estevez said that the DOD was working with the International Organization for Standardization and EPCglobal to ensure that RFID standards meet its needs. The DOD won't formally endorse EPC until it is satisfied that EPC technology will satisfy the military ‘s requirements.
RFID Journal will publish a more detailed report on the event on Monday, Dec. 8.
