DOD, Corporate RFID Backers Seek Standard

Pentagon official says two sides are close to deal on common specifications

A key Pentagon supply chain official last week said the U.S. Department of Defense is working with EPCglobal Inc. to develop radio frequency identification (RFID) standards that could satisfy the needs of both corporate and military users.

Alan Estevez, assistant deputy undersecretary of Defense for supply chain integration, said during a press briefing that the standards process is complex. But Estevez added that he thinks the DOD and Boston-based EPCglobal can agree on common standards "in a matter of months."

The possibility that suppliers would have to support two sets of RFID standards arose in October, after the DOD mandated the use of RFID tags on shipping pallets and crates starting in early 2005 -- a deadline similar to one that Wal-Mart Stores Inc. has set for its top suppliers.

EPC vs. ISO

Wal-Mart and other corporate users plan to adopt the electronic product code (EPC) standards being developed by EPCglobal. But the Pentagon said the tags its suppliers use will have to conform to specifications from the International Standards Organization .

The DOD and EPCglobal are now cooperating to devise a set of standards that could be incorporated into the ISO's work, according to Estevez.

He added that the passive RFID devices Wal-Mart wants to use in its supply chain should accommodate most of the DOD's requirements, although military officials are seeking a data storage capacity that's larger than the 96-bit limit supported by existing commercial tags.

The expanded capacity is needed to support the unique identification numbers that the DOD assigns to "high-value" goods that cost more than $5,000, Estevez said. The tags used by the military will also have to be capable of handling multiple reads and writes of data, he added.

Mike Liard, an analyst at Natick, Mass.-based Venture Development Corp., said blending EPCglobal's standards into the ISO's specifications would alleviate the added costs that suppliers say they will face if the DOD and Wal-Mart support different approaches.

In addition, both Wal-Mart and the Pentagon could reap economic gains from using the so-called Class 1, Version 2 tag envisioned by EPCglobal, Liard said. That's because Texas Instruments Inc. and Royal Philips Electronics NV are both gearing up to produce the new devices in large quantities, which is expected to result in lower costs compared with existing RFID tags.

Estevez declined to say how much it will likely cost the DOD to install the IT infrastructure needed to support RFID in its supply chain, including the addition of RFID readers in warehouses and supply depots.

He acknowledged that it's unrealistic to expect all of the military's 43,000 suppliers to begin using RFID tags by January 2005. Estevez's statement came one day after the DOD disclosed more details about its RFID plans to key suppliers at a meeting in Fairfax, Va.

In a presentation at the RFID meeting, Estevez said the Pentagon wants to get its top 100 suppliers on board with RFID tags by the start of 2005 and add another 400 companies by the middle of that year. All suppliers should begin using the devices by January 2006, he added.

Some attendees at the RFID meeting described it as more collaborative than a similar event Wal-Mart held for its suppliers last month. But Estevez said the DOD has "drawn a line in the sand" on the use of RFID tags.

"It's going to be in every contract," he said.

Copyright © 2003 IDG Communications, Inc.

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