The US DoD finalized its RFID policy last July. It will be implemented over the next two years, involving 43,000 suppliers, which will help drive the RFID technology into the mainstream market.

RFID became mandatory for US DoD orders for certain classes of supply delivered on or after January 1, 2005. Contracts with US DoD now require passive RFID tags be applied to ship containers, pallets and cases in unit loads and exterior containers.

This requirement applies to: packaged operational rations and packaged food; clothing, individual equipment, tools and administrative supplies; and repair parts and components delivered to the Susquehanna depot in Pennsylvania.

After January 1, 2007, the requirement will be for all classes of supply to strategic depots as well as all service and maintenance facilities. Suppliers of all classes of supply have to tag individual items in addition to the containers, pallets and cases required from the beginning of this year.

After successfully deploying RFID technology early this year to improve its supply chain and realising cost savings, US DoD is now examining other ways to further refine the supply chain process such as tracking the useful life of specific parts and tracking weapons and even soldiers in the field.

Nicholas Tsougas of the US DoD automatic information technology office said at the EPCglobal US conference in Baltimore, in October last year, that RFID was critical to US DoD's logistic transformation.

"RFID represents an untapped capability to improve DoD's business processes," he said. "DoD's objective is to use RFID technology as an integral part of a comprehensive suite of AIT to facilitate accurate, hands-free data capture in support of business processes in an integrated DoD supply chain enterprise."

RFID Tag or Spy Chip?

Nevertheless, RFID is not without its drawbacks. As RFID is increasingly forced on the public through e-passports, library cards and building security cards, lack of awareness could lead to a public backlash against the technology like that which occurred against genetic modification (GM) science. That cause was irretrievably set back - despite its potential to lessen use of herbicide and alleviate hunger - after Monsanto introduced Roundup-resistant GM soybeans into the food chain without warning, triggering harsh worldwide legislation against what has been popularly termed as "frankenfood".

The danger signs for RFID are already there - in emotive terms for the technology such as "spy chips" for RFID tags and unfounded fears of "skimming", the secret tracking and reading of items with RFID tags.

In Germany, protests earlier this year by consumer group FoeBuD against the deployment of RFID by Metro, the country's biggest grocery wholesaler, were strong enough for the company to cancel its RFID testing.

In the e-passport project, the privacy of the passport holders was an issue that forced changes to the proposed Australian legislation before it was passed.

However, at present, the biggest headache in the deployment of the technology is interoperability with other systems and system architecture that must handle substantially increased amounts of data.

Weaver said the Australian Defence Organisation was keeping a close eye on the development of international standards controlling the technology. "Interoperability with the US and Britain is a high priority for the Australian Defence Force," he said.

Another problem is that several factors prevent the system from being 100 percent accurate. Wal-Mart achieved only 80 percent accuracy in its deployment of RFID technology, which meant suppliers received payment for only 80 percent of the goods shipped to the retailer. Low quality tags, metal interfering with the radio frequency signal, positioning of the tags on cases and inability to read individual cases when palletized were blamed for the problem.

US DoD overcame these problems by requiring from suppliers Advanced Shipment Notices (ASN) containing shipment and order data, against which the shipments were checked when arriving at the depot. Tagged cases and pallets are shipped to DoD, associating cases with pallets and the shipment data is captured in the DoD environment.

So, if the perception of RFID is handled in a positive way, it appears the technology is set to provide great improvements in logistics and massive cost savings - at the very least.
(source:CIO)