As the deadline nears for contractors
to install smart tags on shipments of critical military supplies,
an industry survey reveals that many companies have yet to come
to grips with the new regulations.
The smart-tag technology, known as passive radio frequency identification
(RFID), will become mandatory this month for all Defense Department
suppliers shipping repair parts, clothing and other military gear
to Defense Logistics Agency depots in Pennsylvania and California.
RFID tags electronically store information about the contents of
a shipment, making it easier to sort and track the equipment during
transportation. Unlike “active” RFID tags, the passive
tags require a scanner or reader device in order to retrieve the
data.
According to a recent survey, however, “a majority of companies
have no formal plans in place to support the Jan. 1, 2005, U.S.
government requirement to initiate use of radio frequency identification.”
The annual Aerospace and Defense Industry Survey was conducted
by Computer Sciences Corporation, the Aerospace Industry Association
and Aviation Week magazine. More than 160 companies responded to
the survey.
“A surprisingly large percentage of the companies surveyed
indicated that they had no finalized plans to implement RFID,”
said Pete Wiese, head of the aerospace and defense consulting practice
at CSC. “However, it was encouraging to see that nearly 75
percent of the companies are aware of the requirement and have initiated
dialogue.”
Most of the respondents are aware of the RFID requirement, but
almost three quarters of them are unsure as to how they are going
to pay for or use these technologies, Wiese said.
Companies have received a 30-day extension until February 2005,
but the additional month is “largely symbolic” and will
not help address the compliance problems, said Ken Mason, an RFID
expert at CSC.
However, a Defense Department spokesperson said there was no such
extension and that the January deadline was firm.
Regardless of whether the Pentagon decides to authorize any waivers
to the policy, the fundamental problem remains that many contractors
have yet to grasp the technical requirements, Wiese said.
“We are still struggling to understand how RFID adds value,”
he said. “The survey unveiled that 75 percent of survey respondents
are aware of the requirements. They just don’t know how their
actions provide additional value … We expect waivers to be
‘limited.’ The message from the Defense Department is
that ‘this is policy.’”
The RFID mandate caught many people off guard because it’s
a relatively unproven technology, Mason said. The Defense Department
often has been conservative about adopting technologies that have
not matured in the commercial sector. “We were all very surprised
that they would take such bold step,” he said. “They understood
that, even though it wasn’t completely proven.”
A catalyst of the Pentagon’s policy was the decision by Wal-Mart
to mandate passive RFID tags for its suppliers. According to Wiese,
the undersecretary of defense for acquisition, logistics and technology,
Michael Wynne, told contractors that the Defense Department could
not pass up on the opportunity to capitalize on the push Wal-Mart
was making to get the technology in place. The giant retailer has
about 10,000 suppliers, compared to 43,000 for the Defense Department.
Not all Wal-Mart suppliers will be complying on time, Wiese said.
“RFID remains an emerging technology. Organizations need to
be educated.”
On the military side, it could be a long time before passive RFID
technology is ready for prime time. Recent tests conducted for U.S.
Central Command by the Military Surface Deployment and Distribution
agency showed a “10 percent success rate,” said an industry
source.