DOD Sticks to January 2005 Deadline: From Jerry W---------------------------------------------------------------------Jan 2005 radio ID supply tag deadline remains
NEW YORK, Dec 3 (Reuters) - The U.S. Department of Defense plans to stick to a January 2005 start date for suppliers to attach to their shipments tiny electronic tracking tags, an official said on Wednesday.
"We have to change the way we handle our logistics to support our war fighters," Alan Estevez, assistant deputy undersecretary of defense in charge of supply chain integration, said in a phone call with reporters on Wednesday.
The Department said this year it wanted suppliers to start using the tags to help it better track items and be more nimble as it receives supplies or ships them to troops in the field.
The tags work in similar fashion to the UPC code that keeps tabs on goods but they can gather more information about a product's movement, making it easier to monitor its location.
A tiny microchip embedded in them stores data which can be read by a nearby radio frequency reader that transmits the information to a computer for monitoring or analysis.
"We will want to implement it as broadly as possible but we'll be looking at not only the state of what our suppliers can support, but the state of what the RFID industry can support," he said.
How many items sent to the Department of Defense are tagged starting Jan. 1, 2005 depends on the development of the radio ID tag, or RFID, market and defense department pilot programs as well as on its suppliers and tag supply, Estevez said.
"You've got to start somewhere. We're early on in this in what we can really expect to do in the January 2005 timeframe. Even Wal-Mart doesn't expect it on every piece of supply coming to them," Estevez said.
Wal-Mart Stores Inc. (WMT) , the world's largest retailer, has imposed the same deadline for its top suppliers. At a meeting last month for its suppliers, Wal-Mart backed that deadline, which analysts have said will be difficult to meet because of cost, manufacturing and RFID tag supply issues.
Only a few companies now make the tags, costing as much as 20 cents apiece which suppliers say is too expensive. Analysts and companies expect the price to fall as demand increases.
The Department of Defense met in Virginia on Tuesday with hundreds of suppliers to discuss plans to phase in RFID technology. The department is running two pilots, one supporting field forces and the other supporting the department, and has two others planned, Estevez said.
If the department's top 100 suppliers adopted RFID tags, that would cover 80 percent of supplies by dollar value, he said. If the top 500 used the tags, that would cover more than 90 percent. The department has 43,000 suppliers, Estevez said.