DoD Knowledge Base: FAQs
The Department of Defense announced on October 23, 2003 the establishment of a Radio Frequency Identification Policy (RFID). RFID technology greatly improves the management of inventory by providing hands-off processing. The equipment quickly accounts for and identifies massive inventories, enhancing the processing of materiel transactions to allow DoD to realign resources and streamline business processes.
The basics of RFID consist of a tiny microchip (or tag) and a small, ribbon-like antenna. The RFID microchip and antenna can be put in almost any form, such as placing them between cardboard layers in a carton or layering them on a piece of tape or label. The RFID tag would store a unique identification code from which RFID scanners, ranging from handheld units to fixed readers sometimes identified as "interrogators," transmit radio signals to turn on the tag that sends back the identification number to the reader. The DOD is proposing to standardize an Electric Product Code (EPC) that would be used as the product's identification code. Once the code is read from the tag, the EPC can be linked to look up data bases that can provide detailed information about the item including the manufacturer, characteristics, lot numbers and expiration dates if applicable. The tags can also be programmed to store additional data. Unlike bar codes, the EPCs can be read simultaneously as opposed to one at a time. Also, the EPCs do not require a direct line of sight for the data to be read.
Implementation of RFID minimizes time spent through the normal means of inventory processing. This technology allows the improvement of data quality, items management, asset visibility, and maintenance of materiel. Further, RFID enables DoD to improve business functions and facilitate all aspects of the DoD supply chain. The new policy requires suppliers to put passive RFID tags on the lowest possible piece part/case/pallet packaging by January 2005. Acknowledging the impact on DoD suppliers, the department hosted an RFID Summit for Industry in February 2004. RFID policy and the corresponding RFID tagging/labeling of DoD materiel are applicable to all items except bulk commodities such as sand, gravel or liquids. The race for radio frequency identification (RFID) and tracking methods has been "on" because many of todays technological, supply chain and logistical leaders see RFID as this decades version of the Internet once the technologys standard and price competitiveness can be developed.
Leading the charge for the initiative are the Department of Defense (DOD) and the retail giant Wal-Mart, both convinced that RFID in their internal and external supply chains could save billions of dollars. The DOD will use RFID technology to become more fluid and efficient in its logistical challenges to deploy troops, equipment and supplies quickly to all areas of the globe in times of crisis. Both the DOD and Wal-Mart have initiated mandates to their top suppliers to be prepared to become RFID-active by January 2005. These mandates drew mixed reactions from their suppliers who have to contemplate their investment in the technology and resources necessary to comply with the RFID initiatives that remain in the infancy stage and are unproven in return on investment capabilities. Although RFID technology is in its early stages with many hurdles to overcome such as standardization and cost-efficiency issues, most of the interested private businesses agree that the benefits of RFID, once harnessed, will allow major improvements throughout their entire supply chains and logistical processes.
The overall benefits of RFID technology would include a real-time offering of the locations, contents and characteristics of all products within pallets, crates and containers. The increased information would allow for substantial cost savings from the prevention of out-of-stock items, excess inventory and shrinkage as products and materials are shipped f