ADVICE+DISSENT Managing Technology Setting the Standard
Although the Defense Department is well on its way to achieving significant savings throughout the supply chain with radio frequency identification (RFID), maximum benefits will be attained only when true standardization is achieved. That means that all parties - vendors, companies and government agencies - must agree on the technical specifications of both tags and readers.
"We're embracing the same standards as the commercial sector, but even within that, there are few [existing RFID] standards," says Alan Estevez, assistant deputy undersecretary of Defense for supply chain integration. "We need to drive to one standard so any reader can read any tag."
The standard envisioned by Defense Department officials and commercial leaders such as Wal-Mart and Procter & Gamble is called the Electronic Product Code, a product numbering standard under development by the Uniform Code Council and its subsidiary EPCGlobal, as well as Auto-ID Labs, an outgrowth of the Massachusetts Institute of Technology's Auto-ID Center. The EPC is a unique number stored on an RFID tag that identifies a specific item in the supply chain . It provides a uniform way of identifying inventory.
Once fully developed, the standard will help drive cost savings, says Ed Coyle, chief of Defense's Logistics Automatic Identification Technology Office.
"Today, [passive] RFID tags are well under a dollar, but if we can all agree on some standards and end up purchasing the same type of tags, they could get down to 5 cents," he says. "We can handle [paying] a nickel on a pallet or case worth of goods."
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