The Department of Defense issued a mandate early this month requiring all of its suppliers to use passive RFID tags on the cases and pallets they deliver to its various branches by January 2005. The Defense Department isn't the first to require that suppliers support RFID--Wal-Mart Stores Inc. has told its top 100 suppliers to use RFID tags on cases and pallets by the same date and will require all its suppliers to use the technology in 2006.. . .
The Department of Defense issued a mandate early this month requiring all of its suppliers to use passive RFID tags on the cases and pallets they deliver to its various branches by January 2005. The Defense Department isn't the first to require that suppliers support RFID--Wal-Mart Stores Inc. has told its top 100 suppliers to use RFID tags on cases and pallets by the same date and will require all its suppliers to use the technology in 2006.

RFID is expected to improve inventory management with less manpower. Today, Defense agencies check inventory manually with bar-code scanners, says Alan Estevez, assistant deputy undersecretary of defense for supply-chain integration. "Anytime you have intervention, there's some margin of error. With passive RFID, you now have the ability to in-check without manual intervention."

The Defense Department's directive could have huge ramifications for the technology, which until recently has been too costly to use on a wide scale. The initiative will affect tens of thousands of suppliers, more than Wal-Mart's initiative, which ultimately will involve more than 10,000 suppliers. The Defense Logistics Agency, the department's largest agency, has nearly 24,000 providers.

"This is as good or better than the Wal-Mart mandate in terms of driving adoption of RFID," says Noha Tohamy, a Forrester Research senior analyst. The Defense Department "is a global enterprise," she adds. "They stay away from proprietary deployments."

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