RFID's Impact On Supply Chains Grows, Execs Say 2

The impact radio-frequency identification has throughout an entire supply chain is top of mind for a number of companies experimenting with the technology. A group of business-technology executives from the U.S. Department of Defense, Michelin Tires, Cisco Systems, the U.S. Food and Drug Administration, Boeing, and Albertsons shared their experiences thus far at this week's EPC Global U.S. Conference in Baltimore.

For Boeing Commercial Airplanes, RFID could shave weeks out of the time it takes to build an airplane. The company is looking at using RFID to tag individual parts of an airplane that could then be easily tracked as planes are built. Kenneth D. Porad, automated identification program manager at Boeing, said that by using a combination of active and passive RFID technology, Boeing predicts it will be able to build airplanes in 72 hours--a process that historically takes 18 to 30 days. The initiative will require various levels of systems integration to track all the information.

Boeing isn't the only company that sees advantages to item-level tagging. The FDA is evaluating tagging items on an individual level to combat an increase in drug counterfeiting worldwide. Paul Rudolf, senior adviser of medical and health-care policy at the agency, said plans are to begin tagging medicine bottles and single-unit items, instead of bulk containers, by 2007.

Adhering to global standards in addition to U.S. standards is another hot topic for organizations testing RFID. That's particularly important to the Defense Department, which must distribute goods around the world. Alan Estevez, assistant deputy undersecretary of defense, said the Defense Department's next step in its RFID initiative is to use passive RFID tags on boxes that are shipped to armed forces overseas. Currently, the Defense Department has 22 operational distribution centers that plan to use passive RFID tags by January.

It's also not clear how well RFID technology will scale to supply chains that move thousands of goods among numerous partners. What's needed, some of the executives said, is hefty middleware technology that can make sense of all the RFID data. "We're going to get a couple of bloody noses as we figure out what is that middle layer," Estevez said. "There is a fear factor that we do not yet have solutions in place to do scalable implementations. Making the technology work and making sure it pays off is the real challenge."

The conference is put on by EPC Global, the industry organization steering development of standards for RFID and related technologies. The event, which wraps up Thursday, includes a variety of seminars and an exhibit hall featuring the latest RFID products and services.