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DoD, Not Wal-Mart, Driving RFID |
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Written by Mike Buetow
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Friday, 08 April 2005 |
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OYSTER BAY, NY - Most of the public attention given to RFID has focused on the retail supply chain, especially Wal-Mart's mandate to its top 100 suppliers. But the U.S. Department of Defense is also mandating its use this year - to all of its 43,000-plus suppliers. Add to that the needs of the aerospace industry, particularly the two giant aircraft makers, Boeing and Airbus, and the shape of a massive vertical RFID market emerges.
Boeing and Airbus - which use many of the same components - are working with the US Federal Aviation Administration to formalize UHF RFID certification for systems to track aircraft parts, says Erik Michielsen, ABI Research director of RFID and ubiquitous networks. The hoped-for improvement in ROI is of vital importance to an industry that has been hard-hit by recent economic conditions. Safer planes and fewer procurement overlaps are added incentives.
"The airline industry is obviously profit-based," Michielsen says. "They want efficient manufacturing, supply chain and asset tracking systems to create economical business models. With the DoD, RFID is not about business models: it's about improving military operations efficiency in acquiring materiel from suppliers and making sure it gets to units in the field. These are massive, aggressive and very complex initiatives that will be major factors driving RFID's adoption."
The first beneficiaries are the RFID suppliers who have been granted "Blanket Purchase Agreement" awards, certifying that their systems meet the DoD's requirements, ABI says. The first five companies in this favored position are UHF EPC Class 1 transponder suppliers Alien Technologies, Avery Dennison, CDO Technologies, Lowry Computer Products and Intermec. Other BPA awards are expected soon.
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