Getting real about RFID and the DoD

by Carl Brown

Before RFID, U.S. Department of Defense suppliers placed a plain paper tag on a box, checked this box off a manifest; taped the manifest to a box; and pushed the box out the door. Invoices were sent via email or fax.

In 2006 the DoD began requiring suppliers to add an RFID tag to all shipments. Or so the regulations and big announcements said.

The RFID tag’s simple 24-digit number is transmitted electronically to the DoD — along with information about the contents of the box it is attached to. When the box arrives the shipment is automatically scanned and received into DoD inventory. The electronically transmitted manifest is updated, ready for payment.

That’s the reality of today. This is currently embraced by more than 4,000 suppliers – yet, just yesterday, we met a DoD supplier that still wasn’t RFID tagging.

How does a mandate go on for 4 years and there are still laggards? There is one major challenge for the DoD: Embracing change.

First let me clarify some of what has been written about the scope of DoD vendors and how many are in RFID compliance. The real number of vendors who ship hard goods to the DoD is not 45,000 suppliers, a number commonly mentioned. It is closer to 8,000.

I think the misnomer of 45,000 is the number of suppliers who are DoD suppliers in theory and the differences in what they supply. Some large companies may ‘register’ though they don’t actually ship anything directly to DoD. They register so they can see the bidders’ lists and ensure they are part of any negotiations that may be occurring. Many others sell services, which don’t need tags.

When I spoke with DSCC (Defense Supply Columbus) they indicated there were 7,800 “individual contractors” awarded in 2008. Factor in that shipping houses handle a large portion of what is shipped to the DoD, there are probably 4,000+ compliant suppliers out of maybe 8-9,000.

That means we may be just over 50% compliance. Not wonderful, but…

The DoD is sending out warnings now. First warning is, “Your next non-compliant shipment will lower your quality score.” Enforcement will be sketchy since if you are a sole-supplier of a good, you can safely ignore these since no one else will bid.

Suppliers still think RFID is another fad that will pass. In the 90‘s, the DoD mandated ‘electronic commerce’ which launched many EDI companies. The end result? The mandate was changed to say that ‘email is a form of electronic commerce’. This caused many problems for the EDI companies that assumed thousands of customers would be purchasing EDI systems, but, great news for small business that couldn’t afford EDI.

it would be nice to see the entire process simplified.  The DoD makes change difficult to enact. A 145-page document (“Mil Std 129P”) details military labeling requirements. The 129P is verbose but ambiguous, precise but incomplete. In development for over 20 years – the text is obsolete yet memorized by veterans of the DoD supply industry. This legacy document makes any form of change difficult since the learning curve is insurmountable for a single person to cobble a solution together.

The reality is suppliers want to meet the mandate and do what should be done; but the guidance is frustrating. It’s a dichotomy. While it is mind-boggling there are still non-compliant people, they reach exasperation and desperation when trying to tackle the formidable 129P and those techie RFID requirements.

The “scofflaws” are desperate for guidance they can afford, understand, and implement. But they lag behind, their heads buried in hopes it will all just disappear.

Most DoD suppliers work with a packaging house like Ossco Products or EW Packaging. Both packagers handle the task of labeling and packing shipments for suppliers, providing an important service for many suppliers not big enough to have a dedicated shipping department.

The reality is: RFID has arrived. Advanced DoD suppliers have gone well beyond the mandate and use RFID for internal gain.

Excel Manufacturing of El Paso, Tex., is tagging 100% of their items at item level. Excel dynamically counts the quantity of items shipped in every box and on every pallet – in real time.

In fact, my team helps Excel record RFID-tagged video of every item and box. They can search for any garment and recall who packed it, when, and see a video of it just by entering its item ID.

Excel ships several thousand item-level RFID-tagged military uniforms every day. Vice President Jose Ortega says, “We spend about the same amount on item level RFID as we would spend on labor cost to ensure quality. The intangibles are the real benefit. With the Nox RFID system, asset tracking becomes valuable information and gives us a competitive edge.”

Suppliers need to embrace RFID quickly or risk falling behind. There are plenty of viable DoD tagging solutions on the market. Now we need to see the DoD deploy their item-level solutions internally and find ways to incent suppliers to item-tag.

Carl Brown is president of Simply RFID, a company specializing in asset tracking, helping DoD contractors and pioneering innovations in tying RFID to video monitoring.