IBM to track drugs and missiles for US army

The US Department of Defense project to roll-out RFID throughout its supply chain will get its pilot under the watchful eye of IBM, who have been selected by the DoD as consultants for the scheme, it was announced yesterday.

The Department of Defense is hoping to "realign resources and streamline business processes" by using the technology – that is, eliminate the human element and increase efficiency – across the supply chain on case and pallet level.

The consulting contract will run for three years and will see IBM help the DoD get its RFID strategy worked out by a 30 June deadline and get it actioned across the department's diverse units, as well as ensure data security. Big Blue will also help sort out details of funding – how much the Department will contribute and how much the suppliers will be expected to cough up – and running some RFID pilots.

While the idea of a supplier issuing a mandate as unilateral as that of the Department of Defense's and then possibly not sweetening the pill with some cash might irk some suppliers,

Enrico Camerinelli, programme director of technology research strategy for analyst house Meta Group, said the roll-out can still be a win-win for supplier and customer.

"[Suppliers] know if they want to keep doing business with big clients they will have to cope with RFID edicts like this... The immediate benefits of using RFID for 'slap and ship' – like being able to use data to better forecast demands - can be shared fifty-fifty between user and supplier," he told silicon.com.

No doubt a comprehensive strategy will be in order, given that the US military has 43,000 individual suppliers of varying sizes covering military equipment from missile parts to clothing and drugs.

The Department of Defense has already trialled the technology in the field, with RFID tags used to monitor container shipments in the recent war on Iraq, according to the American Forces Information Service (AFIS), and currently uses it in supplies distribution in one supply centre in Virginia. Plans to track rations and biological suits in the first quarter of this year are also afoot.

Alan Estevez, assistant deputy undersecretary of defense for supply chain integration, told the AFIS: "The way we fight has changed... We have to transform our logistics capabilities in order to meet that new way of fighting wars. RFID is a key component of changing logistics capability, of enhancing our ability to supply our forces."

The DoD has laid a deadline on its suppliers of 1 January 2005 to get onboard with RFID. It's not the first end user to make such demands – WalMart also told all its suppliers to start putting the technology on their goods by the start of 2005.

William Phillips, defence industry leader for IBM Business Consulting Services, said that rather than expecting all the suppliers to have RFID up and running on that date, there will be room for manoeuvre. "Part of the contract is to help the DoD figure out what should be in place by the January 2005 deadline and suppliers getting it underway," he told silicon.com.

He added the roll-out would likely be under scrutiny by other government agencies, with potential for the tracking of pharmaceuticals and livestock, with implications for the Department of Homeland Security also important. IBM is currently in discussions with other government agencies internationally over RFID roll-outs.

RFID has long been hailed as the supply chain's great white hope, with a recent report from analyst house IDC predicting an increase in RFID spend from $91.5m last year to $1bn in 2008, however, some of the business community are still a little cautious about dipping their feet in the RFID waters after adverse reactions from the public.

Microsoft's Martyn Cole, retail systems manager, said that given the size of the defence budget, any savings from RFID will be good news for taxpayers, despite the controversial nature of the technology. "Consumers will forgive a lot if they think they're getting good value," he said.