Paraphased from the International Herald Tribune:
On Monday, October 14 the US Department of Defense began implementing requirements for suppliers to use RFID tags on all cartons and pallets of goods entering the supply system. The first stage of the program will apply only to the New Cumberland, Pennsylvania and San Joaquin, California depots, the Defense Department's two largest supply centers. To control the process, the DOD is only requiring RFID labeling on new or renewed contracts only.
Some of DOD's largest suppliers see the writing on the wall, and will begin supplying RFID tags going to the two facilities, although not technically required to do so. Striving not to be left behind when contracts expire, Raytheon and others have active internal RFID programs and want to support the Defense Department's efforts, and qualify for new contracts at the same time. It is estimated that more than 16% of the current sixty-thousand suppliers will come under the Department of Defense's requirments within the next year.
RFID proponents say the technology promises savings of billions of dollars by cutting waste and time in the supply chain, and elimating the labor required to scan conventional barcodes. Since RFID reader can read multiple tags at the same time, the allure of reading all the boxes in a pallet or all the products in a customer's cart has driven implementation of by both the Defense Department and retailer WalMart. Finding the savings continues to be a challenge however, as collecting the data reliably has proven to be a trial and error process, with initial cost and implemention time estimates being over run.
Many in the industry are looking at the military's implementation of the technology, as their supply chain is far larger than WalMart, and more complex than perhaps any other in the world. But the DOD's backing of the technology is giving both adopters and investors that the technology is here to stay. Further, the government will absorb the cost of implementation.
Most critics of the technology forget the last point....Uncle Sam is footing the bill to get this work. If they can spend enough to fix the B-1 bomber, they'll make this technology stable enough to be available in every store and convenience store, just like the barcode scanner