 | Wednesday, May 7, 2008
Issue 834 | | Will Smith, Editor |  |
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Editor's Note: Today's top story is a follow-up to yesterday's US Army Issues RFP for Large RFID Purchase. Industry observers believe the US Army's efforts to contract for thousands of passive RFID readers and related software and services may not provide a windfall for RFID vendors, but will play a more important role in validating the technology.
In other defense news, Government Computer News reports on an application being developed for the Army that would use RFID to automate the tracking of weapons use. Many people don't realize that soldiers are supposed to tally the number of shots fired during combat, to help record how quickly a weapon is aging and when it should be replaced. RFID, combined with sensors, could automate this imperfect and distracting process.
RTLS provider AeroScout has announced the deployment of its technology by candy giant Wrigley at that company's largest European production facility, in Poznan, Poland. It is a pallet-tracking work-in-process (WIP) deployment, which Wrigley believes will cut production time at the facility.
Lastly, note the new classified listing below for the Ferroxtag, a new family of HF RFID tags suitable for operation on metallic surfaces. |
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| RFID Tags & Labels | - Ferroxtag HF tags: Smart on Metal! (site)  | | - Confidence in RFID - Confidex tags and tickets (site) | | | RTLS & Active RFID | | 
Sponsored by Ekahau | |
| | - Locate it now. How? Ekahau. That's how! (site) | | | Products & Services | | - PCB Tracking & Visibility Solution from Omnitrol Networks (site) | | - Employees steal over $1 billion per week from employers (site) | | | Upcoming Events | | - AWA PABS08 N. America Conference, Sept 11-12, Chicago, IL (site) | | - AWA PABS08 Asia Conference, Dec 4-5 - Hong Kong, China (site) | | - European Supply Chain & Logistics, 13-15 May, Germany (site) | | - SCAN & RFID CHINA 2008, June 19-21, Guangzhou, China (site) | | | Employment | | - RFID Recruiters - 100% Focused on RFID Recruiting (site) | | | Research & Whitepapers | | - RFID Marketing Strategies Report (site) | |
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Army RFID Contracts to Create Market Boost, Not Boom
By John Burnell
The US Army is currently accepting requests for proposals (RFP) to guide potentially millions of dollars of spending on passive RFID equipment and services (see yesterday's US Army Issues RFP for Large RFID Purchase). Despite the dollars, the Army's biggest impact on the RFID industry could be by validating the technology's value for improving inventory, material management, and supply chain operations, and pointing the way for companies in the private sector to follow.
In the first three years after the contracts are awarded the Army expects to purchase approximately 5,894 fixed-position readers, 2,199 handheld readers, 646 printer/encoders, 53,642 general-purpose tags, and 3,803 software licenses, according to background documents available with the Army's official RFP. The contract calls for RFID hardware and software to comply with EPCglobal Gen2 standards when applicable.
"It's not a huge market," Louis Bianchin, senior RFID analyst at Boston-area market research firm Venture Development Corp. (VDC), told RFID Update. "Don't get me wrong, it's an interesting market, and is very large for a single customer. But it is not going to significantly move the needle for overall RFID industry revenues."
The Army will purchase about 1,700 readers (handheld and fixed) during the first year of the contract, according to its own estimates. Bianchin said that represents less than five percent VDC's projected worldwide reader sales for 2008.
Furthermore, the contracts will be on indefinite-quantity, indefinite-delivery terms, which create no minimum purchase requirements.
"The intent of this contract is to provide an easy way for organizations within the Army to purchase RFID. I don't see anything in it that commits the government to buying," Pete Poorman, principal RFID analyst at ABI Research in Oyster Bay, NY, told RFID Update. Poorman has experience in military and government contracting from his private-sector career prior to joining ABI. "The contract also doesn't preclude the Army from issuing new RFPs for specific projects. So in that sense, whoever wins the contract isn't guaranteed to be on any short list for future purchases."
However, both analysts think the contract will result in near-term RFID sales and will have a positive effect that exceeds the revenue value.
"It will give the market a boost, but the numbers won't be big enough to get Wall Street excited," Bianchin said. "The Army's contract expectations are a good sign for the RFID industry. It's very positive, and it's a good validation of passive EPC Gen2 technology."
The Army contract initiative is a positive sign that will have a tangible impact on application development and implementation, according to Patrick Sweeney, CEO of RFID vendor ODIN technologies. ODIN has installed passive RFID infrastructure systems at numerous Defense Logistics Agency distribution facilities as part of an unrelated contract (see ODIN Wins $7m RFID Contract from DoD), and plans to pursue the current Army opportunity.
"The value of RFID depends on applications, and applications need an RFID infrastructure in place," Sweeney said. "By installing RFID readers at its dock doors, the DLA created the infrastructure. That provided a launching pad for applications. That's where the Army comes in, because their applications will go well beyond material receipt."
The small amount of tags in the Army's expected purchase quantity estimate (53,642 over three years) relative to the amount of hardware, software, and services does suggest the Army plans to use tags applied by suppliers and at DLA facilities (which provide logistics services to all military branches) as part of its own applications.
"The Army is only buying about 100 tags for each reader. That shows the vast majority of things they expect to read will be tagged from the outside," said Poorman. "To me, this is another indication of the RFID ramp-up throughout the DoD. The most significant aspect of this RFP is that it is a very positive and encouraging development for the RFID industry."
Sweeney said such adoption patterns are common in large organizations.
"When you look at our large global customers, 75 percent of them are using RFID to leverage multiple projects," said ODIN's Sweeney. "The contract gives the Army a laundry list to pursue a variety of applications to do the same thing."
Aircraft manufacturer Airbus serves as a good example of how a large private-sector company is using standardized RFID technology and a common infrastructure to support multiple projects (for examples, see Airbus Sheds Light on Its Ambitious RFID Program). Airbus is also an ODIN customer (see Airbus Taps ODIN, Signals Aerospace RFID Adoption).
The Army's proposal deadline is May 14, 2008, and it has no deadline to award the contracts. It will likely be years after the deals are announced before the full impact is understood.
"With government projects, a three-year contract is a short time," said Poorman. "They do things for the long term."
"Some consider the Army a laggard in RFID adoption, but its leadership, under Lt. Col. Burdon, had the foresight to wait to see where the applications and infrastructure would be. Now I think the Army is going to leapfrog other users," said Sweeney. "The Army realizes RFID technology is ready for prime time and is not going away."
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| RFID Tags & Labels | Ferroxtag HF tags: Smart on Metal!
Ferroxtag is a new family of HF RFID tags suitable for operation on metallic surfaces. Ferroxtag's special ferrite antenna was developed using Ferroxcube's years of experience in ferrite technology. The high performance antenna means longer read range with a smaller tag. Visit www.ferroxtag.com | Confidence in RFID - Confidex tags and tickets
The challenges of various industries lead Confidex to develop a comprehensive offering of special tags and labels. Confidex tags are used in a variety of applications ranging from tracking items in the retail supply chain to automotive manufacturing and petrochemical installations. Confidex designs and manufactures contactless tickets for public transport. Visit www.confidex.fi | | | RTLS & Active RFID | Locate it now. How? Ekahau. That's how!
Ekahau RTLS (Real-Time Location System) automatically tracks assets and people via your existing Wi-Fi network. Control costs and improve asset management with Ekahau. For more information, visit us at www.ekahau.com. | | | Products & Services | PCB Tracking & Visibility Solution from Omnitrol Networks
Off-the-shelf solution provides automated real-time visibility and complete electronic pedigree for traceability on parts and WIP providing real-time dashboards, alerts and reports for shop-floor management. The pedigree information is automatically programmed into Texas Instruments' RFID tag for access to critical data without the need for connection to a back-end database. Learn more. | Employees steal over $1 billion per week from employers
the American Management Association reports. 95% of businesses are victimized by employee theft. Managers are reluctant to ask questions, because trusted employees may feel offended, leaving business owners in a difficult situation. What can you do? Nox: Intelligent Perimeter Defense from Simply RFID provides advanced security and protection for business assets. | | | Upcoming Events | AWA PABS08 N. America Conference, Sept 11-12, Chicago, IL
AWA is organizing the Product Authentication & Brand Security Conference 2008 on September 11-12 in Chicago, IL. The event includes presentations and panel discussions with brand owners, legal authorities, associations, converters and suppliers; also networking sessions, a supplier forum, a social program and more. Find more on the program here. | AWA PABS08 Asia Conference, Dec 4-5 - Hong Kong, China
AWA presents the Asian Product Authentication & Brand Security Conference 2008, to be held on 4 & 5 December in Hong Kong, China. PABS08 Asia focuses on the threats specific to the Asia Pacific region, various elements of IP Theft, and leading-edge solutions. Find more on the program here. | European Supply Chain & Logistics, 13-15 May, Germany
Bringing together Europe's leading providers of supply chain management to evaluate best practices and to move the supply chain agenda into the boardroom. Also, featuring the AMR Research Strategy Session: What makes a supply chain world class in today's global market? More information here: www.supplychain.eu.com | SCAN & RFID CHINA 2008, June 19-21, Guangzhou, China
As one of the earliest, most specialized and authoritative exhibitions in China, approved and supported directly from State Ministry, the 8th SCAN & RFID CHINA 2008 will present you the impressive up-dated development and market of RFID technology in rising China. To know more, please go to www.scan-china.com. | | | Employment | RFID Recruiters - 100% Focused on RFID Recruiting
Whether your company is looking for the best RFID talent or you have the best RFID talent and are looking for the best RFID employer, RFID Recruiters offers the most focused approach to your objective. To learn how the RFID industry and the RFID job market are evolving, visit www.rfidrecruiters.com | | | Research & Whitepapers | RFID Marketing Strategies Report
Thirty-nine pages of original research on RFID audience perceptions, including 30+ figures of tactics, content & messaging, and recommendations to guide marketing strategy. Also, Top-10 RFID company rankings based on 550+ survey respondents. View the executive summary free, with Top-3 sample rankings. Only $495 Individual License or $795 Corporate License. Available now |
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RFID Update is the RFID industry daily. Launched in early 2004 to provide timely analysis of RFID industry news, RFID Update publishes editorial briefings every weekday for the growing ranks of top level executives involved in the deployment of RFID. Each issue delivers the breaking news and analysis most pertinent to successful RFID implementations, allowing readers to understand global RFID developments as they happen.
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