DoD's top logistician: distribution costs and process changing with use of RFID tags.

The use of Radio Frequency Identification tags can save millions of dollars in storage and transportation costs, according to the Department of Defense's top logistician.

That is the message of Vice Admiral Gordon Holder, Director of Logistics, J-4, of The Joint Staff.

"This is technology that allows us to track our shipments," Holder told a Washington Chapter meeting of the National Defense Transportation Association, on March 18, in Roslyn, Va.

"We begin to see visibility when it is in shipping and when it is in the last tactical mile."

Holder, Commander of the Navy's Military Sealift Command from 1999-2001, said use of the Radio Frequency Identification tags is already saving defense dollars.

"I can't give you a precise figure," said Holder, "but by not shipping we've saved tens of millions of dollars."

Holder echoed a recent distribution theme, "The warehouse is in the pipeline."

Developing a Department of Defense standard is a key now, he said.

"We are working to develop the standard--the baseline--so data is interoperable."

Holder got a pleasant surprise at the meeting.

A member of the audience, David Stephens, of Savi Technology, Alexandria, Va., showed Holder a new Radio Frequency Identification tag.

Holder held the tag up for the audience to see.

"It is half the size and weight of other models," said Holder. "It is even cheaper."

Stephens said the tag is the Savi ST-654, a "data-rich active device."

"It is our new Radio Frequency Identification tag that is fully backward compatible with the Department of Defense's In-Transit Visibility infrastructure.

"We designed it and produce it for our customers," said Stephens. "It is highly functional."

The commercial sector will have to meet some challenges with increased use of the technology, said Holder.

"The commercial sector has to meet standards," said Holder. "The commercial sector has to put on the tags."

Holder cited two examples where the use of the tags had produced savings. He said a group of 19 shipping containers containing tank treads were redirected to an immediate customer's need. This saved a duplicate reorder. Holder said 109 containers of repair parts not needed in the War On Terrorism were returned to domestic depots.

Looking ahead, Holder said Radio Frequency Identification tags will push the military into more sophisticated distribution and consumption analysis.

"If you want to know when it is needed, you have to know when it is consumed--not issued," said Holder.