Department of Defense

1

• Department of Defense
• Radio Frequency Identification (RFID)
• Brad Cougher
• Office of the Under Secretary of Defense
• Supply Chain Integration
• June 3, 2008

2
Agenda

• What is RFID?
• DoD RFID Vision and Commitment
• RFID Policy, Contractual Requirements and
  Compliance
• Process Efficiencies Gained
• RFID at the Item Level

3
What Is RFID?
Radio Frequency Identification An automatic
identification technology that stores and
retrieves data using transponders (tags). It is
a means of identifying a unique object or person
using radio frequency transmission.

• How does it operate?
• Tags are affixed to objects.
• Tags can be read remotely by a reader over a
  range of distances.
• Readers then either send tag information over the
  enterprise network to back-end systems for
  processing or display the tag info to the
  end-user.

4
The DoD RFID Vision
Provide first-class, knowledge-enabled logistics
support to the warfighter by improving process
efficiencies.
RFID is a tool to obtain the benefits of
Knowledge-Enabled Logistics Support
5
DoD Committed to Two Types of RFID in the DoD
Supply Chain

• Active RFID Provides in-transit asset
  visibility of large consolidated shipments
• Applied to freight containers, air pallets, large
  engine containers
• Suppliers rarely required to apply active RFID
  tags
• No DFARS Clause requiring active tags
• Passive RFID Enables business process
  efficiencies in receiving, shipping
• Applied to cases, pallets (warehouse)
• Wide-scale commercial implementations
• Supplier contractually obligated to apply passive
  tags to cases and
  pallets in accordance with DFARS

6
RFID Implementations will Enable Supply Chain
Shipping and Receiving Process Efficiencies
Transportation/Supply Depots
Manufacturers/Suppliers
Customers
Port of Embarkation /Debarkation
Distribution Centers/Depots
Work with DoD Services/Agencies
Work with DoD Suppliers
DoDs passive RFID initiative is a coordinated
effort with two parts.
7
Components of the Passive RFID DFARS Clause

• Covers
• Classes of Supply that require tagging
• Exclusions
• Specific Ship-to Locations for which tagging is
  required
• Advance Shipment Notice
• The DFARS facilitates the DoD Suppliers role in
  RFID-enabled business processes to transform the
  DoD Supply Chain.
• The DFARS is evaluated and updated as often and
  as appropriate as necessary.
• Recent examples are
• Pharmaceuticals
• Additional Locations

8
Passive RFID Contractual RequirementsRemain
Constant

• Two Major Requirements for Suppliers
• Passive RFID Tagging at the case and pallet level
  in accordance with the Passive RFID DFARS Clause
  and the Supplier Implementation Plan
• Advance Shipment Notice (ASN) via User Defined
  File/File Transfer Protocol (UDF/FTP), Electronic
  Data Interchange (EDI) 856, or Web Page Entry
• Specific Requirements
• Data encoded on tag must be unique.
• Supplier must ensure the passive tag affixed to
  package is readable.
• Passive tag is affixed at the appropriate
  location on the specified level of packaging in
  accordance with MIL-STD-129P (Section 4.9.2) tag
  placement specifications.
• Contractor required to use tag identity types in
  accordance with the details located at
  http//www.dodrfid.org/tagdata.htm.
• Contractor electronically submits an advance
  shipment notice in accordance with procedures at
  http//www.dodrfid.org/asn.htm.
• A Passive RFID Supplier Information Guide that
  contains information detailing requirements for
  compliance is located at www.dodrfid.org/supplierg
  uide.htm.

9
Application of Passive RFID Clause Continues to
Grow
August 2007 through January 2008

• In just 6 months time, DLA issued 170,501 awards
  to 5,174 suppliers with contracts that had the
  RFID DFARS clause.
• The 5,174 suppliers represent 49 of DLAs active
  supplier base.
• DLA is communicating with suppliers on
  non-compliant shipments.

Suppliers
Tagged Materiel
10

• Identifying Process Improvements Using RFID

11
Identifying Process Efficiencies using Passive
RFID
Passive RFID provides a new data point
revealing actual materiel movement more
discretely for the first time.
Continuous Process Improvement (CPI)
We need to understand this gap
Root cause analysis
Actual Movement of Materiel
System Transaction
RFID Middle-ware
Logistics System
Issue Identification
Identify issues with the process between these
two points
Accurate measurement
12

New RFID Data Point Provides Additional Insight
within Response Time Segments
Storage Depot Time
Transportation / Theater Time
Receipt Transaction
Shipment Transaction
Shipment Transaction
Arrival
Departure
Departure
Retail Logistics System
RFID Middle-ware
RFID Middle-ware
RFID Middle-ware
Logistics System
Logistics System
Retail Facility
Trans-shipment Point
Distribution Depot
13
RFID Reveals Potential Areas for Improvement at
Container Consolidation Point
The average time to build a container load at the
CCP was over 3 days
In-transit to the Customer
Transportation Time
System transaction indicating truck departure
Materiel loaded onto the truck trailer
RFID Middle-ware
Logistics System
The average time to build a container was
variable
Average 3.33 days
14
RFID Reveals Potential Areas for Improvement at
Retail Sites
Site A had an average receipt posting of 0.3
days. Site B had an average receipt posting of
8.5 days.
The new data makes this process visible for
analysis.
Transportation Time
Actual Arrival of Materiel (Visibility
Transaction)
System Receipt Transaction
Retail Logistics System
RFID Middle-ware
Opportunity Reduce receipt take-up time Business
Benefits Materiel to the customer more quickly,
Increased throughput
15
RFID Reveals Precise Materiel Movement, Enabling
Lean Six Sigma Process Analysis
RFID LRT Mean 32 days STDev 17.5
days System LRT Mean 43.5 days STDev 24 days
68 of requisitions actually arrived within the
delivery target of 37 days compared to 56 of
system receipts.
16

Potential Improvements Will Have Cumulative
Effect across the DoD Supply Chain
Transportation / Theater Time
Storage Depot Time
Receipt Transaction
Shipment Transaction
Shipment Transaction
Arrival
Departure
Departure
Retail Facility
Trans-shipment Point
Distribution Depot
8-day improvement
1-day improvement
2-day improvement
11-day improvement
days improvement are examples only
17
Implementing RFID in the DoD Supply Chain

• Passive RFID provides a new data point.
• Captures precise measurement of materiel flow
• Identifies potential opportunities for
  improvement
• Improve business processes (Lean Six Sigma
  approach)
• Timely system updates
• Even initial implementations at small sites yield
  opportunities for improvement.
• Additional implementation analysis will continue.

18

• Using RFID at the Item Level

19
Aerospace Community Has Expressed Interest in
Using RFID as an Additional Technology for Item
Identification
Item
Identification using the 2D Data Matrix
2D Data Matrix
2D Data Matrix part mark is still required
Identification using RFID
Item
RFID Tag
The UID policy is not changing to include RFID
20
For Your Information

• For additional information, visit
  http//www.dodrfid.org
• DoD RFID Policy
• DoD RFID Supplier Implementation Plan
• DoD Suppliers Passive RFID Information Guide
• MIL-STD-129P(3) (Updated with RFID changes)
• Wide Area Workflow (WAWF) Information
• Frequently Asked Questions (FAQs)
• Lessons Learned
• You can ask the team any RFID-related question
  through the following email address
  info_at_dodrfid.org