DEPARTMENT OF DEFENSE’S USE OF RFID TECHNOLOGY FOR IN-TRANSIT VISIBILITY, ASSET VISIBILITY, AND ITS RETURN ON INVESTMENT

FINAL DRAFT

by

Anthony “Tony” Stoneking tony_ret@yahoo.com

A Graduate Research Proposal Submitted for INSS 690 in Partial Fulfillment of the Requirements of

the Degree of Master of Science in Management Information Systems

Bowie State University Maryland in Europe

July 2006

TABLE OF CONTENTS Page

ABSTRACT iii LIST OF FIGURES iv CHAPTER I. INTRODUCTION 1 The Questions 1 Definition of the Terms 2 II. THE DOD RFID EXPERIENCE 5 DOD´s Interest 7 Main Uses of RFID 9 Coordinating DOD Logistics AIT Standards 12 Security and Information Assurance Impacts 13 Benefits, and Their Cost 15 III. SUMMARY 17 REFERENCES. 19

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ABSTRACT

With the establishment of the DOD Logistics Automatic Identification Technology (AIT) Task Force in January 1997, the Department of Defense crossed the threshold of the stubby pencil drill into the promising future incorporating AIT, in the form of active Radio Frequency Identification (RFID) technology, as a standard business practice. The purpose of this paper is to look at this effort, incorporating its progress through the years to the present nearly 10 years later, and provide a summation of the DOD AIT’s return on investment. Investigating and reviewing the numerous DOD level agencies which have provided significant influence over the years of the active RFID implementation and interviewing the agencies’ stalwarts of experience to provide interesting insights towards the tangible and intangible returns on investment of the DOD capitalization of the active RFID program.

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LIST OF FIGURES

Page

Figure 1 - Remote Location Logistics Storage Yard 9 Figure 2 - Why ITV is important to the Warfighter 11 Figure 3 - RFID Architecture – High Level Overview 12 Figure 4 - RF-ITV Tracking Portal 14 Figure 5 - RFID Tags´ Example 15

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CHAPTER I

INTRODUCTION

To accomplish the purpose of this paper identified in the abstract, the following questions

have been answered via review of existing references. The research hypothesis in this case comes in the form of considering questions. The questions identified in the proposal are:

• What stimulated DOD interest in automatic identification technology? • Why did Radio Frequency Identification technology become important to the

DOD? • What are the main uses of RFID within the DOD? • How much has the DOD RFID program cost, exploring not only fixed and

known costs, but also the intangible benefits? DOD is a non-profit organization, so costs must be measured in other ways.

• What comparison between the program total cost and return on investment can

be demonstrated and how? Nearly all answers to the questions above are found as on-line references but some were

obtained via interviews as well as information discovery through hard copy documentation in possession of any of the interviewees. The answers obtained demonstrate the viability of DOD’s investment and the expenditures in the DOD RFID program as a worthwhile endeavor. The answers will also demonstrate the potential and capability of this technology as delivered to the DOD. Further, the discussion highlights the incorporation of the technology within the DOD’s business practices which not only serve to demonstrate the worthiness of the money spent, but a template for future considerations to embrace other technologies. Finally, in consideration of the questions, this paper captures the history and evolution of the DOD RFID program, as well as hints at its technological way ahead.

2 Definition of the Terms. The terms used throughout this paper are described in this paragraph. Intent is to follow standard industry naming conventions when possible, but given the unique nature of the Department of Defense, some commercial or civilian industry normal definitions are superseded by the definitions listed below. American National Standards Institute. Abbreviated ANSI, it is the administrator and coordinator of the United States private sector voluntary standardization system. Its primary goal the enhancement of global competitiveness of U.S. business and the American quality of life by promoting and facilitating voluntary consensus standards and conformity assessment systems and promoting their integrity. Automatic Identification Technology. Technology, such as bar coding or RFID systems, providing an automatic input to a software application without having to re-key previously entered and subsequently recorded data. The AIT systems are generally comprised of the data source, a compatible reader, and a computer with an appropriate software application. Automated Information Systems. This is the software application resident upon the computer receiving various forms of input such as keyboard, AIT readers, or another computer system via an interface. For example, Microsoft Office Suite is an AIS.

Forward Logistics / Support Base. For comparable reference to the US FSB, the United Kingdom Forces’ FSB is a tented camp comprising of 47 standard size air conditioned tents which are able to accommodate up to 8 persons per tent. The FSB covers an area of 28000 square meters. The camp comprises of 3 office tents, a medical center tent, an Operations and Command Center tent, a tented field kitchen, 2 dining tents (officers' and others') a Field Post Office (BFPO), Royal Military Police (RMP) Post, a gymnasium and 23 sleeping tents.

Interrogator. A device used to communicate with RFID tags. The interrogator has one or more antennas, which emit radio waves and receive signals back from the tag. The interrogator gets its name because it "interrogates" the tag. A more commonly used term is reader.

International Organization for Standardization. The ISO is a global standardization body

made up of one member from each of the 156 nations various national standards´ institutes. It is a non-governmental agency and its goal is simple – to facilitate, develop and unify global standards. It is important to note the ISO standards are voluntary, but industry and government alike almost always adopt them.

Linear Bar Codes. Common AIT used extensively in civil sector and DOD to record things like Unit Product Codes (UPCs). Consists of a cluster of lines of varying thickness. Can store 17-20 alphanumeric characters. If any portion of the bar code is damaged, entire code is unreadable.

3 Logistics Support Area. The LSA varies depending upon the mission it is supporting, but

can typically be expected to provide the different areas of functional logistics support. At a minimum it is reasonable to assume adequate medical, lodging, feeding, repairing, and sustainment capabilities for the type of unit personnel and its equipment conducting the mission. Main Supply Route. The primary route having suitable road characteristics in support of the various vehicles transversing the roadway. The main supply route also includes security measures and the types of supplies and equipment likely to transit the route.

Radio Frequency Identification. A method to communicate between electronic devices using radio frequency energy. The first, an interrogator (or reader) sends a low-level RF signal to the RFID tag, “waking it up”. The tag produces a sufficient signal in return, providing the requisite information to enable the interrogator to pass what it receives to a computer and its automated information system for further sharing of data to the RFID server and updating of its database.

Active RFID. This refers to an RFID transponder (tag) having internal power (battery). When the active tag receives the interrogator’s signal, it uses its internal power to respond. Active tags with internal power have a much greater signal communication range than passive RFID tags, typically up to 100 meters.

Passive RFID. This type of tag is typically very small, consisting of an antenna

connected to a nanotechnology-sized computer chip. The antenna captures the interrogator’s signal, absorbing its energy, which activates the chip, and then reflects the chip’s instruction (typically the tag’s unique identifier) back to the reader. The range of the passive RFID tag is not more than 10 meters.

Retriever. This is the computer connected to the interrogators. As the term implies, it

receives information from the interrogator. The retriever controls the interrogator’s function, captures its data, adds date-time stamps to the data captures, and subsequently transmits the consolidated data to the server.

Satellite Tracking Systems (STS). Uses Global Positioning Satellite (GPS) down and up-link communications to provide real-time in-transit visibility of assets and personnel. While they are widely employed in the commercial trucking industry, the US Army is the largest user of STS, primarily a system known as the Mobility Tracking System (MTS), to track its convoys.

Two-Dimensional Bar Codes (2D Bar Codes). Second-generation bar code. Can record

approximately 1850 characters. Contains several layers of redundancy so it can be read even if a portion of the code is damaged. Can contain both supply and transportation data.

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Transponder. This is a wireless communications, monitoring, or control device that picks

up and automatically responds to an incoming signal. The name comes from a contraction of the words transmitter and responder. Transponders are either passive or active RF devices.

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CHAPTER II

The DOD RFID Experience.

What stimulated DOD interest in automatic identification technology?

RFID is a transformational technology and will play a vital role in achieving the DOD vision for implementing knowledge-enabled logistic support to the warfighter through fully automated visibility and management of assets (BTA, 2006). Although this comment comes from the recently established DOD Business Transformation Agency, the RFID technology application of asset tagging for in-transit visibility has been in use by the DOD for over a decade.

In January 1997, the Deputy Under Secretary of Defense for Logistics and Materiel Readiness (DUSD (L&MR)) established a task force to develop a Concept of Operations (CONOPS) for logistics processes that required tracking of materiel through the logistics chain. The AIT Principals approved the resulting Logistics AIT CONOPS in April 1997, earning approval from the Under Secretary of Defense for Acquisition and Technology (USD (A&T)) on November 12, 1997. The CONOPS describes the DOD vision for attaining an optimum mix of AIT technologies to allow the efficient capture, aggregation, and transfer of data and information in near real time.

In September 1997 the DOD designated the Defense Logistics Agency (DLA) as the Executive Agent to develop and implement the DOD Logistics AIT Program. The DOD Logistics AIT Office was chartered to represent the Executive Agent with the mission to promote, manage, coordinate, and document the integration of AIT applications in the DOD logistics community, worldwide. The AIT Office operates as a joint organization, administratively supported by DLA, with guidance from the DUSD (L&MR) and the Joint Staff Director for Logistics (JSJ4).

Providing in-transit asset visibility to the war fighter is a critical component to the

Commander’s operation. The Department of Defense does well to acquire materiel and then subsequently transport it using the modern day, peacetime infrastructure, but the picture below demonstrates the uniqueness of the Department of Defense’s operating environment upon a major deployment. The picture demonstrates the massive deployment of support materials and equipment to a remote location without any supporting infrastructure. It is far different from entering a large department store, orienting yourself to the general area where the item you desire

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is located, and going to that area and retrieving it. The boots-on-the-ground service member needs automatic identification technology (AIT) to help him find his item.

Fig 1. A make-shift and disarrayed remote area logistics yard (DOD AIT, n.d.)

Providing in-transit visibility of assets lets the service member know the location of the needed material, supplies, or repair parts. In his book, Moving Mountains: Lessons in Leadership and Logistics from the Gulf War, Lieutenant General William “Gus” Pagonis, chief logistician to the gulf war commander (General Norman Schwarzkopf), noted that during Desert Shield/ Desert Storm, logisticians transported the equivalent of "the entire population of Alaska, along with their personal belongings, to the other side of the world, on short notice." Being able to see this materiel as it is moving in the distribution pipeline is critical information enabling the operational commander to make the proper, informed decision.

During the Gulf War, the DOD logistician wasn’t considered successful with in-transit

visibility. The truly large numbers of commodities coming from tremendous numbers of supply

7 sources, hindered the logistician to know the status of his requisition and its subsequent onward movement. The lessons learned from Desert Shield / Desert Storm tell us tens of thousands of seavan containers and hundreds of thousands of US Air Force pallets arrived with missing or damaged shipping documentation, making it literally impossible to determine the shipments consignee and ultimate destination. Figure 1 above is the result of not having the in-transit visibility, causing many cargo shipments to become frustrated.

Why did Radio Frequency Identification technology become important to the DOD? Implementing the RFID technology provides a powerful potential to the enhancement of using automated information systems to see the last location of the unit´s asset. Although the RFID system only reports the last position the tagged shipping unit was interrogated by some reader, meaning it isn´t a real-time reporting system, it does establish confidence the unit asset is on-the-way. This in-transit visibility helps overcome the tendency to requisition and re-requisition the required asset. This was a large problem identified in the lessons learned from Desert Shield / Desert Storm. A problem which cost the US taxpayer an estimated hundreds of millions of dollars.

To prove the effectiveness of the RFID technology, in 1998, the DOD Logistics AIT Office assisted AIT lead organizations in implementing logistics AIT operational prototype scenarios in Europe, managing the DOD RFID architecture, identifying a mission-effective and cost-efficient suite of AIT capabilities, and directing and executing implementation. The prototype comprised four scenarios: Unit Movement, Commercial Seavan Movement, Air Movement, and Ammunition Movement. The AIT Office evaluated these activities in two reports: Evaluation of the Logistics Automatic Identification Technology (AIT) Operational Prototype (March 1999), and Resolute Ordnance Movement Evaluation (May 2001) (DOD AIT, n.d.).

In 1999, the AIT Office assisted in developing an AIT infrastructure in the Pacific theater for Exercise Foal Eagle, to deploy forces from multiple areas in the continental United States and overseas in defense of the Republic of Korea. The Office provided program management support and evaluated AIT efficiencies for tracking unit deployment and logistics sustainment activities. The report, Evaluation of US Pacific Command Automatic Identification Technology (AIT) During FOAL EAGLE 99, was published in April 2000. During 2000 and 2001, the AIT backbone was expanded to support the USCENTCOM and USSOUTHCOM areas of responsibility. The DOD Logistics AIT Office assisted USSOUTHCOM and NAVICP in coordinating the use of RFID tags to track Plan Colombia counter-drug supplies and equipment (DOD AIT, n.d.).

Over a decade later, Operation Iraqi Freedom and the mass deployment of troops and equipment to the same sandbox recreated the in-transit visibility challenge in a remote environment. The following illustration demonstrates the main supply routes in Iraq, supporting the Logistics Support Areas (LSA) and Forward Logistics Bases (FLB).

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Fig 2. Illustration of why ITV is important to the warfighter (DOD AIT, n.d.)

The yellow dots connected by the light blue arrows follow along the highway network, otherwise known as the main supply route. When the commodities arrive (typically at Kuwait City), they are taken off the ship, and the installed fixed interrogator “pings” or reads the active RFID tag by emitting a low power signal to which the tag responds. The tag sends only its serial number. This serial number is combined with the latitude and longitude information associated with the interrogator (registered within the main database server) and the computer’s clock, or time information. The serial number, location info, and time stamp are sent to the main database via the established communication network, and the server’s main database is updated (see figure 3).

The updated information in the database is visible via asset visibility web-based software

the war fighting logistician uses. The logistician prepares asset visibility reports, which are used to inform the Commander, and his operational staff of what assets are where. The operational staff can then use this information to plan operations using the requisite assets.

For the AIT to enable the Automated Information Systems (AIS), world-wide standards must be established and followed. This is currently the supreme challenge facing the Supply

9 Integration Chain efforts. Not only are the DOD Services and Defense Agencies involved, so are our NATO partners and other coalition forces. Leading the way, the DOD AIT Policy, dated 30 July 2004, mandated the development of plans and use of active and passive RFID tags and established deadlines to implement the policy.

Automatic Identification Technology (AIT) is the basic building block in the Defense Department's efforts to provide timely asset visibility in the logistics pipeline, whether in-process, in-storage, or in-transit. AIT media includes barcodes, radio frequency ID, satellite tracking systems, smart cards/CAC, optical memory cards, and contact memory buttons. By enabling data collection and transmission to automated information systems (AISs), AIT provides the warfighter with the capability to track, document, and control the deployment of personnel and materiel. What are the main uses of RFID within the DOD? In accordance with the DOD RFID Policy dated 30 July 2004, shipments traveling outside the continental United States (OCONUS), primarily US Air Force pallets and seavan containers, will have active RFID tags affixed to them. The active RFID tags will have sufficient content level detail written to them enabling prompt identification of the consignor, consignee, and the shipping units´ contents.

Fig 3. Global RFID architecture (U`R ITV, Nov 04).

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The previous illustration depicts the global architecture supporting this policy´s mandate. It’s the higher level overview of how the RFID infrastructure supports the DOD RFID Policy’s mandates. The icons representing read and write sites are major players in the infrastructure because these are the data entry and data capture points. This is where the content level detail is entered (write sites) and the in-transit visibility is captured (read sites).

The strategy calls for taking maximum advantage of the inherent life-cycle asset management efficiencies that can be realized with integration of RFID throughout DoD. Leveraging this technology to improve our ability to get the customer the right materiel, at the right time, and in the right condition is a critical part of our End-to-End Warfighter Support initiative (SCI, 2006).

In development of the RFID policy, between 1998 and 2000, DOD Logistics AIT Office activities resulted in an increase in the number of AIT-enabled sites from 12 to more than 500. With worldwide AIT implementation efforts well underway, the AIT Office is refocusing the DOD AIT program vision to incorporate AIT across the supply chain, including acquisition, maintenance, and disposal/reutilization activities. In this connection, the DOD AIT staff is responsible for preparing AIT policy for DOD and ensuring its inclusion in appropriate DOD regulations. In March 2000, the Under Secretary of Defense for Acquisition and Technology approved the DOD Implementation Plan for Logistics Automatic Identification Technology proposed by the DOD Logistics AIT Office. The plan provides overarching guidance and direction to the combatant commands, Military Services, and Defense Agencies for fielding and employing the suite of AIT across logistics applications.

One important use of the technology was developing a Foreign Military Sales (FMS) Prototype. At the request of DLA (J-34) in 2001, the DOD Logistics AIT Office took the lead in developing an FMS Prototype for an AIT-enabled AIS to automate business processes at Saudi freight forwarder sites in Berkley Heights, New Jersey and Wilmington, North Carolina. Once completed, the prototype automatically captured source data and transactions for Government-provided materiel, thereby reducing FMS-related supply deficiency reports (DOD AIT, n.d.).

Today, the United Kingdom has totally committed to the RFID technology. Through arrangements with the DOD lead agency for RFID infrastructure contract management, the US Army´s PM-JAIT office, the UK has invested heavily and shares the DOD RFID architecture. Prior to end of calendar year 2006, the UK will have its own RFID architecture, with potential interfacing with the US architecture.

Another important use is the incorporation of the technology with the ITV System of Record. To take advantage of this automated data capture of in-transit visibility information, the DOD has established the AIS of record, US Transportation Command´s (USTRANSCOM) Global Transportation Network (GTN). GTN gives its customers located anywhere in the world a seamless, near-real-time capability to access – and employ – transportation and deployment information. GTN is an automated command and control information system that supports the family of transportation users and providers, both DOD and commercial, by providing an

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integrated system of in-transit visibility information and command and control capabilities (GTN n.d.).

Another USTRANSCOM managed AIS is the Single Mobility System. SMS is a web-based computer system that provides visibility of air, sea, and land transportation assets and provides aggregated reporting of cargo and passenger movements (SMS 2006). This is a similar system to GTN, but focuses more upon air movements, the corresponding passengers and air cargo.

Also, the Project Manager – Joint Automated Identification Technology, the office responsible to administer the DOD RFID technology contracts, maintains a low bandwidth web portal for queries into the RFID tag database. While this is not the in-transit visibility system of record (GTN is), it provides a viable alternative to the warfighter deployed to an austere location with minimal system access and communications. The below picture is a screen capture of the RF-ITV Tracking Portal.

Fig 4, RF-ITV Tracking Portal FR-ITV (n.d.).

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DOD´s main use of RFID technology is perhaps best summed by the following; “Our challenge as logisticians is to get good data to the automated information systems,” said General Paul Kern, commander of the Army Materiel Command (AMC). “This is where automatic identification technology comes in. It enhances asset visibility by facilitating source data collection, improving data accuracy and reducing logistics processing times.”

Coordinating DOD Logistics AIT Standards.

Because the use of AIT crosses Combatant Commands, Agencies, Services, and industry boundaries, there is a critical need for consistent use of ANSI, ISO, UCC, and EAN standards (DOD AIT, n.d). The adoption of RFID tracking is in the headlines almost daily due to mandates from major market influencers such as the U.S. Department of Defense and Wal-Mart (CompTIA, Jun 06). Organizations such as the Computing Technology Industrial Association lend considerable expertise to the development of the voluntary standards facilitated and developed by the above mentioned non-governmental standards agencies.

RFID systems present a unique technical and policy challenge because they allow data to be collected inconspicuously, remotely, and by unknown, unauthorized, or unintended entities. RFID technology, deployments, and uses continue to be developing and evolving (IEEE Feb 06). The DOD AIT staff coordinates AIT standards for all of DOD by participating on industry, ISO, and NATO standards committees. This allows DOD to capitalize on the growing body of commercial AIT standards, culminating in the Defense Department's formal adoption of ISO standards for data syntax and semantics. To date, the Under-Secretary of Defense (Acquisition & Technology) has approved ISO standards for high capacity AIT media, including 2-D barcodes, RFID tags, optical memory cards, and touch buttons. The picture below gives examples of an active and several passive tags, describing their standards.

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Fig 4, Active and passive tags, examples of what they look like, their use and operational frequencies (DOD AIT, n.d.)

The North Atlantic Treaty Organization (NATO) has approved Standardization Agreement (STANAG) 2233, the draft agreement for consignment and asset tracking using RFID (Frontline, Aug 05). The DOD Joint Staff is working with the Defense Logistics Agency AIT Office and the Allied Transformation Command to facilitate multi-national sharing of the global interrogator infrastructure. This novel concept intends for any participating nation interrogator to read any RF tag (regardless of national ownership) and pass the read information to the tag owner´s RFID server, without registering any of the RF tag´s information. This concept will save much time, effort and resources for all participants and has the potential to greatly enhance in-transit visibility of RF tagged assets.

Security and Information Assurance Impacts. Department of Defense Instruction 8500.2, Feb 03, states that systems using information technology must, ¨Ensure that access to all DoD information systems and to specified types of information (e.g., intelligence, proprietary) under their purview is granted only on a need-to-know basis according to DoD Directive 8500.1 (reference (a)), and that all personnel having access are appropriately cleared or qualified under the provisions of DoD 5200.2-R (DoDI 8500, 2003).

14 This means the RFID infrastructure previously referred to in this chapter, and whose architecture is depicted in figure 3, must comply with the provisions of DoDI 5200.2. The instruction dictates the requirements for the servers, interfaces, AIS´, and the user access.

There is a certification and accreditation process each system of record and its associated equipment must obtain. This is granted in the form of an Authority to Operate. While there are too many authorization documentations to list, a few of the DOD´s RFID infrastructure relevant authorities are listed below:

- RFID is an existing, already fielded, accredited Automated Information System (AIS)

and should be registered in the AITR database (RFID Networthiness, 2004). - The RF’ITV production hardware facility, identified as the Area Processing Center

(APC) Continuity of Operations Site-S, meets requirements in term of physical security, power, temperature, humidity controls and network routing, and is located at a HQW USAREUR certified facility at the Kilbourne Kaserne, Germany (ATO for Europe, 2005). - In accordance with the authority provided by the reference, the Interoperability Test Panel (ITP) reviewed and concurred with your request for an Interim Certificate to Operate (ICTO) the Radio Frequency In-Transit Visibility (RF-ITV) Version 1.01 (STP Sys# 2565). The ITP bases the concurrence upon RF-ITV Ver 1.01’s compliance with interface standards (ICTO 2006).

In addition, note the United Kingdom´s participation in the US DOD RFID infrastructure required special consideration on top of the requirements mentioned above. Headquarters, European Command, Designated Approval Authority (DAA), granted approval for UK personnel to access their RF tag data through USAREUR RF ITV server on 31 January 2003. Due to the sensitivity of the document, no reference is given for general public consideration.

15 Benefits, and Their Cost. This section serves to answer the questions relative to the RFID program benefit and associated costs. While some facts and figures are declared, the reader is asked to understand the non-profit nature of the DOD and its fiscal accounting system report stark numbers, but do not necessarily reflect the tangible or intangible value obtained. Tangible benefits for the DOD´s implementation of the RFID program include improved asset visibility, enhanced shipment processing timeliness and accuracy, plus increased reliability in the vendor payment system. Business applications using RFID such as transport and logistics, access control, real time location, supply chain management, manufacturing and processing, agriculture, medicine and pharmaceuticals, are expected to grow strongly. But RFID devices will also influence Government (e.g. e-Government, national defense and security)…”(RFID 54, 2004). Ms. Kathy Smith, Special Assistant to the DOD Supply Chain Integration Office, stated, ¨…RFID systems will provide better information about what was delivered and when.” (Roberti, 2004). The DOD also plans to amend the vendor contracts’ electronic data interchange (EDI) requirements in order to ensure that the advance shipping notices (ASNs) it receives can handle RFID serial numbers. Suppliers will read a case’s RFID tag as they place the case on a pallet and associate the case’s tag with the pallet’s tag. That data will then be forwarded to the DOD, so it can match information in the ASN with what's received at its facilities. "ASNs are critical to our success," Smith said. "That's where we turn data into knowledge." Additionally, data quality reporting is enhanced by the use of the RFID server and its database. Since the data is entered into the system at one source level, checked for errors, and then uploaded to the ITV server once any data errors have been corrected, data quality is enhanced. Combine this with PM-JAIT´s information report output, the warfighter has trustworthy information quickly available. From the PM-JAIT February 2006 Newsletter, “…there are now four new data quality reports available on the National ITV Server for your use. These new data quality reports will make doing your own analysis quicker and easier. These reports will consolidate the query information in just one click of the mouse rather than having to search for and pull the data manually.” (ITV Services, 2006). Inventory levels have been greatly reduced. An article posted to the RFID Journal states, “Implementing RFID in the Marine supply chain has cut inventory value in the chain from $127 million to $70 million.” The reason for this reduction is largely due to the Marines’ discipline to not re-order the same item again, simply because it has yet to arrive. "Because they have confidence [that] items are on the way, they don't reorder," explained Mr. Alan Estevez, Deputy Manager, Assistant Deputy Undersecretary of Defense for Supply Chain Integration. "Reordering takes up more inventory, more space on transportation and clogs the supply chain." (Collins, 2006). In the same article, Mr. Estevez goes on to describe the DOD intention to spend $50 million to implement RFID over the next six years. Considering the DOD expenditure on logistics over the same time period will be in the billions of dollars, savings could be significant

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when compared to the Marines´ example. Also, the Office of the Secretary of the Defense sponsored an internal government business case analysis showing minimum savings of $70 million, with optimistic estimates rising to as much as $1.7 billion, over the same fiscal years. "Either way, that's a significant payback to the American taxpayer, as well as greater payback in military operability," Estevez reported (Collins, 2006).

More difficult to measure is the payback because of the visibility of the information in the RFID servers´ database and its importance to logistics knowledge management. In 2001, Mr. Art Money, then the Pentagon´s Chief Information Officer wrote, "Advancing information and communications technologies offer DOD the opportunity to rethink how wars are fought," (Seffers, 2000). However, these advancements do have their costs.

The DOD continues to invest heavily into automated information systems to enable knowledge management from its automatic identification technologies like the active RFID described in this paper. Described in the US General Accounting Office, May 2004 report on DOD Business Systems Modernization, it is highlighted the DOD is spending billions but without proper fiscal restraint, calling it “uncontrolled spending” (GAO, 2004).

The report focuses upon the fiscal year 2004 and highlights many areas where DOD can improve. One of the main areas is in the consolidation of the systems to effectively provide a corporate business standard. Since the AIT devices such as RFID are enablers to these systems, it logically follows the RFID system is not as efficiently incorporated either.

This doesn´t mean to state the RFID system has no value. It is simply another DOD stove-piped business system. Although the PM-JAIT office manages the RFID technology contracts, Services may still procure this technology via different authorized methods. Although the DOD RFID Policy of July 2004 mandates the use of active RFID tags for OCONUS shipments, not all Services and Agencies fully comply.

Another potentially disturbing aspect to the implementation of the active RFID program over the past decade has been the failure to re-use millions of active RFID tags. The DOD RFID Policy describes the requirement for the tags´ reuse, however, the Services and Agencies simply provide lip service to the policy. The report discusses the DOD´s efforts to gain the benefits described above and specifically focuses upon the active RFID tags, costing approximately $100 at the time of the report.

GAO report number 06-366R, Defense Logistics, the Results in Brief paragraph states, “DOD’s use of active RFID tags can be more efficiently managed, potentially avoiding millions of dollars in unnecessary tag purchases” (GAO tags, 2006). The same paragraph goes on to describe statistics to support the statement. The main point of the report is of the over 4 million tags purchased since the inception of the DOD active RFID program, less than 10% are reused. This is a costly error and the DOD can surely improve its efficiency in this area of the RFID program.

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CHAPTER III

SUMMARY

Considerable effort – manpower, time, resources and tax-payers dollars have been expended to implement the DOD RFID program. This paper considered several basic questions concerning the program, and provided answers to them providing a sound foundation to understand the program’s value.

The first question addressed what stimulated DOD´s interest in the program. The senior

level organizations, Office of the Secretary of Defense (Acquisition and Technology), Pentagon Joint Staff, Defense Logistics Agency headquarters staff, and many others, combined to develop the operational concepts and subsequent implementation plans for the Services to execute.

Next came the question of why did the Radio Frequency Identification technology

become important to the DOD? The answers came largely related to the Automatic Identification Technology (AIT) as the basic building block in the Defense Department's efforts to provide timely asset visibility in the logistics pipeline. While total asset visibility considers assets in wholesale and resale storage, the RFID technology became important for the in-transit visibility portion of total asset visibility.

The third question, “what are the main uses of RFID within the DOD?” received

considerable response. The responses included taking maximum advantage of the inherent life-cycle asset management efficiencies, incorporate the technology across the supply chain, and integrate the automated data capture capabilities into the automatic information systems of record. Those systems of record include the Global Transportation Network, Single Mobility System portal as well as the PM-JAIT´s integrated ITV web portal. Also coupled with the main uses question is the consideration of standards development, both US and international, including the North Atlantic Treaty Organization members, as well as potential multi-national sharing of the global RFID interrogation infrastructure.

The paper combined the original, similar questions relative to how much the DOD RFID program cost, exploring the tangible and intangible benefits. The discussion demonstrated the tangible benefits to the supply chain integration, improved asset visibility, in-transit visibility, and the warfighter´s growing confidence in the systems´ ability to locate his asset. The GAO’s reports decisively portray DOD must improve its fiscal business processes and effectively invest the tax-payers dollar.

18 Overall, the answers obtained demonstrate the viability of DOD’s investment and the

expenditures in the DOD RFID program as a worthwhile endeavor. Becoming responsible stewards of Congressional authorized funds will be key as the RFID technology evolves into more capable information technologies in the future.

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REFERENCES Anderson, Frank (2006), Office of the Deputy Under Secretary of Defense (Acquisition Technology and Logistics), Knowledge Sharing System (AKSS). April 15, 2006. www.dau.mil/pubs/pm/pmpdf03/aksjf03.pdf Axcess Inc (2005), Track, Monitor & Protect People, Assets and Vehicles. May 14, 2006.

http://www.axcessinc.com/company_overview.php BTA (2006), Defense Business Transformation Agency. April 15, 2006.

http://www.defenselink.mil/dbt/products/architecture/BEA_3_1_March_2006/iwp/definitions2_term_400060.htm

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