Improving Visibility in the DOD Supply Chain
by Daniel W. Engels, Ph.D.; Robin Koh; Elaine M. Lai;
and Edmund W. Schuster
To ensure the readiness of the U.S. military to fight and win in any conflict, the Department of Defense (DOD) maintains an inventory of supplies and equipment valued at more than $80.5 billion. Managing this inventory is difficult because the various military services and organizations within DOD use different automated supply systems.

Joint Vision 2020, which guides the transformation of the Armed Forces begun in Joint Vision 2010, recognizes the increasingly important role of logistics in modern warfare. One of the operational concepts
of Joint Vision 2020—Focused Logistics—is defined as—

The ability to provide the joint force the right personnel, equipment, and supplies in the right place, at the right time, and in the right quantity, across the full range of military operations. This will be made possible through a real-time, web-based information system providing total asset visibility as part of a common relevant operational picture, effectively linking the operator and logistician across Services and support
agencies.

In an effort to help the military reach its focused logistics goals, the Massachusetts Institute of Technology’s Auto-ID Labs have developed, implemented, and tested a networked, physical-world electronic product code (EPC) system that enables the automatic identification (auto ID) and location of all objects in an inventory, thereby providing total asset visibility. Through individual item identification using the EPC, radio frequency identification (RFID) systems, and sophisticated data- and information-handling capabilities, auto-ID technology links physical objects to information accessible through the Internet or a secured Intranet. The EPC enables unique identification of every item, aggregation, and grouping and acts as a pointer to networked information about its associated object. With the Auto-ID Labs’ EPC system, complete, real-time inventory visibility is possible.

The EPC system is being adopted as a standard in the commercial sector and could be applicable to the military as well. A military-commercial interface would allow all military suppliers to use the same standardized system to identify objects. Use of the EPC system would help improve the U.S. military’s readiness for war by providing DOD with unprecedented visibility and control of the supply chain.

DOD Supply Chain

In many ways, the DOD supply chain is similar to the supply chains of commercial suppliers because many of the products and supplies contained within the DOD supply chain are also available commercially. However, differences in optimization criteria lead to a number of characteristics that set the DOD supply chain apart from the commercial supply chain. Some of the most important of these differentiating characteristics follow.

Readiness. The primary purpose of optimizing the military supply chain is to enhance readiness for war. Knowing the location and status of all materials needed to support operations is an essential component of readiness.

Long supply lines. War is an international activity, which means that lines of supply to support operations are long. Without auto-ID technology that provides real-time visibility of items moving from the suppliers to the front-line troops, it is extremely difficult to maintain accurate knowledge of supply-chain-wide inventories.

Variety of items. Military operations require a large number of items, ranging from everyday supplies to food and clothing to specialized equipment. Different categories of items have different standards for inventory accuracy and visibility.

Unstable demand. Military demand is often variable and unpredictable because conflicts can happen anywhere in the world at any time. When a conflict occurs, demand for supplies increases dramatically and existing stockpiles of materiel are depleted quickly. Accurate inventories are critical to maintaining readiness in the presence of variable demand.

Moving end points. The end, or destination, points of the military supply chain generally move forward with advancing troops and are either terminated or transformed, creating additional difficulties for transportation and inventory management.

Priority. The military supply chain operates on priorities set by unit commanders based on urgency of need.

Equipment reliability and maintenance. Military operations take place in all types of environments and on all kinds of terrain. Under battle conditions, it is important that all identification technologies work effectively and that system maintenance is minimal.

Detection. In a theater of operations, the military must always be careful not to divulge information about its position that would be advantageous to the enemy.

The problems that have resulted in the past from these characteristics of the DOD supply chain often were exacerbated by poor inventory visibility. The use of auto-ID systems that are customized to accommodate the peculiar aspects of the DOD supply chain can significantly reduce the recurrence of these problems.

Inventory Management

Recent analyses have found that faulty inventory records often result in miscalculated order quantities. In addition, shipping delays create uncertain transit times. Faced with poor supply chain visibility, military planners have no choice but to over-order in an attempt to compensate for uncertainty. This leads to invalid priorities, excess inventory, and bottlenecks in transportation. Accurate, real-time inventory management throughout the supply chain would improve visibility and reduce over-ordering.

Repair and Maintenance

Any large-scale repair operation is complex because it is difficult to predict demand for spare parts. In military repair operations, expensive parts are given high priority and customer wait time is usually very short. However, inexpensive parts are often critical to completing a repair. These parts are usually assigned a lower priority, which often causes them to be delayed in shipment. In turn, this causes delays in the entire repair cycle. Military planners often increase the total fleet size to compensate for lengthy repair times.
An RFID tag is attached to a pallet of sodas. Electromagnetic energy transmitted by a reader activates the integrated circuit on the tag. Once activated, the tag transmits a signal that, in turn, is received by the reader. (Photo courtesy of Auto-ID Labs.)
 

Readiness and Mobility

Combat forces must be ready to engage in a conflict, and they must be able to move to the conflict location quickly. Troop readiness is determined in part by equipment readiness, and equipment readiness hinges on proper repair and maintenance.
Mobility is determined primarily by the quantity of materiel that must be moved and the number of transport vehicles available to carry it. In general, the smaller the inventory required to travel with a force, the greater its mobility. Accurate data on inventory quantities and locations enables logistics support systems to transport a greater quantity of items, thereby reducing the inventory of forward-positioned troops while increasing their mobility.

Tracking

The lack of a single, standardized auto-ID system severely limits the tracking of assets as they move through the supply chain from the supplier to the troops. Similarly, the visibility of objects flowing back through the supply chain is limited. The inability to track individual items negatively affects all supply-chain-related applications, including repair and maintenance, identification of failure-prone parts, and the ability to perform predictive maintenance.

System Improvement

In response to recognized problems with asset visibility throughout the military services, DOD has made significant investments in research and development of RFID systems that will improve security, cargo visibility, hazardous materials (HAZMAT) recognition, product tracking, and quality control.

Security. Automatic Vehicle Identification (AVI) is a project to enhance security at access-control points. The Army has hired Transcore, Inc., to test access control at Fort Monmouth, New Jersey, using passive, ultra-high-frequency (UHF) “eGo” wireless RFID tags.

Testing of eGo tags began in November 2002 and is still in progress. Vehicles with proper security clearances are equipped with eGo tags on their windshields. As vehicles approach the entrance to the fort, they encounter a simple tilt-arm gate. An RFID reader scans the eGo tag, and the gate opens. The car then proceeds to a common access reader, where the driver is identified using established, non-RFID procedures.
Technology used for this test includes the thin eGo windshield tag and the eGo 2210 reader. The tag has 1,024 bits of memory, is tamper resistant, and can withstand extreme temperatures, sunlight, humidity, and vibration. Approximate cost of the tag is $10.

Cargo visibility. DOD and Savi Technology are partnering on two projects, Smart and Secure Tradelines (SST) and Total Asset Visibility (TAV). With SST, tags are placed on shipping containers before they are shipped. The tags record any activity during transit, such as nonconformance to security measures, and make this information available on arrival of the containers at a port. The tags also include detailed information on what is inside the containers.

TAV was created by Savi Technology to track cargo containers and record their location at any time during transit. The system is based on Savi’s Universal Data Appliance Protocol, which allows integration of devices such as RFID and global positioning systems.

HAZMAT recognition. The Defense Logistics Agency has organized a test of Advanced HAZMAT Rapid Identification, Sorting, and Tracking (AHRIST). Currently, no system exists to alert receiving personnel automatically before HAZMAT arrives. The objective of the AHRIST project is to track HAZMAT through the supply chain. The Micron Technologies tags used in the test have a read range of 10 feet in North and South America and 128 bits of storage.

Product tracking. DOD is working with several companies on materiel-tracking applications. In 1999, Symbol Technologies was awarded a 5-year, $248 million contract for auto ID technologies and services. Projects under this contract include tracking of materiel and personnel deployed throughout the world, tracking of supplies through global distribution centers, and advance identification of military personnel. The tracking system uses NATO (North Atlantic Treaty Organization) stock numbers and can distinctly identify 1.8 million line items. The computer system interface uses the IBM ES9000 Series mainframe to run Mincom’s Management Information System. The system tracks goods received, performs spot-checks, and notes other factors such as batch number, shelf life, expiration date, and reparable or nonreparable designation.

Quality control. Quality control of meals, ready to eat (MREs), is currently being tested at the Army Soldier Systems Center at Natick, Massachusetts. Hardware and tags developed by Savi Technologies are used to inventory containers of MREs at supply points. Low-cost passive and semipassive RFID tags developed by Alien Technology are being used to identify MRE cases and pallets. This project relies on the MIT Auto-ID Labs’ technology to track shelf life and the environmental conditions (temperature, humidity, and vibration) under which MREs are stored.

How Auto ID and DOD Come Together

The most important element missing from current DOD testing of RFID systems is standardization. A standard system for auto ID across DOD will facilitate inventory management and related applications, thereby creating increased readiness at a reduced cost. DOD could save billions of dollars by adopting a standard system.
Several possibilities exist for joint research between MIT’s Auto-ID Labs and DOD, using the current open standards that are being administered by the Uniform Commercial Code Council.
Tracking. By using mass serialization and the Office of NATO Standardization database, the EPC system will allow for real-time tracking of supplies with a single technology. A standardized inventory management system will give visibility of the location of spare and repair parts. Maintenance and repair then will be more efficient, and applications such as predictive maintenance will be possible.
Product identification. The EPC is a unique identifier that points to a database holding all information about an item. The current universal product code holds only limited information about a product and its manufacturer. With the EPC system, military planners anywhere along the supply chain will be able to access detailed information, including suppliers of each component of the item, transportation methods, and environmental storage conditions for the item throughout its lifetime. With more information about an item, military planners will be able to make better decisions.

Military-civilian interface. By using the same standard as industry, DOD will be able to communicate with commercial vendors and have direct visibility of inventories at civilian locations. An active military-civilian interface also will give vendors and military planners the opportunity to collaborate on ways to enhance readiness for war. Precise inventory levels by version will be possible with the EPC system. (A part number is not unique because a new number is not assigned each time an engineering change is made. Therefore, an inventory of spare parts for equipment that has a long life cycle often includes many different versions of a part as changes are made over the life of the equipment.) Civilian warehouses will be able to assist the military in stockpiling enough supplies to sustain several simultaneous war scenarios. This could take the form of maintaining “warm” inventories that are reserved for military operations, yet continue to cycle into normal shipments. This practice would reduce losses resulting from exceeding shelf-life limits. Using inventory pooling between civilian and military organizations would significantly reduce waste and improve readiness.

Predictive maintenance. The military currently employs a preventive maintenance policy for complex equipment. This means that regularly scheduled overhauls take expensive weapon systems out of operation for long periods of time. This policy is not efficient. With the serialization capability of the EPC, the history of every service part can be stored in a database. The history is a vital piece of information in predicting failure. Rather than scheduling overhauls on a periodic basis, maintenance could take place when a military planner sees that a part is likely to fail. Service parts could be pre-ordered. Instead of ordering a larger, more expensive system part, such as an aircraft engine, component parts that are likely to fail, such as water pumps, could be identified and stocked. Vehicles would operate at their maximum efficiency, which would reduce total life-cycle costs.

Budgeting. The real-time inventory information provided by the EPC system would improve budgetary decisionmaking. Current budgetary decisions are sometimes based on faulty information about inventory levels and troop readiness. The EPC system would reduce uncertainty caused by counting or timing errors in the information used for budgetary purposes.

The chart on the opposite pape provides a summary of specific RFID possibilities. Boxes marked “RFID” suggest that identification tags would improve efficiency in that area. Boxes marked “Auto ID” indicate areas in which the networked EPC system would be substantially more beneficial than a proprietary RFID system. The boxes marked “Being tested” indicate that RFID technology is currently being used or tested.
More and more, success in warfare depends on accurate information on the identity and location of parts and systems. This is true not only for battlefield operations but also for the support functions that must get supplies to the right place at the right time. In the future, DOD will be expected to enhance readiness for war while minimizing procurement costs. The Auto-ID Labs’ EPC system technology will play an important role in this enhancement by providing open standards for both DOD and industry while creating unprecedented total supply chain visibility. ALOG

Daniel W. Engels is the Research Director/Executive Director of the Auto-ID Labs at the Massachusetts Institute of Technology (MIT). He has a B.S. degree in electrical engineering and computer science from the University at Buffalo, an M.S. degree in electrical engineering and computer science from the University of California at Berkeley, and a Ph.D. in electrical engineering and computer science from MIT.

Robin Koh is researching the application of electronic product code technology to various supply chains at the Auto-ID Labs at MIT. He has a B.S. degree in industrial engineering and operations research from the University of Massachusetts at Amherst, an M.B.A. degree from the Tuck School of Business at Dartmouth College in New Hampshire; and a Master of Engineering degree in Logistics from MIT.
Elaine M. Lai is conducting research at the Berkeley Manufacturing Institute as a part of the M.S.-Ph.D. program in Mechanical Engineering at the University of California at Berkeley. She has a bachelor’s degree in mechanical engineering from MIT.

Edmund W. Schuster is the former Director of the Affiliates Program in Logistics at MIT and currently is working on special projects with the Auto-ID Labs. He has a B.S. degree from Ohio State University and an M.P.A. degree from Gannon University in Pennsylvania.

The authors wish to thank the staff of the Defense Logistics Agency and the Army Soldier Systems Center for their assistance in the preparation of this article.