Visibility in the DOD Supply Chain
by Daniel W. Engels, Ph.D.; Robin Koh; Elaine M. Lai;
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
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
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
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
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
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
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.
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
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
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.
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.
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
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,
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,
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.
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
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
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
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.