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Enabling the Supply Chain with RFID Technology

Alan EstevezAssistant Deputy Under Secretary of Defense (Supply Chain Integration)April 11, 2005

. . . if Christmas was a random event every 5 years

. . . if Wal-Mart's 3000+ stores moved

. . . if associates had to wear a different kind of vest

. . . if a Wal-Mart stockout meant that everyone inside the

store could die.

DoD would be like Wal-Mart…

“To win the global war on terror, the armed forces simply have to be more flexible, more agile, so that our forces can respond more quickly. ”

United States Secretary of Defense Donald Rumsfeld, March 6, 2003

Transformation is a Requirement

Operation Iraqi Freedom: a different kind of engagement

Cargo Volume by Operation

0500,000

1,000,0001,500,0002,000,0002,500,0003,000,0003,500,0004,000,000

Air Sea Total

Mode

Shor

t Ton

s

OIF

DESERT SHLD/STRM

OIF data through Jan 04

More of an emphasis on flow, less of an emphasis on inventory.

Theater Distribution Center

A lighter, more lethal force . . .

. . . with logistics challenges in forward areas.

A route sheet at the Theater Distribution

Center, a deployed

break bulk and cross dock operation.

5

Ad hoc In-theater Capabilities

Building a network while on the move

350 miles

200 m

iles

Pre-combat3 weeks later

Kuwait International Airport

Camps Arifjan, Fox, Doha, PA, Udari, NY, NJ, VA

Ash Shuwayk

Al Shuaybah

Navastar

Theater Distribution Center Al Jaber Airbase

Kuwaiti NavalBase

LSA Anaconda (Balad)

Baghdad InternationalAirport

LSA Adder,FLB Cedar

(Tallil)

Al Kut AB

LSA Diamondback

LSA Bushmaster LSA Viper

Approximate distancesWashington, DC to Chicago: 595 miles

London to Berlin: 600 milesKuwait City to Mosul: 700 miles

Our Response

• Synchronize Moves Across Global Chain

• Reform Joint Theater Distribution

• Take RFID to the Next Level

Why we need RFID…Why we need RFID…

Visibility is Critical to Effective Logistics Support

DoD RFID Goals

• Increase Warfighter/Customer Confidence in the Reliability of the DoD Supply Chain

• Improve Visibility of Information and Assets throughout the DoD Supply Chain

• Improve Process Efficiency of Shipping, Receiving and Inventory Management

• Reduce Cycle Time

RFID Scope/Standards

Active RFID – freight containers, air palletsSAVI 433 Mhz readersSAVI tagsDoD tag data formatsSuppliers rarely obligated to apply tags

Passive RFID – case & pallet (all items), item packaging (UID items)

EPC std UHF readers EPC Class 0 & 1 std tags

Migration to EPC UHF Generation 2 stdEPC and DoD tag data formatsSuppliers will be contractually obligated to apply tags

Global Standards Key to Success

• DoD adopted EPCglobal standards for passive RFID

• Leverages the marketplace

• Government and Commercial sectors on same standard

• Consistent standard anywhere the Department operates in the world

• Consistent standard with all suppliers

• Drive for consistent standards and interoperability with Allies

Passive RFID Implementation Plan for DoD Suppliers

Ship to Locations

60,000 DoD Manufacturers/Suppliers

DFAR – new and revised contracts

Classes of Supply

Level of Tagging

Classes of Supply:All Classes

Level of Tagging:Shipping Containers, Palletized Unit Loads, Exterior Containers,UID Item Unit Pack

Ship to locations: All Locations

January 1, 2007

Classes of Supply:II, VI, IX, I (PORs/MREs)

Level of Tagging:Shipping Containers, Palletized Unit

Loads, Exterior Containers

Ship to locations:San Joaquin, Susquehanna

January 1, 2005Classes of Supply:

Begin All Classes

Level of Tagging:Shipping Containers, Palletized Unit Loads, Exterior Containers

Ship to locations:Strategic CONUS DLA Depots, TRANSCOM Facilities & Service Maintenance Facilities

January 1, 2006

Key Operational Passive RFIDSites

• Distribution Centers at Susquehanna PA and San Joaquin CA

• Fleet and Industrial Supply Center Ocean Terminal in Norfolk VA

• 2nd Force Service Support Group at Camp Lejeune NC

• In progress….shipments between operating units in Iraq

Implementation Lessons Learned

• Business process changes required to capture real benefit and business value • RFID improved timeliness and accuracy of

receiving and shipping by 3%

• User training improved performance

• Technology is reliable• Read rates around 96%

• Equipment ready to use just 33 days after decision on technology

• Equipment operational 100% of the time

Two Major Requirements for SuppliersPassive Tagging at the case and pallet level in accordance with the Implementation PlanAdvance Ship Notice (ASN)

DFAR clause references the MIL-STD 129P (3) for implementation details

DefinitionsTag Data StandardsTag Placement Performance Requirements

Contractual Requirement

Education and Outreach

• Established plan for communicating with all DoD suppliers – November 2003 +• 3 Summits with Industry• 132 Conferences

• Established agreement with the Procurement Technical Assistance Center (PTAC) for additional education and training to suppliers• Launch Spring 2005• PTAC has over 93 centers in US• 235 counselors• Immediate access to 55,000 businesses.

• Developing online course module for DoD Logisticians

“I think the industry has sold itself on a program that offers so little return that it simply won’t be

worth the trouble and expense.”

A MidwesternGrocery Chain Executive

discussing the potential of the barcode in 1975*

Don’t get stuck in the box

*“Scanning Hits a Snag,” Progressive Grocer, December 1975, p. 47

For Your Information

• For further information that can assist you with compliance, 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)• Draft Wide Area Workflow (WAWF) Implementation Guides

(IG)• Frequently Asked Questions (FAQ)• Schedule of RFID Events where DoD RFID personnel will

be speaking• You can ask the team any RFID-related question through the

following email address: info@dodrfid.org