Department of Defense Radio Frequency Identification (RFID)

Brad CougherOffice of the Under Secretary of Defense

Supply Chain Integration June 3, 2008

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Agenda

What is RFID?

DoD RFID Vision and Commitment

RFID Policy, Contractual Requirements and Compliance

Process Efficiencies Gained

RFID at the Item Level

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What Is RFID?

Radio Frequency IdentificationAn 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.

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The DoD RFID VisionThe DoD RFID Vision

Outcomes of Fully Automated Visibility & Management of Assets

Increased efficiency & accuracy — virtually instantaneous

Expedite transaction processing — No line of sight required

Enable “triggered” processes or automation — Receipt, in-check, manufacturing operations, alarms, etc.

Improve product visibility — “See” products, perhaps in real-time

Identify discrete levels — Track & trace and authentication

Provide first-class, knowledge-enabled logistics support toProvide first-class, knowledge-enabled logistics support to the warfighter by improving process efficiencies. the warfighter by improving process efficiencies.

RFID is a tool to obtain the benefits of Knowledge-Enabled Logistics Support

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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

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RFID Implementations will Enable Supply Chain Shipping and Receiving Process Efficiencies

Work with DoD Suppliers Work with DoD Services/Agencies

Manufacturers/Suppliers

Transportation/Supply Depots

Port of Embarkation /Debarkation

Distribution Centers/Depots

Customers

DoD’s passive RFID initiative is a coordinated effort with two parts.

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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 Supplier’s 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

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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/supplierguide.htm.

Passive RFID Contractual RequirementsRemain Constant

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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 DLA’s active supplier base.

DLA is communicating with suppliers on non-compliant shipments.

Application of Passive RFID Clause Continues to Grow

August 2007 through January 2008

Suppliers Tagged Materiel

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Identifying Process Improvements Using RFID

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Identifying Process Efficiencies using Passive RFID

Continuous Process Improvement (CPI)

Root cause analysis

Issue Identification

Accurate measurement

RFID Middle-

ware

Actual Movement of Materiel

System Transaction

We need to understand this gap

Identify issues with the process between these two points

Logistics System

Passive RFID provides a new data point — revealing actual materiel movement more discretely for the first time.

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RFID Middle-

ware

RFID Middle-

ware

RFID Middle-

ware

Retail Logistics

System

Logistics System

Logistics System

New RFID Data Point Provides Additional Insight within Response Time Segments

ArrivalReceipt

TransactionDeparture

Shipment Transaction

DepartureShipment

Transaction

Storage Depot Time Transportation / Theater Time

Distribution Depot Retail FacilityTrans-shipment Point

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RFID Reveals Potential Areas for Improvement at Container Consolidation Point

RFID Middle-

ware

Logistics System

Materiel loaded onto the truck trailer

System transaction indicating truck departure

Transportation Time

The average time to build a container load at the CCP was over 3 days

In-transit to the Customer

Average = 3.33 days

The average time to build a container was variable

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RFID Reveals Potential Areas for Improvement at Retail Sites

RFID Middle-

ware

Retail Logistics

System

Actual Arrival of Materiel (Visibility Transaction)

System Receipt Transaction

The new data makes this process visible for analysis.

Transportation Time

Site A had an average receipt posting of 0.3 days. Site B had an average receipt posting of 8.5 days.

Opportunity: Reduce receipt take-up time

Business Benefits: Materiel to the customer more quickly, Increased throughput

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RFID Reveals Precise Materiel Movement, Enabling Lean Six Sigma Process Analysis

TDD Target

* 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.

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Storage Depot Time Transportation / Theater Time

ArrivalReceipt

TransactionDeparture

Shipment Transaction

DepartureShipment

Transaction

Potential Improvements Will Have Cumulative Effect across the DoD Supply Chain

1-day improvement* 2-day improvement* 8-day improvement*

11-day improvement*

*days improvement are examples only

Trans-shipment PointDistribution Depot Retail Facility

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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.

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Using RFID at the Item Level

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2D Data Matrix

RFID Tag

Item Identification using the 2D Data Matrix

2D Data Matrix part mark is still required

Item Identification using RFID

Aerospace Community Has Expressed Interest in Using RFID as an Additional Technology for Item Identification

The UID policy is not changing to include RFID

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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@dodrfid.org

For Your Information