DOD Redoubles Its Efforts to Lower Costs Via RFID

By Claire Swedberg

Paul Peters, the deputy assistant secretary of defense for supply chain integration, says his department is launching a second phase of RFID deployment, focused on reducing inventory and increasing efficiency.

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After a decade of conducting pilots to track the movements of supplies using active and passive radio frequency identification tags across multiple agencies, the U.S. Department of Defense (DOD) is entering phase two of its RFID deployment, with an eye toward adopting end-to-end solutions, according to Paul Peters, the deputy assistant secretary of defense for supply chain integration. These end-to-end solutions would allow greater visibility across the DOD’s supply chain, thereby reducing the risk of errors, enhancing safety and security, and lowering expenses through reductions in inventory and improved utilization of labor devoted to tracking items at each point along that supply chain.

That second phase will involve the use of RFID data integrated with the DOD’s existing enterprise resource planning (ERP) software, as well as certain legacy systems, providing the DOD with insight into business processes, and thus identifying areas in which efficiencies might be improved.


Paul Peters, the DOD’s deputy assistant secretary of defense for supply chain integration

Peters assumed his current position in January 2010, having previously served in key positions with the DOD’s Defense Logistic Agency (DLA) as the deputy director for logistics operations and readiness, deputy commander of the defense distribution command, director of the defense reutilization and marketing service, and business system modernization program manager. In these positions, he oversaw the delivery of a range of forward and reverse logistics services provided to combatant commands, military services, and other federal and state agencies around the world. He described the DOD’s new vision for phase two during his keynote address at RFID Journal LIVE! 2011, held this week in Orlando, Fla., as well as during an interview conducted with RFID Journal.

Over the past decade, Peters told conference attendees, his department has observed the success of multiple RFID pilots. “We’re very interested in their success and the insight it provides us,” he stated.

A reduction in federal budgets, Peters noted, will serve to encourage RFID adoption rather than inhibit it. The DOD’s logistics services cost $215 billion in fiscal year 2010, accounting for 30 percent of the DOD’s total budget, he added, and reducing costs in that area could thus provide a positive impact on spending. “With the demonstration of the business value of RFID,” he said, “I view this [budgetary constraints on the DOD] as an opportunity for the RFID industry.”

One pilot conducted during the past two years was managed by the DLA, which is currently in the process of deploying EPC Gen 2 passive ultrahigh-frequency (UHF) RFID tags to track the receipt of supplies at 26 DLA distribution depots, based on the results of testing the technology at one such depot (see Printer-Encoder Order Represents New DOD Milestone and DOD Grants ODIN $14.6 Million Contract). By reading the tags, Peters explained, the agency was able to increase productivity and reduce errors.

The U.S. Air Force‘s Automatic Identification Technology (AIT) program (see RFID Takes Hold in the U.S. Air Force) tested RFID tags on more than 12,000 assets, including nuclear weapons materials. By using RFID, the Air Force was able to reduce inventory labor by 60 percent.

The U.S. Marine Corps employed RFID tags to track containers destined for shipment, in order to manage the prepositioning of those containers (see U.S. Marines’ Blount Island Command Attaches Passive Tags to Containers). The system provided improved visibility regarding the locations of supplies, Peters said. U.S. Transportation Command (TRANSCOM) used an in-transit visibility solution employing active RFID and satellite technologies to provide intrusion detection of containers, and thereby reduce pilferage. According to Peters, the results of those pilots have convinced the DOD that the agency is now ready to enter phase two.

“Going forward, it’s time to take that home,” Peters said. “Our view is, Let’s achieve the benefit from end to end across the supply chain. It would be fair to say the research and development has laid a pretty good foundation over the next five years to accelerate and expand from individual pilots across the DOD supply chain.”

Beyond gaining experience from pilots, the department is also motivated to proceed into a new phase of RFID adoption due to advances in RFID technology; both active and passive tags have become less expensive, and readers have become more robust to operate in harsh environments. In addition, there has also been movement toward more open standards, Peters noted, “so greater interoperability will facilitate deployments that could reach across a supply chain and operate globally.”

The first step in the next phase, Peters told the audience, will involve educating the department’s leadership to understand the value of RFID. To that end, he said, the DOD will focus on addressing data integration from RFID read events throughout its supply chain, deploying an RFID system at multiple sites along the chain, and gaining data and return-on-investment (ROI) analysis. The department’s IT divisions will need to integrate RFID data with existing ERP information systems, to help various branches of the DOD utilize the technology to accomplish business analysis based on RFID-derived data.

In addition to sharing information across the DOD’s internal supply chain, as well as with the companies that provide the agency with supplies, and integrating that data with its ERP systems, Peters said the DOD will focus on educating the technology operators as to how the RFID system works, and the benefits it can provide.

RFID technology, Peters said, allows the DOD to do more without spending more.

Addressing RFID technology vendors, Peters stated, “As you continue to develop the technology, if you understand our environment and constraints we face, my invitation to you is to bring future trends of the technology to us and help us apply it.”