The Department of Defense alone owns over $3 trillion worth of assets (property and equipment). What do assets have to do with debt and spending? Let’s start with the obvious: both are expensive, so expensive that huge organizations are dedicated to following stringent rules for acquisition.

But acquisition is only the beginning. What about the cost of owning stockpiles of property and equipment that can’t be found or “hidden” assets that are owned but unrecorded and therefore unknown? Waste is enormously expensive, but so is the cost of managing, tracking and maintaining assets throughout their lifecycle. More equipment = higher cost, a virtual mountain of cost as we are coming to understand.

There are two options that work hand-in-hand for reducing waste:

• Option 1 is to become more efficient at managing what is already owned.
• Option 2 is to reduce the number of duplicate, obsolete or unneeded assets that are already owned.

Would decreased stockpiles and found assets help with the DoD budget? We know there is a big pay-off to both options, because A2B performed marking and data cleansing services in one DoD organization that netted thousands of unknown “hidden” items worth many millions of dollars. When “hidden” assets are no longer hidden, the need for acquisition is diminished. Enormous efficiencies that reduce waste are the result when assets are properly tracked and maintained throughout their lifecycle. Those efficiencies range from the elimination of duplication to predictive maintenance to disposition.

Can we eliminate waste in federal budgets? Not likely, but IUID is the vehicle to dramatically decrease waste, and it is happening now.

Begin by counting the total number of assets within your organization. Include equipment, components that are swappable, tools, spares and materials. For the sake of argument let’s say that adds up to 20,000 items. Now, estimate the average value of those assets, balancing the quantity of low- and high-end consumables with assets. Again, for the sake of argument, let’s say that average value is $2,250.

Next, calculate the number of “hidden” assets – those you already own but don’t know you have. Unless you are using an auto ID-enabled (barcode or RFID) process, we can say with a high degree of certainty that your asset records are incomplete, inaccurate, or missing. This typically accounts for 45% of the total asset count, or, in our example, 9000 assets.

In addition, as many as 3% of the assets that are shown in your database or spreadsheet are missing, and another 8% of assets that are not in your records are actually within the walls of your organization. (It is very possible that as many as 70% of those assets that you don’t know you own are out of date or not usable.) We’ll focus on the remaining assets that could be put to use if you knew about them, 2.1% of the total or 420 items. If you knew the exact location, condition, and readiness of those, then that is 420 items you would NOT have to procure when they are needed, thereby adding $945,000 directly to your bottom line. If you only need 20% of these newly discovered assets on an annual basis, you have saved $189,000.

Instead it is presented as a cautionary for those who ignore business rules and best practices and go on to bake a nice IUID “failure pie.” Follow this recipe and you are sure to serve up many warm slices to your organization.

1. Ignore the big picture – the initial plan for failure
Pour in generous amounts of ignoring the big picture. In fact, don’t worry about the concept of IUID sustainment at all. As new items roll into your operations from subcontractors or suppliers, you won’t know if an IUID exists, and if it does exist, if it will scan to MIL STD 130. Que sera, sera.

2. Don’t bother with trying to leverage IUID, just slap it on the item willy-nilly and call it a day.
Mix in some slap it on and be done with it. Sure, you’d have to change your current information systems to support an IUID data element, but that just seems like extra work, so skip it.

3. Ignore the fact that some OEMs are getting it wrong causing you to receive bad IUIDs into your operation.
For best results, combine the ingredients above while ignoring OEMs and suppliers who produce erroneous labels. Maybe if you wait this thing out, it will just go away.

4. Manage it all with a spreadsheet.
This is my favorite ingredient so layer this on thickly. Isn’t a spreadsheet just as good as a database after all? It’s certainly easier to setup and to change the data. What the heck, just continue to run your entire operation on a spreadsheet; it’s worked since the 80′s, hasn’t it?

5. Keep your IT department out of it.
Finally, sprinkle on some leaving IT in the dark. I know that you’ve been waiting for an opportunity to contact your IT department. They’re always so helpful, why wouldn’t you want to involve them? Is it because they’ll double the length of your meetings and mire you in questions and roadblocks that keep you burning the midnight oil?

While this recipe is tongue-in-cheek (bad pun) it is used all too often and invariably results in a side helping of humble pie for the cook.

To get to the point of this blog post: Wi-Fi would have connected you to the servers that are displaying this page. However communication with the Internet or your network would be impossible without Wi-Fi standards, namely some form of IEEE Standard 802.11, which allows wireless communications to happen.

Now take your laptop down the street to Starbucks. You can connect instantly to their Wi-Fi network right? Go to the airport and try to connect. Again, you’ll connect instantly. Your computer doesn’t inconvenience you, asking each time for the correct network, because 802.11 standards take care of that.

The Department of Defense, easily the organization with the world’s largest logistics footprint, has many systems that must communicate with the ease of Wi-Fi to enable authorized employees to utilize current data to make accurate, timely and cost-effective decisions. The reasons for the use of IUID, an ISO standard for global asset identification which utilizes the 2-D Data Matrix machine-readable code, are no different from the Wi-Fi standard.

Like Wi-Fi, IUID will become a standard to track millions of assets that are scattered around the world. At the local level, we work with programs that absolutely need IUID to improve their operation. Customers see that very quickly, and once they see how it will benefit their operations, they realize that applying IUID only to items mandated by MIL STD 130 will compromise their mission. What they soon understand is that they should be labeling and marking ALL items, within reason, to leverage the power of IUID.

When isolated locations are not Wi-Fi enabled, the Internet is inaccessible – a momentary annoyance. When highly sensitive parts are required for a secret military mission, the inability to locate them quickly and cost-effectively is a much more serious matter. DoD needs total IUID capability, and it needs it now more than ever.

Earlier this week, however, the need for high-level readiness took on urgent meaning here at home, as millions of people along the East Coast and into the Midwest faced imminent danger in the form of one of the most destructive hurricanes of our generation – Hurricane Sandy.

First responders and National Guard units are deploying as we speak in an effort to save lives and manage devastating conditions.  Vehicles, helicopters and life support equipment are necessary for local personnel to execute their mission on a moment’s notice. All the while they are no doubt asking:  What do we have to support the mission? Is it ready to deploy? Will we get the results from using the equipment that we expect?

This storm has cast a spotlight on the need for maximum readiness in urgent circumstances right here at home, and readiness at that level can only be achieved through the tracking of critical assets.  Precision readiness calls for IUID or Item Unique Identification – the program used by the Department of Defense for this purpose.  As with so many things military, IUID calls for disciplined procedures. First there is the discipline of assigning a machine readable code such as an IUID or RFID tag. Discipline is also required in using mobile computers for scanning assets at each lifecycle event in order to track the location and condition of each asset. One could argue that the discipline required to maintain readiness is on a par with the discipline to practice life-saving maneuvers.

I liked the expanded thinking of keynote speaker Tom Miller of The Sage Group who made historical reference to disruptive change in the auto ID industry – changes such as pen-based computing, 2D imaging, and cloud services. I enjoyed looking back at the points in recent history when those innovations were introduced and the practical uses that have resulted from each.

I would add one perspective to Tom’s insights. It is often the combination of technologies that drive change, along with the way we leverage technology. The goal of A2B’s customer base is to leverage technology to produce highly accurate data, and auto ID is the means to that end. We’ll look back ten years from now and realize that it was the convergence of technologies that was the true innovation – what I often refer to as the “Force Multipliers.”

Mobile computing, ubiquitous 2D imaging, global data capture standards (UID via MIL STD 130, pRFID and MIL STD 129, UDI for medical devices), cloud-computing and much more will contribute to a powerful infrastructure that will enable massive organizations such as the FDA and Department of Defense to gain insights never before possible. The economic revolution that began with auto ID fifty years ago is rolling along and picking up steam.

Defense Federal Acquisition Regulation Supplement: Reporting of Government-Furnished Property (DFARS Case 2012-D001) ACTION: Final rule. Effective Date: August 29, 2012

DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to revise and standardize reporting requirements for government-furnished property.

The final rule alters the requirements of the current clause, which requires defense contractors to report (primarily) government-furnished equipment items valued at $5,000 or more, to a new requirement to report all serialized government-furnished property regardless of unit acquisition value. The revised reporting requirement includes electronic receipt requirements, which will be expanded to non-serialized items by 2014.

http://www.npma.org/Uploads/DFARS%202012-21059.pdf

Although some budget cuts are inevitable, there should not be an across-the-board “blood-letting”, a move that would be extremely short sighted. An investment in key management practices, such as IUID is essential.

I’ll digress for a moment, back to some Olympic history and the use of automatic ID (AIT) technology. During the summer Olympic games in Los Angeles, in 1984, tensions in the world were high. Keeping athletes safe and controlling spectator access were deemed a critical part of planning for Olympic organizers. Bar code technology had been adopted by numerous industries and, combined with an early form of unique identification, was chosen to solve that very important strategic problem. This AIT solution proved to be a huge success, significantly enabling the mission of the Olympic games.

Fast-forward to 2012 and sequestration: Applying item unique identification (IUID) to a government process as simple as inventory control will save money – period. Industry has proven the cost-saving benefits of inventory control for decades. Why should government be different?

IUID will show immediate return for programs with sparse budgets. Using it now will save money that may not be available if and when sequestration takes effect. Looking downstream it will set the stage for far more efficient control of DoD and government assets through the elimination of waste, duplication and loss. The time has come to act.  What AIT was able to accomplish for the 1984 Olympics is a small sample of what it can accomplish for government’s seemingly insurmountable budget woes.

We will be providing ongoing interpretation of the rule as we review it and organize our own comments and feedback for the FDA. The proposed rule can be found at www.regulations.gov.

A good summary of the rule can be reviewed at www.pmpnews.com.

On the morning of the big day, in the early, pre-newspaper delivery hours, a jog down the mall, between the Capitol and Washington Monument, eased the tension. Many others joined in this ritual, looking to have their own reasons for being out before breakfast.

By 10:00, most of the participating companies from the UID Suppliers Alliance had arrived in support of the event. We had five stations showcasing the use of IUID technology with another two areas describing the history of auto ID and its real world benefits: reduce costs while providing the best in readiness for the war fighter.

(Side note: This event was an amazing illustration of how business professionals, who often compete in the open market, can come together for a common purpose to orchestrate a well-organized message.  Everyone that participated from the UID Suppliers Alliance deserves immense credit for participating and supporting such a successful endeavor.)

By 10:30, demonstrations were humming along and dialog was in full-swing. Participants, including Senators, Congressmen, Congressional staffers and military officials as well as technology experts brought to the panel some very intelligent questions:

• “How will IUID support anti-counterfeiting measures?”
• “What’s your perspective on IUID and the integration to the defense supply chain?”
• “How does the Army need to change the culture in order to support true adoption of IUID technology?”

By 11:00, I was making my introductory remarks to the panel (refer to my last blog for listing of panelists). But first there were five members of Congress who wanted to share a few words with the audience on the importance of this event. The Rhode Island delegation was well represented. We can’t thank Senator Whitehouse (and his staff!) enough for everything they did to provide key support.

Five panelists, including the 21^st Secretary of the Air Force, then articulated the critical need for IUID technology. The discussion was insightful and the ensuing questions from the audience demonstrated a high level of interest and enthusiasm. Many facets of IUID were covered, and I’ll cite a few of the more notable topics aspects:

• The shift in culture for the US military was addressed from a number of angles, including the adjustment in business processes to take advantage of IUID and machine readable codes. Other discussion involved the nature of massive ERP systems deploying within the military and the resulting impact on the best use of IUID.
• Metrics for return on investment were provided to shed light on areas of our military beyond those addressed by the Joint Logistics Board (JLB) IUID Report of 2008. The significance of this only strengthened the business case for the technology.
• Emphasis on commercially available IUID technology that exists today and the leveraging of the ubiquitous Smartphone.

Networking was lively and demonstrations were packed. This type of event always requires a much higher level of effort than originally anticipated and, with this in mind, I’d like to send a shout out to AIM North America COO, Mary Lou Bosco, who managed an infinite number of details and was critical in making this a huge success.

Thank you to all who had a hand in this significant milestone in the adoption of IUID.