The Battle for Visibility

Asset visibility has taking a giant leap forward with the implementation of the US Department of Defense (DoD) Unique Item Identification (IUID) and passive RFID initiatives. Asset visibility enables the military to answer these questions: Who made the item? Where is it now? How will it get here? When will it get here? A January 2009 US General Accounting Office (GAO) report notes, “Lack of asset visibility increases vulnerability to undetected loss or theft and substantially heightens the risk that millions of dollars will be spent unnecessarily. Furthermore, a lack of visibility potentially compromises cargo security and the readiness of the military.”

The IUID mandate requires continuous reporting to the military’s unique item database, called the IUID Registry. This will enable better management of components of complex DoD systems over their complete life cycle. With implementation of these IUID and RFID initiatives all maintenance, transportation and supply-related processes will be captured electronically in order to provide intelligent data for knowledge-enabled logistics. The collected data will also satisfy GAO requirements for cost containment and spending accountability.

According to the GAO report cited above, “IUID and passive RFID are technologies for capturing data on individual items or shipments and are sometimes referred to as automatic identification technology (AIT). IUID provides for the marking of individual items with a set of globally unique data elements to help DOD value and track items through their life cycle. The passive RFID initiatives provide for the tagging of assets with an electronic identification device consisting of a chip and an antenna usually embedded within a ‘smart’ packing label, in order to enable electronic tracking of the assets, including the shipping date and the date they are received.”

What IUID brings to the table
IUID requirements for marking and traceability go beyond what has been done before with regard to linking assets and property to the budgets through which they were acquired and to the balance sheets that reflect their current value. Charles Mara of Data Capture Institute, a bar code research company with active participation on the IUID integrated product team, makes this analogy: “Up until now assets and property have been behind walls or in containers, forcing managers to make ‘guesses’ about available resources at critical times. IUID makes those walls and containers transparent.” The result of this transparency is much better equipment deployment, with a clean audit trail as a bonus.

Studies have shown that as much as 20% of capital goods budgets is wasted on acquiring property that is already owned or on the mistimed purchase of property when a substitute is available (Data Capture Institute 2004). With proper IUID implementation, the ability to trace assets and property throughout the lifecycle will all but eliminate this waste. Managers can utilize the new IUID visibility by asking for and receiving accountability from department heads. In other words, visibility and accountability are two sides of the same coin.

Property visibility and accountability throughout the government and across an enterprise will create ripple effects. In program deployment, for example, malfunctioning systems will be spotted early in a new system design life, and quality assurance teams will identify and correct the offending component immediately, Program managers will have the ability to examine similar system performance elsewhere by querying the IUID Registry.

Since the military has undertaken this sweeping initiative, the value added by the ability to track the life-cycle of each IUID, including embedded parts, provides a unique opportunity that will be undertaken as a major initiative at maintenance and logistics operations throughout the DoD. Analysis of the data on individual items and parts provides actionable information for effective decision making. The benefits of this insight include greatly improved warfighter readiness which stems from increased reliability and safety.

The ability to analyze maintenance data for failure rates throughout an item’s lifecycle provides invaluable information for predicting longevity and future failures as well as analyzing weaknesses within complex assemblies and across an enterprise. This predictive maintenance enables parts replacement and acquisition planning as well as the efficacy of materials and contractor reliability.

Here’s how that works: The manufacturer of Humvees deployed to Iraq is charged with marking each vehicle with an IUID. Manufacturers of serialized parts within the Humvee are also required to mark the items. So an axel within a Humvee will carry an IUID that is scanned and associated with the Humvee in a parentchild relationship. A US Army depot charged with the maintenance and repair of military vehicles recently reported a spate of axle failures. Because the Depot utilized IUID with maintenance records, vehicles with mal-functioning axels were quickly located and recalled and the manufacturer was held accountable.

Cost reduction and efficiency
Another advantage to asset visibility is the ability to establish accounting responsibility and budget discipline. In the mid-1990s MCI (now Verizon) recognized the need to identify millions of individual, high-cost telecom assets deployed throughout the US and Latin America. The lack of a control system meant poor visibility of duplicates, spares and replacement parts and no comprehensive failure and repair history. Besides contributing to waste, this lack of visibility hindered the ability to track support contractors’ and primary network vendors’ activities.

The Scanman Project emerged in a theoretical way at the executive level. Under the leadership of Senior Manager Will Sniffen, the practice of the solution to a very costly problem took shape. The initial goal was to uniquely serial barcode identify the installed asset base by “seek and apply” and “opportunistic” labeling, both methodologies encouraged by the IUID Policy Office. The latter method meant that labels were applied to assets at critical events such as part replacement and repair as well as entry or exit through shipping and receiving portals.

In addition to labeling existing parts, Scanman dictated that 150 suppliers were contractually bound to label parts at manufacture and to submit pedigree information to a data warehouse at MCI upon shipping from the supplier facility. The required pedigree information was specified by MCI, through the label content and design. This requirement parallels the DoD’s IUID obligation to contractors who manufacture and ship end item deliverables (EID) and those who are custodians of government furnished property (GFP).

MCI leveraged the Uniform Code Council (GS1) standard 8004 for serialized asset identification. (This standard serves the same purpose as ISO standard 15434, required by the IUID mandate for labeling DoD assets, and it is grandfathered as a commercial equivalent under current IUID policy.) All MCI labels included the purchase order number, the shipper’s tracking number, the existing serial number and the MCI 8004 manufacturer code and serial number. The label information and registration is similar to an EDI exchange and nearly the same as registering item unique identifiers (IUID) in the DoD’s IUID Registry.

By utilizing the 8004 serialized identifier, the MCI repair center was able, over time, to build a database of failure statistics for field replaceable units (FRUs). The failure statistics were used to maximize financial efficiency, for both part number and component level board repair. For instance, if a low value part came in for repair a third time, as evidenced by the scan of the item unique serial number, it would be discarded, as the cost of a new part was less than a third repair. The disposal itself was also tracked to generate part failure history.

If the item was of high value, the problem was diagnosed and common failure causes were accumulated at a component level. The benefit of this data was the ability to see patterns over time and thus make component changes that extended the life of the item. The statistics were also used for operational compliance. If a given site tried to hoard spares through inaccurate inventory, that site was audited and the managers were reprimanded. Also, failure rates and replacement costs were tracked by network, by site, by region, by VP etc. There were instances where Scanman was used to track entire shipments of parts that were sold or stolen and appeared on Ebay or at third party gray market pawn shops.

The Scanman database was also used to level spares inventory across the company so that any site could draw any item, from any other location, to speed repair time. In the DoD’s sphere, the elimination of waste and the cost savings of decreased spares is a number too large to calculate in the early stages of IUID compliance. But the strategic benefit afforded by real time location, visibility, repair history and access to replaceable parts is an obvious battlefield advantage. For example, an advanced weapons system could be grounded for want of accurate part failure and repair history. Once the IUID Registry is fully populated, additional DoD databases will be available for insightful engineering analysis.

At MCI, by utilizing information from the Scanman database, many existing blanket support contracts were renegotiated to time and material contracts, saving the company $70 million the first year alone. In some instances $20 to $30 million dollar maintenance contracts were converted to time and material, resulting in 60-80% annual cost reductions on those contracts. Additional savings were realized through tracking equipment (mainly routers, channel service units and data station units) deployed at thousands of customers’ premises. The visibility obtained through tracking enabled accounting to identify equipment that was leased, rented to own, rented and purchased outright, thereby allowing timely and accurate customer billing. This data was not previously available and boosted revenue by $10’s of millions while at the same time increasing customer satisfaction and decreasing billing costs. The Scanman project was so successful that it remains in affect at Verizon today, more than ten years later.

What passive RFID brings to the table
RFID is a transformational technology that will play a vital role in realizing the DoD vision for implementing knowledgeenabled logistic support to the warfighter through fully automated visibility and management of assets. DOD’s goal is to employ mature and emerging supply chain technologies to optimize the supply chain. The use of RFID as an integral part of a comprehensive AIT suite facilitates accurate, hands-free data capture in support of DoD business processes in an integrated end-to-end supply chain enterprise.

RFID is a key technology enabler for the DoD logistics business transformation and supports long-term integration of IUID into the DoD end-to-end supply chain. RFID is required by DoD to:

  • Provide near real-time intransit visibility for all classes of supplies and materiel.
  • Provide “in the box” content level detail for all classes of supplies and materiel.
  • Provide quality, non-intrusive identification and data collection that enables enhanced inventory management.
  • Provide enhanced unit pack level visibility.

Current DoD policy calls for RFID tags to be attached to materiel shipments at the pallet level, the case level and the package level. The package contains IUID Data Matrix marked items.

DoD supplier Gyrocam utilizes IUID and RFID
Gyrocam Systems is an industry leader in ground and airborne surveillance solutions for law enforcement and homeland security, and the only US Federal Aviation Administration (FAA)-certified provider of fully integrated and installed systems. The U.S. military makes extensive use of Gyrocam’s systems, which can read a license plate number from thousands of feet away, or detect an improvised explosive device (IED) from a surveillance vehicle at a safe distance. As a result, Gyrocam’s solutions provide commanders and their forces with the flexibility to complete missions safely and successfully. Because Gyrocam’s high-performance, leadingedge products are essential to many military operations, the U.S. DoD included Gyrocam Systems in both its IUID and RFID programs.

The solution Gyrocam chose is A2B Tracking Solution’s UID Comply! software which drives the label generation process and also manages electronic data submission to the DoD. Using a PC next to the bar code label printer, Gyrocam workers follow simple on-screen prompts to enter basic information about the order. The UID Comply! software then automatically performs database lookups, creates records that associate components with the finished product, calculates the IUID symbol data and directs printing of a properly formatted IUID bar code. The software also extracts and formats the information needed to report to the DoD and can automatically make the submission.

On the other side of the PC sits a Zebra R110Xi printer/encoder, which Gyrocam uses to produce the RFID smart labels required on its shipping containers. The PC runs RFIDTagManager for DoD software that epcSolutions developed to automate RFID labeling operations. To meet DoD reporting requirements, A2B and epcSolutions collaborated on a solution that integrates UID Comply! with RFIDTagManager to allow IUID and RFID data to be included in a single submission to the DoD.

Gyrocam applies the “child” format of IUID labels to components during production. Sometimes the company has to wait for a component to arrive from a supplier before it can complete assembly of a finished product. In these situations it may apply IUID labels to the other components ahead of time so it can complete final assembly quickly as soon as the final component arrives. The “parent” IUID label is then applied to the finished products, which are packed six per container, for shipment to the DoD.

At this point, the integrated software collects IUID data to produce a DoD compliant RFID shipping label. The software applications submit IUID data to the DoD’s IUID Registry, and RFID information to the DoD’s shipment tracking system.

AIT revolution in progress
Earlier waves of AIT adoption, both in grocery and in retail, experienced six- to seven-year adoption cycles, and in both instances this adoption occurred when the far-reaching efficiencies of inventory management, price lookup, e-commerce re-supply, batch/lot traceability and return processing were recognized. With 43,000 suppliers to the DoD, worldwide, those efficiencies stand to gain wide exposure.

Cost saving efficiencies emerging from the IUID movement will affect engineering, acquisition, property accountability, logistics, finance and maintenance. Processes that stand to benefit include inbound receiving, warranty tracking, work-in-progress, return and repair tracking, inventory control, configuration management, item or asset traceability and many more.