RFID Technology in U.S. Army Supply Chain Operations

Introduction: RFID and U.S. Army Supply Chain Needs

Military commanders and leaders responsible for the many operational needs inherent in supply chains stand to gain the greatest benefit from determining the future use, selection, and justification of Radio Frequency Identification (RFID) technology for use by the U.S. Army. The multifaceted missions of the U.S. Army require a continual evaluation of how to improve processes, systems, and techniques to attain missions as cost-efficiently and effectively as possible through the use of proven new technologies. This requires the U.S. Army specifically, and the Department of Defense (DoD) overall, to continually seek out technologies that have the potential to augment existing systems and processes, making them more efficient, effective, and measurable over time.

One of the most complex sets of processes and strategies the U.S. Army is expected to execute is its global supply chain operations. Given the magnitude of Army missions—from delivering supplies and humanitarian aid to Haiti, Chile, and throughout Africa to ongoing operations in Afghanistan and Iraq—supply chain management and the many processes it encompasses are essential to the U.S. Army's global effectiveness and mission attainment. RFID is a component of the automatic identification (Auto-ID) series of technologies and, as a result, relies on a series of command sets and Application Programming Interfaces (APIs) purpose-built to gain insights into the traceability of assets through supply chains and distribution channels (Wang & Wang, 2009). Auto-ID technologies rely on radio frequency waves to sense and track assets tagged with compatible labels.

The implications for the U.S. Army of being able to manage its global supply chain operations with real-time insight into which assets are in transit, to which locations, and for which specific mission, can provide traceability and visibility not previously possible. The intent of this analysis is to evaluate RFID for the U.S. Army's use from a selection and justification standpoint. In the commercial sector, RFID has proven to be a highly effective technology for automating supply chains and increasing their performance. In the retailing industry specifically, RFID is quickly emerging as a standard that Walmart is endorsing and requiring its top 100 suppliers to support in order to increase the quality, speed, flexibility, and cost-efficiency of supply chain management (Goebel & Gunther, 2009). The U.S. Army will likewise be able to gain quality, speed, flexibility, and cost advantages over time by adopting RFID into its supply chain processes, systems, and strategies on a global scale.

Description of RFID and Related Technologies

Known most for its tags, RFID is actually an entire information system that captures, classifies, and analyzes data collected from RFID tags throughout a distribution network. It incorporates radio frequency (RF) technology to enable communication between tags and antennas. The systems responsible for tracking individual tags maintain databases that capture all tag data and asset movement over time (Cheung, Chu, & Du, 2009).

RFID systems are critically important for providing the balanced scorecards of metrics, key performance indicators (KPIs), and analytics necessary to keep supply chains on track to attain their objectives (AMR Research, 2004). In the case of the U.S. Army, these performance metrics must be balanced to deliver quality and speed of deployment in a cost-effective and agile manner. For the U.S. Army and its culture of measuring results for continual improvement, the quantified validation of RFID makes the calculation of Return on Investment (ROI) possible. It is important to note, however, that for ROI to be attained with an RFID information system, there must be exceptional levels of integration across all components and a defined strategy for how the tags will be used to attain distribution, logistics, supply chain, or maintenance, repair, and overhaul (MRO) goals over time (Siedsma, 2007).

RFID tags vary significantly in cost, size, complexity, data storage capacity, durability, and transmission characteristics. While there is a wide variety of tags, the two major classifications are Active and Passive. In the consumer packaged goods (CPG) and retailing industry, a third type called Active Backscatter has also been under development (Carroll & Neu, 2009). By definition, active RFID tags have their own power source, circuitry, and radio transmitter, and are therefore more expensive to produce than Passive Backscatter tags, which are reader-powered. Active RFID tags transmit their own radio signal and can be read at a range of up to 300 feet, while Active Backscatter tags use battery power to reflect a radio signal from a reader at between 10 and 50 feet. Passive Backscatter tags, unlike Active tags, are reader-powered: the frequency emitted from the reader is interpreted and reflected back by the tag. As a result, Passive Backscatter tags have a range of between 4 inches and 15 feet, depending on the reader technology used. Manufacturers of RFID tags differentiate their products on the chipsets used, packaging for specific applications, and the type of antenna employed.

For the U.S. Army, the ability to define specific DoD requirements for both Active and Passive tags—including security specifications for each—is essential. These considerations will contribute to the performance of RFID-enabled distribution and logistics centers over time while also ensuring a high level of security for RFID-tagged assets and their locations throughout global supply chains. Customization of RFID tag technology for the specific requirements of the U.S. Army and DoD will further increase the overall effectiveness and performance of this technology for the armed services.

Data capacity, read/write functionality, programmability, and applications are the primary differentiating features of RFID tags. For the U.S. Army, the most essential tags would be Active RFID tags, as they contain the greatest amount of data and also have a dynamic data file associated with them. The U.S. Army's logistics and supply chain needs are diverse and would require tags from each classification, with the most critical being applied to the most valuable assets. The use of simple EAS-based RFID tags on daily rations and replacement parts for vehicles would be suitable, whereas full Backscatter Active technology would be appropriate for armaments, field hospitals, and other high-value assets that require continual tracking through supply chains (Cheung, Chu, & Du, 2009). Backscatter Active tags would also be critically important for tracing medical supplies and relief kits destined for areas damaged by natural disasters, such as Haiti and Chile.

All RFID tags have the ability to be programmed, with the larger and more expensive Backscatter Active tags offering the greatest versatility in terms of containing the EPC command set. Comparable to Electronically Programmable Read-Only Memory (EPROM) in computers and peripherals, the largest RFID tags can be programmed with commands and codes that define an asset's status in a distribution network, its ownership, current repair or readiness state, and even its service record. All of these factors together give RFID significant versatility as a solution to complex logistics and supply chain challenges.

The extent of programmability of a given RFID tag type is directly related to the signal strength required to transmit its contents. Lower-end RFID tags do not require as much power, as the variables and values defined by EPC code programming are minimal. Such tags commonly track manufacturing date, shipment date, origin factory, and quality assurance audit data. By contrast, larger RFID tags with their own power sources can store up to 16 MB of data in some instances; the U.S. DoD uses these to track shipping containers and their contents as they are sent globally. The greater the functionality of the tag, the higher the frequency required to communicate its contents. The greater the frequency, the greater the flexibility and the more data a tag can store, capture as it moves through supply chains, and report back via readers.

The DoD pioneered the use of very high-frequency RFID tags on pallet containers sent to the Persian Gulf for the Iraq War and for delivery to Afghanistan. Studies indicate that using the shipping container similarly to how a consumer goods manufacturer uses a mixed pallet—mixing products to reflect end-of-chain needs—yields significant ROI over time. Mixed pallet mode shipping is the term Walmart uses to explain this concept. For the U.S. Army, where a ship full of containers can mean the difference between a mission being accomplished or not, it is critical that RFID technologies scale to support maximum data capture and transmission (Kumar, 2007).

RFID Applications in Military Supply Chains

The breadth of RFID applications continues to broaden as the underlying system components—from databases to scanners and tags—mature rapidly. The most common process application of RFID is streamlining supply chains. The U.S. Army's reliance on a highly integrated and coordinated supply chain is evident in the build-out of Collaborative Supply Chain Management (CSCM) within this branch of the armed forces (Carroll & Neu, 2009).

RFID has the potential to make several key contributions throughout DoD supply chains and the U.S. Army's specifically. From monitoring inbound supplies and their quality levels to developing Bills of Materials (BOM) definitions for the manufacturing of customized vehicles, armaments, supply containers, and support systems, RFID has the potential to revolutionize deployment speed while significantly reducing operating costs. Supply chains often do not achieve their highest levels of efficiency when there is a lack of inter-process, inter-system, and inter-role visibility. RFID technologies alleviate this lack of visibility by capturing data in real time and then reporting it through data management systems that provide analytics of key process areas (AMR Research, 2004).

The DoD RFID Supply Chain Analysis illustrates how RFID can be integrated into the workflow of any distribution-centric organization affiliated with the DoD and the U.S. Army. This lifecycle-centric perspective shows how RFID can accelerate the value chain as the Army procures assets and delivers them to personnel in the field. The initial use of RFID on pallets, cases, and items drastically reduces distribution centers' and depots' costs and time for managing inventories, and also reduces incorrect order picks and shipments.

Mixed pallets made possible by RFID tags allow the DoD and the U.S. Army to selectively ship only what is needed through Transportation Depot Centers (TDCs). This eliminates the need to "burst" or segregate shipments: TDCs can drop-ship mixed pallets that are consistent with in-field requirements within hours, instead of breaking them apart, inventorying product, and re-filling orders (Hozak & Collier, 2008). RFID thus acts as a source of timely and accurate data throughout the U.S. Army's supply chain to reduce errors and increase efficiencies over time.

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