Defense Logistics:

Better Strategic Planning Can Help Ensure DOD's Successful Implementation of Passive Radio Frequency Identification

GAO-05-345: Published: Sep 12, 2005. Publicly Released: Sep 12, 2005.

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The Department of Defense (DOD) has had problems with tracking and identifying inventory for many years, most recently in Operation Iraqi Freedom. One of several tools DOD is using to address these inventory problems is radio frequency identification (RFID). RFID technology consists of passive or active tags that are attached to equipment and supplies that are shipped from one location to another. Although DOD did not begin official implementation of passive RFID technology until January 1, 2005, DOD has been using active RFID technology since the early 1990s and began developing policy and pilot testing passive RFID in 2003. As of January 1, 2007, all commodities, excluding bulk commodities, are to have passive RFID tags. Full implementation of passive RFID is estimated to cost hundreds of millions of dollars. This report (1) provides information on the status of passive RFID implementation, (2) addresses the extent to which DOD has developed a strategic approach for implementing passive RFID, and (3) highlights challenges DOD recognizes it faces in implementing passive RFID and any plans developed by DOD to mitigate these challenges.

Since 2003, DOD and the components have taken actions to begin using a potentially promising technology, known as passive RFID, throughout their supply chain operations. These actions include development of policy and guidance and the use of pilot projects and initial implementation to test the technology's application to their business processes. In addition, infrastructure and funding have been provided, but this has been minimal because implementation did not officially begin until January 2005. Future funding requirements are expected to increase sharply as full implementation proceeds--from $6.6 million as of January 2005 to about $472 million projected from fiscal years 2006 through 2011. This $472 million projection does not include the cost of system interoperability, which officials believe will be the most expensive element of implementation. Full implementation of passive RFID in supply operations is not anticipated until 2016 or beyond. While DOD has taken a number of actions to direct the implementation of passive RFID, it has not yet developed a comprehensive strategic management approach that incorporates sound management principles. The planning by DOD and its components lacks or only partially incorporates several key management principles needed to effectively guide, monitor, and assess implementation. The development of a comprehensive strategic management approach that fully incorporates these principles could provide decision makers with a framework to guide RFID implementation efforts and the means to determine whether these efforts are achieving the desired results. This affects both DOD and its components because the components are developing implementation plans to support DOD's RFID policy. DOD has identified several challenges that will need to be resolved before passive RFID can be fully implemented, but it has not yet developed a mitigation plan to address these challenges. Some challenges relate to the fact that passive RFID is a new and evolving technology, while other challenges derive from operational issues and obtaining adequate funding. Furthermore, certain regulatory and administrative obstacles remain. Until DOD and the components identify actions to mitigate these implementation challenges, their progress in resolving these challenges may be impeded.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: The Secretary of Defense should direct the Under Secretary of Defense (Acquisition, Technology, and Logistics) to expand its current RFID planning efforts to include a DOD-wide comprehensive strategic management approach that will ensure that RFID technology is efficiently and effectively implemented throughout the department. This strategic management approach should incorporate the following key management principles: an integrated strategy with goals, objectives, and results for fully implementing RFID in the DOD supply chain process, to include the interoperability of automatic information systems; a description of specific actions needed to meet goals and objectives; performance measures or metrics to evaluate progress toward achieving the goals; schedules and milestones for meeting deadlines; identification of total RFID resources needed to achieve full implementation; and an evaluation and corrective action plan.

    Agency Affected: Department of Defense

    Status: Closed - Not Implemented

    Comments: In commenting on a draft of this report, DOD non-concurred with this recommendation. DOD did not agree that it should assume a management role over the individual services' implementation of RFID policies. In subsequent followup discussions with DOD officials, it is clear that the department has not changed its position with regard to this recommendation. DOD confirmed that it does not intend to implement this recommendation. Consequently, we are closing this recommendation as not implemented.

    Recommendation: The Secretary of Defense should direct the secretaries of each military service and administrators of other DOD military components to develop individual comprehensive strategic management approaches that support the DOD-wide approach for fully implementing RFID into the supply chain processes.

    Agency Affected: Department of Defense

    Status: Closed - Implemented

    Comments: While each of the individual military services did not develop a single management approach to support the DOD-wide RFID policy as intended by this recommendation, they each have developed and implemented a series of implementing guidance and instructions over the past several years to support the DOD-wide RFID program. These various guidance and instructions for each service have collectively accomplished the overall intent of GAO's recommendation. Consequently, we are closing this recommendation as implemented.

    Recommendation: The Secretary of Defense should direct the Under Secretary of Defense (Acquisition, Technology, and Logistics), the secretaries of each military service, and administrators of other military components to develop a plan that identifies the specific challenges impeding passive RFID implementation and the actions needed to mitigate these challenges. Such a plan could be included in the strategic management approach that we recommend they develop.

    Agency Affected: Department of Defense

    Status: Closed - Not Implemented

    Comments: In commenting on a draft of this report, DOD non-concurred with this recommendation. DOD did not agree that it should assume a management role over the individual services' implementation of RFID policies. In subsequent followup discussions with DOD officials, it is clear that the department has not changed its position with regard to this recommendation. DOD confirmed that it does not intend to implement this recommendation. Consequently, we are closing this recommendation as not implemented.

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