radio frequency identification to revolutionize department of defense supply chain management

7/28/2019 Radio Frequency Identification to Revolutionize Department of Defense Supply Chain Management

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I.4 Radio Frequency Identificationto Revolutionize DoD Supply Chain

Management




Colonel Cathy Erickson, USAF, MSC, CHE

Program Manager

Defense Medical Logistics Standard Support (DMLSS)Falls Church, Virginia




4

Presentation Overview

Define Radio Frequency Identification (RFID)capabilities

Analyze current business practices

Discuss RFID potential implementation in the

healthcare supply value chainOutline DoD medical logistics futureapproaches using RFID




5

Materiel * Facilities * Equipment & Technology Management * Whol Materiel * Facilities * Equipment & Technology Management * Whol esale Functionsesale Functions

DMLSS Mission

Dramatically Improve the Responsiveness of Medical LogisticsSupport

Implement business innovations that significantly increaseeffectiveness of clinical healthcare delivery while reducing costs

Develop a high-quality, integrated medical logistics automatedsystem for use by all Army, Air Force, & Navy forces in peace & war

PeacetimeMHS

OperationalContinuum

Wartime/Contingency

Return on Investment(FY2002-2012)

BENEFITS

COSTS

$3,829M

$599M

“For every $1 DMLSS needed, $6.40 is realized”

Benefit to Cost Ratio6.4:1

JMAR JMAR

Asset Visibility




DMLSS Enterprise Wide

Medical Logistics Management

DMLSS

Wholesale

DMLSS

Retail Army, Navy, Air Force

Military Treatment Facilities

• Materiel Management

• Facilities Management

•

Financial Reporting

• Materiel Readiness Planning

• Prime Vendor Management

•Contingency Contracting

• Financial Reporting

• Business Intelligence

• Situational Awareness

Conduct Research& Make Purchase

Decisions

Continuous

ProcessImprovement

Provide

Transaction

and

Management Capability

Negotiate Supply and

Contingency

Contracts

Provide Business Intelligence, Situational Awareness

and Web-based Ordering

Provide

Medical Data Repository

Manage

Product, Pricesand

RequirementsDMLSS Clinical Systems

• Nutrition Management

• Defense Blood System

• Special Needs Program

Joint Medical AssetRepository (JMAR)

Asset Visibility:• In-Process

• In-Storage• In-Transit

• In-Theater




DMLSS Supports aClinically-Driven Supply Chain

(Sense and Respond to Clinical Events)

Patient

Identified

ClinicalCare Path

Determined

Clinical

Event

Scheduled

Resources

Managed

Care

ReceivedAnalyze

Decision Support

SupplyDistribution

Receiving/

Reconciliation

Generate

Purchase

Order

Supply

Selection

Medical Supplies Dispensed

and Delivered

Medical Supply

Chain

Management

PO Payment

Clinical /Materiel Order

Generated

Demand Forecasting

Measure, Track, and Analyze

Billing

Pick, Pack,

and Ship

Clinical

Decision

Support

Replenishment




Reengineering Medical

Logistics Key Business Processes

Future (2011)Past (1996)

Commercial

Suppliers

Local Purchase and

Credit Card Buys

Depot-Stocked Items

Medical

Customers

2.5%

2.5%

40%

20%

40%

Goal

95%

• Prime Vendor

• Web-Based Ordering

• e-Business

Price we pay for supplies/drugs is lowest in U.S. Health care

80% of items received in less than 24-hours

Other 20% of items received in 48 - 72 hours

DoD inventories of supplies/drugs nearly eliminated

Contracting, ordering and bill paying totally electronic

Current-use supplies/drugs go to deploying units via commercial vendors

One standardized medical logistics Automated Information System

GOALS:

Electronic Commerce –

“The Technology to

Accomplish the Vision”




Prime Vendor Business Practice -The Highest Payback Area For DMLSS

Hospital Customer Manufacturing

12 - 48 Hours

Order to Receipt

Order to Receipt Time: 20 Days to 1 Day

Days of DoD Inventory: 380 Days to 10 DaysCost of Materiel: 15% Reduction

90 Days

Before

Prime Vendor

12 - 24 Hours

Order to Receipt

Reengineered

Inventory: 20 Days 30 Days

Hospital Customer

30 Days

7 Days

Manufacturing

30 Days

Hospital Warehouse DoD Depot

20 Days

90 Days 270 Days

Inventory: 10 DaysNDCs

UPNs


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DMLSS Brings ElectronicCommerce to Health Care Operations

Defense Finance and

Accounting Service (DFAS)

Daily Supply Orders Prepared and Shipped

5pm – 4am

Electronic Invoice

Electronic Payment

Tomorrow’s Supply Needs Determined

2pm – 3pm

Tomorrow’s Supply Orders Processed

3pm – 5pm

Daily Supply Orders Received

5am – 6am

Daily Supply UsageOrder Verified and Supplies Stocked

7am – 8am

Medical/Surgical

Pharmaceutical

AIT enables

E-Commerce





Why Investigate RFID?

Appropriate application of RFID technology to currentbusiness processes could be another opportunity to

increase efficiency and customer serviceNeed to understand the technology’s maturity andintegration path in regards to how it fits with theDMLSS architecture

Initial studies will determine the location and level of technology insertion

DMLSS is an enabler to the services – DMLSS mustensure that investment in RFID meets the DMLSSmission and provides benefits to the war-fighter





Optical MemoryCards

Automatic Identification

Technologies (AIT)

AIT encompasses a variety of read/write data-storage technologies

that can be used to capture asset identification information





RFID: An Enabling Technology

Features of RFID:

Read/Write Capabilities – Ability to add information directly to

tags enables each unique asset to carry its own unique history(e.g., maintenance record directly attached to vehicle

Non-contact Reads – Ability to read tags at distance, under avariety of environmental conditions, without physical

manipulation of the assetFast Read – Ability to simultaneously read large numbers(1750 tags/sec) of items

Links with Sensor Technology – Ability to directly captureenvironmental information

Declining Costs – Economics of tagging small items becomingmore viable as cost per tags declines





Automatic Identification

Technology Concept Overview

ASSET IDENTITYIDENTITY

REALIZATIONENTERPRISE

DATA

TECHNOLOGY

Barcode Readers

RFID Reader





RFID and Wireless Solutions Have

Broad Applications in the Medical Field

Wireless Applications

Drug Counterfeit solutions

Cold Chain Management

Point-of-Care applications- Accessing electronicmedical records atpatients' bedsides

Telemedicine

Autonomous SupplyChains

Patient Safety (e.g.medication administration

Asset / PersonnelTracking

Inventory management

Voice Communications

Wireless Technologies

RFID

Wireless LAN (802.11

a/b/g)WIMAX

Commercial Wireless

Services

Bluetooth

RTLS (Real Time

Locations Services)

LMR (Land Mobile

Radio)





MHS Organizations and Commercial

Entities are Exploring RFID Technology

US Navy, Fleet Hospital

Three, Iraq – Using RFID

to track wounded

soldiers, refugees and

POWs

Ft. Bragg – Employed

active RFID to track

medical equipment

VA – developing concept

for a number of RFID

pilots within the hospital

setting to enhance

patient safety

Boston, MA Beth Israel

Deaconess Medical

Center– wireless assettracking

Houston, St. Luke –

RFID to improve bed

management

Charlotte, NC – passive

RFID infant tracking

security system

Yale, New Haven – RFID

used to improve

equipment management

and flow of patients andmedical staff

MHS – MTFs are using

Wireless LANs in

receiving gates, enabling

mobile workers

untethered access to the

DMLSS application

79% of healthcare

executives plan to usewireless information

systems this year while 54

percent plan to use

handheld devices.Source: 2005 HIMSS survey

80% of

healthcare

organizationshave deployed

wireless LANs

or plan to deploy

one in the next

12 months.

Source: IDC Research





16% delivered on

time/on budget

Clear statement of

requirementsStakeholder

involvement

Executive

Management Support

Proper training

53% late, over budget and/or delivered less than requirement

Incomplete requirements

Lack of stakeholder involvementLack of resources

Unrealistic expectations

Lack of senior support

31% cancelled before

completion

Business case invalid

FundingPrioritization

Source: Standish Group International

Many Technology Initiatives

Have Had Mixed Track Records

Successful

16%

Cancelled

31%

Under Perform

53%

With proper planning wirelessinitiatives can avoid similar pitfalls





A Comprehensive Approach

for a Successful Wireless

Implementation Includes…

Planning

Look at strategic needs of organizations and consider how wireless solutions align

with those strategiesPOM process to fund all aspects of technology insertion (hardware, software, sitesurvey, installation, etc.,). Will technology be funded centrally or throughoperating budgets?

Consider impact of Enterprise Architecture on desired solution

PolicyCreate clear, targeted policies to provide guidance on implementation andsecurity considerations

Consider BPA contracts for hardware, software and services to easeimplementation of comprehensive solutions across multiple locations / services

R&D - Understand the technologies, how they may best be used and their limitations

Communication and Feedback

Educate personnel on policies and technologies

Solicit feedback from end users via working groups





DoD is Looking at Benefits

From Use of RFID Technology

Reduction of Out of Stock

Inventory Accuracy / VisibilityReduction of Safety Stock

Faster Product Recalls

Better Management of Shelf Life

Reduction of Internal ErrorsImproved Decision Making

Real Time Inventory Monitoring

Fewer Lost Assets

Better Human ResourceUtilization

Product Authenticity

Vendor/DC/Depot POE / POD Forward Depot/DC Tactical Field

Total Asset Visibility Across the DoD Supply Chain

Q




DoD RFID Policy for Incorporating

RFID Within the DoD Supply ChainActive RFID Policy (Updated

July 30th 2004)

Applied to all freight containers,

consolidated air pallets and

large engine containersshipped to/from overseas DoD

receiving points and War

Reserve Materiel

Passive RFID Policy Applied to cases,pallets of materiel:

January 2006: Comfort Items,Petroleum, Lubricants, Oil, Chemicals, Additives, Barrier Material, Ammunition,

Pharmaceutical and Medical Materielshipped to specific DLA sites

January 2007: All DoD manufacturersand suppliers must tag all individualcases, all cases packaged within

palletized loads, all pallets, and unitpacks of UID items

FY 2007: AIS Integration

Nested

Visibility




21

Overall RFID Pilot Objectives

Develop technical requirements for integratingRFID into the existing DMLSS medical supplychain management application

Develop operational recommendations for integrating RFID into DMLSS operations basedupon best practices in industry and government

Provide cost estimates for introducing RFID into

DMLSS operations

Support tactical / field level deployment of thetechnology

Provide a benchmark for future DMLSS RFID

implementations

Determine vendor’s roles and capabilities inmaking RFID successful and understand howthe vendor relationship will evolve to include

RFID




22

Assets

Network

Edge

O p er a

t i on al D a t a

T r an s

a c t i on al D a

t a

External

Network

Enterprise

Network

Overview of an RFID System Deployment




23

DMLSS RFID Pilot is Designed

to Emulate Three Key Medical

Logistics Business Processes

Receiving

Receive advance shipping notices (ASN) from vendor for incomingshipments

Receive RFID tagged materiel from vendor and reconcile shipment’sRFID tags to ASN

Assembly

Create RFID labeled pallets for outbound assemblages

Affix DoD RFID label onto outbound cases and load them ontooutbound pallets

Shipping

Apply active RFID tag to air pallet (463L) or cargo container (SEAVAN)and load container

Write container manifest to active tag

Update ITV server with active tag data and

WAWF for passive tag data




24

The Pilot Will Measure Changes in...

Operational efficiencyReducing number of errors

Reducing time to complete tasks

Improving resource utilizationImproved ReadinessAccomplish through higher responsiveness and accuracy

Few ways to currently gauge accuracy – RFID will provide futureaccuracy statistics

Faster throughput (pick-pack-ship) means faster response to thewarfighter

Decrease Shipping errors

Improved asset visibility

Improve perpetual inventory accuracy by reducing effort to findspecific assets (emergency orders, recalls, expiring material)

Improve inventory accuracy – especially retrograde material

Reduction of time to pay vendors

(prompt payment act)




25

Deploying RFID Readers and Tags

in the Field is Only One Part of

the Engineering Challenge

With the recent RFID mandates for supply chain, the proliferation of RFID devices (readers and tags) in the enterprise network will

introduce vast amounts of RFID data that needs to be collected andmanaged. One Wal-Mart warehouse received 30 terabytes of data inone day with only 62 vendors sending RFID tagged suppliers!

Data management and data integration are critical components of asuccessful RFID system design

Legacy AIT systems and networks must be upgraded toaccommodate RFID data




26

Proper Planning and Design is Required for

the Integration of RFID Technology with

the Back-end Enterprise Network & Systems

Without the right strategic vision, technical architecture, andplanning

Legacy networks will not be able to cope with the volume of data

Legacy applications will not be able to consume “operations”data (from RFID processes)

RFID data elements will not be standardized across the system

implementation

Manual effort will remain the same or increase

A technical architecture that is both data-centric andnetwork-centric is required

Such architecture will

enable smooth integration with legacy systems

extend existing business processes

utilize network bandwidth in an optimized way




27

DMLSS RFID Pilot Study Update

DMLSS RFID pilot study phase III was initiated at Kelly

USA (San Antonio, TX) – June 2006

Summary of key observations

Recommendations / outcomes from the study




28

Summary

Define Radio Frequency Identification (RFID) capabilities

Analyze current business practicesDiscuss RFID potential implementation in the healthcare

supply value chain

Outline DoD medical logistics future approaches usingRFID




DMLSS – Healthcare Force Enabler

Medical Logistics in Peacetime & Wartime

Peacetime MHS Wartime/Contingency

Operational

Continuum

www.tricare.osd.mil/dmlss

radio frequency identification to revolutionize department of defense supply chain management

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