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DoD Supply Chain Integration Performance Metrics using RFID April 8, 2008. Demonstrate how passive RFID… Captures precise measurement of materiel flow Identifies potential opportunities for improvement Improved business processes (Lean Six Sigma approach) Timely system updates. Objective.

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DoD Supply Chain Integration

Performance Metrics using RFID

April 8, 2008


Objective l.jpg

Demonstrate how passive RFID…

Captures precise measurement of materiel flow

Identifies potential opportunities for improvement

Improved business processes (Lean Six Sigma approach)

Timely system updates

Objective


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Fort Richardson, AK

Elmendorf AFB, AK

Travis AFB, CA

DDJC

Commercial Truck

Military Aircraft

Commercial Ship

Using RFID to highlight opportunities for improvement

The Alaska RFID Project

Cross-Service implementation of passive RFID technology along multiple supply chain segments at select Department of Defense (DoD) sites (DDJC, Travis, Alaska)

  • Objectives of Alaska Project

    • Determine how to automate processes with passive RFID technology & execute RFID enabled processes

    • Determine how to make ITV data available through DoD enterprise capabilities (e.g. DAAS, IDE, AV)

    • Identify business process re-engineering opportunities

    • Quantify the financial benefits


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RFID provides a new data point - revealing actual materiel movement more discretely for the first time

Continuous Process Improvement (CPI)

We need to understand this gap

Root cause analysis

Actual Movement of Materiel

System Transaction

RFID Middle-ware

Logistics System

Issue Identification

Identify issues with the process between these two points

Accurate measurement


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The new RFID data point provides additional insight within the response time segments

Transportation / Theater Time

Storage Depot Time

Shipment Transaction

Shipment Transaction

Receipt Transaction

Departure

Departure

Arrival

Retail Logistics System

RFID Middle-ware

RFID Middle-ware

RFID Middle-ware

Logistics System

Logistics System

Retail Facility

Trans-shipment Point

Distribution Depot


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RFID reveals potential areas for improvement at the Container Consolidation Point

The average time to build a container load at the CCP was over 3 days

In-transit to the Customer

Transportation Time

System transaction indicating truck departure

Materiel loaded onto the truck trailer

RFID Middle-ware

Logistics System

The average time to build a container was variable

Average = 3.33 days


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RFID reveals potential areas for improvement at the retail sites

Site A had an average receipt posting of 0.3 days. Site B had an average receipt posting of 8.5 days.

The new data makes this process visible for analysis.

Transportation Time

Actual Arrival of Materiel (Visibility Transaction)

System Receipt Transaction

Retail Logistics System

RFID Middle-ware

Opportunity: Reduce receipt take-up time

Business Benefits: Materiel to the customer more quickly, Increased throughput


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RFID reveals potential areas for improvement at retail sites when there is no system receipt at DAASC

Identify issues with the process

No System Transaction in DAASC

X

Actual Movement of Materiel

RFID Middle-ware

  • Many requisitions to the Alaska sites did not have a system receipt at DAASC*:

  • 19% of the requisitions going to Ft. Richardson

  • 26% of the requisitions going to Elmendorf AFB

*Requires additional causative research:

- Receipted in local AIS but not sent to enterprise level?

- Not receipted in local AIS or at enterprise level?

Sep-Nov 2007 requisitions reviewed in Jan 08. Metrics are based on a statistical sample - 95% confidence with a variation of ±6.5%.


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95 – 97% of requisitions were visible at the local site via RFID or FEDEX, despite not having a system receipt at DAASC

Type of visibility at Ft Richardson

Type of visibility at Elmendorf AFB

Sep-Nov 2007 requisitions reviewed in Jan 08. Metrics are based on a statistical sample - 95% confidence with a variation of ±6.5%.


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Closing receipts in a timely manner produces business benefits

Including requisitions not received, the response time measurement grows from an average of 8.5 days to 28.9 days.

Transportation Time

Actual Arrival of Materiel (Visibility Transaction)

System Receipt Transactions averaged 8.5 days

Time of the Analysis (No receipt in Systems yet)

RFID Middle-ware

Retail Facility

Opportunity: Reduce LRT by eliminating erroneous supply receipt discrepancies

Business Benefits: Reduce erroneous losses, Avoid possible reorders


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Estimating a potential business benefit – avoiding reorders

22% of requisitions from DDJC to Alaska sites were never received at DAASC.

  • After the expected arrival date, 30.1% of those requisitions had a subsequent requisition by the same unit ordering the same or greater quantity of the same NSN

  • The POSSIBLE reorders represent 7% of the entire number of requisitions sent to Alaska in same timeframe (June – Sep 2007)

    • Transportation Savings

    • Inventory Reduction

Not Received

Materiel that Arrived

Original Request:

Requisition A

NSN # 123

Alaska Customers

DDJC

Reorder

Reordered Request:

Requisition B

NSN #123

* Requires additional analysis of demand data to confirm if reorders occurred

Analysis June 2007 – September 2007Metrics are based on a statistical sample - 95% confidence with a variation of ±6.5%.


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TDD Target reorders

RFID reveals precise materiel movement, enabling Lean Six Sigma process analysis

* RFID LRT Mean = 32 days STDev = 17.5 days

*System LRT Mean = 43.5 days STDev = 24 days

68% of Issue Priority Group 3 requisitions actually arrive within the defined Time Definite Delivery (TDD) target of 37 days compared to 56% of system receipts.


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Potential improvements will have a cumulative effect across the DoD Supply Chain

Transportation / Theater Time

Storage Depot Time

Shipment Transaction

Shipment Transaction

Receipt Transaction

Departure

Departure

Arrival

Retail Facility

Trans-shipment Point

Distribution Depot

8 day improvement*

2 day improvement*

1 day improvement*

11 day improvement*

*days improvement are examples only


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Passive RFID provides a new data point the DoD Supply Chain

Captures precise measurement of materiel flow

Identifies potential opportunities for improvement

Improved business processes (Lean Six Sigma approach)

Timely system updates

Initial implementations at small sites yield an opportunity for improvement

Analysis team will continue to work with the Services to enable them to complete, and expand upon, the analysis

Summary


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