Radio Frequency Identification to Revolutionize Department of Defense Supply Chain Management
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Transcript of 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
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Colonel Cathy Erickson, USAF, MSC, CHE
Program Manager
Defense Medical Logistics Standard Support (DMLSS)Falls Church, Virginia
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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
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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
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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
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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
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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”
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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
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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
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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
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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
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Automatic Identification
Technology Concept Overview
ASSET IDENTITYIDENTITY
REALIZATIONENTERPRISE
DATA
TECHNOLOGY
Barcode Readers
RFID Reader
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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)
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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
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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
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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
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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
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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
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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
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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
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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
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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)
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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
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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
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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
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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
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DMLSS – Healthcare Force Enabler
Medical Logistics in Peacetime & Wartime
Peacetime MHS Wartime/Contingency
Operational
Continuum
www.tricare.osd.mil/dmlss