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Report to Congressional Committees: 

United States Government Accountability Office: 
GAO: 

January 2009: 

Defense Logistics: 

Lack of Key Information May Impede DOD's Ability to Improve Supply 
Chain Management: 

GAO-09-150: 

GAO Highlights: 

Highlights of GAO-09-150, a report to congressional committees. 

Why GAO Did This Study: 

Military operations in Iraq and Afghanistan have focused attention on 
the performance of the Department of Defense’s (DOD) supply chain 
management. According to DOD, it spent approximately $178 billion on 
its supply chain in fiscal year 2007. As a result of weaknesses in 
DOD’s management of its supply chain, this area has been on GAO’s list 
of high-risk federal government programs since 1990. DOD released its 
Logistics Roadmap in July 2008 to guide, measure, and track logistics 
improvements. DOD has identified two technologies included in this 
roadmap, item unique identification (IUID) and passive radio frequency 
identification (RFID), as having promise to address weaknesses in asset 
visibility. GAO reviewed (1) the extent to which the roadmap serves as 
a comprehensive, integrated strategy to improve logistics; and (2) the 
progress DOD has made implementing IUID and passive RFID. GAO reviewed 
the roadmap based on DOD statements about its intended purposes and 
visited sites where IUID and passive RFID were implemented. 

What GAO Found: 

The Logistics Roadmap falls short of meeting DOD’s goal to provide a 
comprehensive and integrated strategy to address logistics problems 
department-wide. The roadmap documents numerous initiatives and 
programs that are under way and aligns these with goals and objectives. 
However, the roadmap lacks key information in three areas necessary for 
it to be a more useful tool that DOD’s senior leaders can use to guide 
and track logistics improvement efforts toward achieving stated goals 
and objectives. First, the roadmap does not identify the scope of 
logistics problems or gaps in logistics capabilities, information that 
could allow the roadmap to serve as a basis for establishing priorities 
to improve logistics and address any gaps. Second, the roadmap lacks 
outcome-based performance measures that would enable DOD to assess and 
track progress toward meeting stated goals and objectives. Third, DOD 
has not clearly stated how it intends to integrate the roadmap into 
DOD’s logistics decision-making processes or who within the department 
is responsible for this integration. DOD officials stated they plan to 
remedy some of these weaknesses in their follow-on efforts. For 
instance, DOD has begun to conduct gap assessments for individual 
objectives in the roadmap and hopes to complete these by July 2009. 
They stated that they recognized the need for these assessments; 
however, they had committed to Members of Congress to release the 
roadmap by the summer of 2008 and were unable to conduct the 
assessments prior to the release of the roadmap. A comprehensive, 
integrated strategy that includes these three elements is critical, in 
part, because of the diffuse organization of DOD logistics, which is 
spread across multiple DOD components with separate funding and 
management of logistics resources and systems. Until the roadmap 
provides a basis for determining priorities and identifying gaps, 
incorporates performance measures, and is integrated into decision-
making processes, it is likely to be of limited use to senior DOD 
decision makers as they seek to improve supply chain management. 

DOD has taken initial steps to implement two technologies included in 
the Logistics Roadmap–IUID and passive RFID–that enable electronic 
identification and tracking of equipment and supplies; but has 
experienced difficulty fully demonstrating return on investment for 
these technologies to the military components that have primary 
responsibility for determining how and where these technologies are 
implemented. Although DOD has undertaken initial implementation efforts 
of these technologies at several locations, at present, it does not 
collect data on implementation costs or performance-based outcome 
measures that would enable the department to quantify the return on 
investment associated with these two technologies. Without this 
information, it may be difficult for DOD to gain the support needed 
from the military components to make significant commitments in funding 
and staff resources necessary to overcome challenges to widespread 
implementation of these technologies. As a result, full implementation 
of these technologies is impeded and the realization of potential 
benefits to asset visibility DOD expects may be delayed. 

What GAO Recommends: 

GAO recommends that DOD (1) include in its roadmap additional 
information and elements needed for a comprehensive strategy and (2) 
collect data associated with the implementation of IUID and passive 
RFID, analyze their return on investment, and determine if sufficient 
funding priority has been provided. DOD concurred with GAO’s 
recommendations. 

To view the full product, including the scope and methodology, click on 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-09-150]. For more 
information, contact William M. Solis at (202) 512-8365 or 
solisw@gao.gov. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

DOD's Logistics Roadmap Documents Numerous Initiatives and Programs, 
but Falls Short of Providing a Comprehensive, Integrated Strategy: 

DOD May Face Challenges Achieving Widespread Implementation of IUID and 
Passive RFID: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Scope and Methodology: 

Appendix II: Comments from the Department of Defense: 

Appendix III: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Logistics Initiatives and Programs Documented in the Logistics 
Roadmap: 

Table 2: Organization of the Logistics Roadmap: 

Table 3: Examples of DOD's IUID and Passive RFID Pilot Projects and 
Initial Implementations (as of September 2008): 

Abbreviations: 

AIT: automatic identification technology: 

CONOPS: concept of operations: 

DLA: Defense Logistics Agency: 

DOD: Department of Defense: 

IUID: item unique identification: 

KPP: key performance parameter: 

KSA: key system attributes: 

OMB: Office of Management and Budget: 

OSD: Office of the Secretary of Defense: 

PBL: Performance Based Logistics: 

POM: Program Objective Memorandum: 

RFID: radio frequency identification: 

UID: unique item identification: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

January 12, 2009: 

Congressional Committees: 

Military operations in Iraq and Afghanistan have focused attention on 
the performance of the Department of Defense's (DOD) supply chain 
management in support of deployed U.S. troops. The availability of 
spare parts and other critical supply items affects the readiness and 
operational capabilities of U.S. military forces, and the supply chain 
can be a critical link in determining outcomes on the battlefield. 
Moreover, the investment of resources in the supply chain is 
substantial, amounting to approximately $178 billion in fiscal year 
2007, according to DOD. As a result of weaknesses in DOD's management 
of supply inventories and responsiveness to war fighter requirements, 
supply chain management has been on our list of high-risk federal 
government programs and operations since 1990. We initially focused on 
inventory management and later determined that problems extended to 
other parts of the supply chain, to include requirements forecasting, 
asset visibility, and materiel distribution.[Footnote 1] 

DOD has worked to resolve supply chain management problems. In 2005, 
for example, with the encouragement of the Office of Management and 
Budget (OMB), DOD developed the DOD Plan for Improvement in the GAO 
High Risk Area of Supply Chain Management with a Focus on Inventory 
Management and Distribution, also known as the Supply Chain Management 
Improvement Plan, to address some of these systemic weaknesses as a 
first step toward removing supply chain management from our high-risk 
list. We stated at the time that DOD's plan was a good first step 
toward putting DOD on a path toward resolving long-standing supply 
chain management problems, but that the department faced a number of 
challenges and risks in fully implementing its proposed changes across 
the department and measuring progress.[Footnote 2] In the summer of 
2008, DOD released its Logistics Roadmap[Footnote 3] with the intent to 
develop a more coherent and authoritative framework for guiding, 
measuring, and tracking DOD's logistics improvement efforts. The 
roadmap subsumed the Supply Chain Management Improvement Plan. We have 
previously recommended that DOD improve its ability to guide logistics 
programs and initiatives across the department and demonstrate the 
effectiveness, efficiency, and impact of its efforts to resolve supply 
chain management problems by completing the development of a 
comprehensive, integrated strategy that is aligned with defense 
business transformation efforts.[Footnote 4] DOD concurred with this 
recommendation. 

Asset visibility is an area DOD has focused on in its plans to improve 
logistics, including its Supply Chain Management Improvement Plan and 
the recently released Logistics Roadmap. The roadmap describes 
visibility as answering the questions, "Where is it?", "How will it get 
here?", and "When will it get here?" Lack of asset visibility increases 
vulnerability to undetected loss or theft and substantially heightens 
the risk that millions of dollars will be spent unnecessarily. 
Furthermore, a lack of visibility potentially compromises cargo 
security and the readiness of the military. Two of the initiatives 
included in the Supply Chain Management Improvement Plan and the 
Logistics Roadmap that focus on improving asset visibility are item 
unique identification (IUID) and passive radio frequency identification 
(passive RFID). IUID and passive RFID are technologies for capturing 
data on individual items or shipments and are sometimes referred to as 
automatic identification technology (AIT). IUID provides for the 
marking of individual items with a set of globally unique data elements 
to help DOD value and track items throughout their life cycle.[Footnote 
5] The passive RFID initiatives provide for the tagging of assets with 
an electronic identification device consisting of a chip and an 
antenna, usually embedded within a "smart" packaging label, in order to 
enable electronic tracking of the assets, including the shipping date 
and the date they are received. Passive RFID tags have no battery; they 
draw power from the reader, which sends out electromagnetic waves that 
induce a current in the tag's antenna.[Footnote 6] DOD has stated that 
these two AIT initiatives represent critical efforts in support of 
larger improvements to DOD supply chain management, particularly for 
improving visibility. 

This report addresses DOD's Logistics Roadmap and the status of DOD's 
implementation of IUID and passive RFID. It was prepared under the 
authority of the Comptroller General to conduct evaluations at his own 
initiative and is being addressed to the committees of jurisdiction and 
to others who have expressed interest in tracking DOD's efforts to 
improve supply chain management. Additionally, it is part of a body of 
work we used in our evaluation of DOD supply chain management for our 
January 2009 high-risk series update. Specifically, this report 
discusses (1) the extent to which DOD's Logistics Roadmap serves as a 
comprehensive, integrated strategy to improve DOD logistics and (2) the 
progress DOD has made implementing IUID and passive RFID. 

To assess the Logistics Roadmap, we reviewed guidance, plans, and other 
documents related to its development. We also interviewed officials 
from the Office of the Secretary of Defense, Joint Staff, U.S. 
Transportation Command, U.S. Joint Forces Command, the Defense 
Logistics Agency (DLA), and the four military services involved in the 
development of the roadmap. We reviewed DOD statements about the 
intended purposes of the roadmap that were made at congressional 
hearings,[Footnote 7] in discussions with our office, and in the 
roadmap itself. We also assessed whether the roadmap incorporated sound 
strategic planning and transformation management principles based on 
our prior work.[Footnote 8] To assess DOD's progress implementing 
passive RFID and IUID, we reviewed pertinent DOD and military 
components' guidance, policy, implementation plans, business case 
analyses, and other documentation related to these technologies. We 
visited various sites, identified by DOD as locations which have 
implemented passive RFID and IUID, to observe these technologies in use 
and to more fully understand their implementation challenges and 
potential benefits. Additionally, we interviewed officials responsible 
for the coordination and management of these technologies from the 
Office of the Secretary of Defense, the four military services, DLA, 
and U.S. Transportation Command. We also reviewed OMB and DOD guidance 
on benefit-cost analysis and economic analysis for decision making 
[Footnote 9] and assessed the extent to which key principles embodied 
in this guidance have been applied to DOD's decision making for IUID 
and passive RFID. Additional information on our scope and methodology 
is provided in appendix I. We conducted this performance audit from 
January 2008 to January 2009 in accordance with generally accepted 
government auditing standards. Those standards require that we plan and 
perform the audit to obtain sufficient, appropriate evidence to provide 
a reasonable basis for our findings and conclusions based on our audit 
objectives. We believe that the evidence obtained provides a reasonable 
basis for our findings and conclusions based on our audit objectives. 

Results in Brief: 

DOD's Logistics Roadmap falls short of providing a comprehensive, 
integrated strategy to address logistics problems department-wide and 
likely will be of limited use to decision makers. The roadmap documents 
numerous initiatives and programs that are under way and aligns these 
with logistics goals and objectives. DOD officials stated that the 
roadmap should be of use in helping decision makers as they determine 
whether current programs and initiatives are sufficient to close any 
capability gaps that may be identified. However, the roadmap lacks key 
information in three areas necessary for it to be a more useful tool 
that DOD senior leaders can use to guide logistics improvements and 
track progress toward achieving goals and objectives. First, the 
roadmap does not identify the scope of logistics problems or gaps in 
logistics capabilities, information that could allow the roadmap to 
serve as a basis for establishing priorities to improve logistics and 
address any gaps. For example, the roadmap does not discuss logistics 
problems that were encountered during operations in Iraq and 
Afghanistan and how such problems will be addressed. Second, the 
roadmap lacks outcome-based performance measures that would enable DOD 
to assess and track progress toward meeting the stated goals and 
objectives. Our past work has shown that performance measures are 
critical for demonstrating progress toward achieving results and 
providing information on which to base organizational and management 
decisions. Third, DOD has not clearly stated how it intends to 
integrate the roadmap into its logistics decision-making processes or 
who within the department is responsible for this integration. For 
example, DOD has not shown how the roadmap could shape logistics 
budgets developed by individual DOD components or address joint 
logistics needs. In our prior work on DOD's transformation efforts, we 
have emphasized the importance of establishing clear leadership and 
accountability for achieving transformation results, as well as having 
a formal mechanism to coordinate and integrate transformation efforts. 
[Footnote 10] DOD officials responsible for supply chain integration 
stated that the roadmap is a first step and that they plan to remedy 
some of these weaknesses in their follow-on efforts to update the 
roadmap. For instance, DOD has begun to conduct gap assessments for 
individual objectives in the roadmap and hopes to complete these by 
July 2009. DOD stated that it recognized the need for these 
assessments; however, it had committed to Members of Congress to 
release the roadmap by the summer of 2008 and was unable to conduct the 
assessments prior to the release of the roadmap. A comprehensive, 
integrated strategy that includes these three elements is critical, in 
part, because of the diffuse organization of DOD logistics, which is 
spread across multiple DOD components with separate funding and 
management of logistics resources and systems. As we have previously 
reported, the organization of DOD's logistics operations complicates 
DOD's ability to adopt a coordinated and comprehensive approach to 
joint logistics.[Footnote 11] Until the roadmap provides a basis for 
determining priorities and identifying gaps, incorporates performance 
measures, and is integrated into decision-making processes, it is 
likely to be of limited use to senior DOD decision makers as they seek 
to improve supply chain management. Moreover, DOD will have difficulty 
fully tracking progress toward meeting its goals, from the component to 
the department level, and provide the visibility needed to fully inform 
senior decision makers of logistic needs and priorities across the 
department. We recommend that DOD include in its Logistics Roadmap the 
elements necessary to have a comprehensive, integrated strategy for 
improving logistics and clearly state how this strategy will be used 
within existing decision-making processes. 

DOD has taken several steps toward implementing two technologies 
included in the Logistics Roadmap-IUID and passive RFID-that enable 
electronic identification and tracking of equipment and supplies, but 
DOD may face challenges achieving widespread implementation because it 
is unable to fully demonstrate return on investment associated with 
these efforts to the military components that have primary 
responsibility for determining how and where these technologies are 
implemented. Use of IUID and passive RFID was required by memoranda 
issued by the Office of the Under Secretary of Defense (Acquisition, 
Technology, and Logistics) in July 2003 and July 2004,[Footnote 12] 
respectively, and during this time senior DOD officials said that both 
technologies represented critical efforts in support of larger 
improvements to DOD supply chain management. Since then, the Office of 
the Under Secretary of Defense, the military services, DLA, and U.S. 
Transportation Command have developed implementation policy and 
guidance, established working groups and integrated process teams, 
allocated and established funding and infrastructure, and conducted 
pilot projects and initial implementation efforts at several locations. 
However, full implementation of these technologies is still several 
years away under current time frames. In addition, DOD does not gather 
the information needed to fully demonstrate return on investment for 
IUID and passive RFID. Both DOD and OMB have established guidance for 
conducting such analyses. However, DOD does not collect detailed data 
on implementation costs or performance-based outcome measures from 
initial implementation efforts that would enable the department to 
fully quantify the return on investment associated with these two 
technologies. For example, existing cost estimates for the 
implementation of IUID and passive RFID do not include funding that the 
military services and components take from operational accounts to 
support implementation efforts. Additionally, performance measures are 
either not being collected or address the status of implementation 
efforts rather than the effect of implementation. Without the ability 
to fully demonstrate that the benefits of IUID and passive RFID justify 
the costs and efforts involved in their implementation, it may be 
difficult for DOD to gain the support needed from the military 
components to make the significant commitments in resources necessary 
to achieve widespread implementation of these technologies. As a 
result, implementation of these technologies may be impeded and the 
realization of potential benefits to asset visibility DOD expects may 
be delayed. Therefore, we recommend that DOD collect detailed 
information on implementation costs, including costs currently being 
funded from operational accounts, and performance-based implementation 
outcomes for current and future implementation efforts from the 
military components responsible for the implementation of these 
technologies. Based on this data, DOD should analyze the return on 
investment to justify expanded implementation efforts, and should 
determine whether sufficient funding priority has been given to the 
integration of these technologies into the military components' 
respective business processes. 

In its written comments on a draft of this report, DOD concurred with 
our recommendations and identified a number of corrective actions it 
has taken or plans to take. While we believe DOD's actions, for the 
most part, respond to the issues raised in this report, several 
questions remain, including both the methodology and time frame for 
DOD's assessments of the objectives in the roadmap. On the basis of 
DOD's comments, we have modified our fourth recommendation to specify 
that DOD collect information on all costs, including costs currently 
being funded from operational accounts, associated with implementing 
these two technologies. The department's written comments are reprinted 
in appendix II. 

Background: 

DOD is one of the largest and most complex organizations in the world 
to manage effectively. While DOD maintains military forces with 
unparalleled capabilities, it continues to confront pervasive, decades- 
old management problems related to its business operations--which 
include outdated systems and processes--that support these forces. 
These management weaknesses cut across all of DOD's major business 
areas, such as human capital management, including the department's 
national security personnel system initiative; the personnel security 
clearance program; support infrastructure management; business systems 
modernization; financial management; weapon systems acquisition; 
contract management; and last, but not least, supply chain management. 
All of these areas are on our high-risk list for DOD.[Footnote 13] 

Supply chain management consists of processes and activities to 
purchase, produce, and deliver materiel--including ammunition, spare 
parts, and fuel--to military forces that are highly dispersed and 
mobile. DOD relies on defense and service logistics agencies to 
purchase needed items from suppliers using working capital funds. 
Military units then order items from the logistics agencies and pay for 
them with annually-appropriated operations and maintenance funds when 
the requested items--either from inventory or manufacturers--are 
delivered to the units. 

Since 1990, DOD supply chain management (previously, inventory 
management) has been on our list of high-risk areas needing urgent 
attention because of long-standing systemic weaknesses that we have 
identified in our reports. Our high-risk series reports on federal 
government programs and operations that we have identified, through 
audits and investigations, as being at high risk due to their greater 
vulnerabilities to fraud, waste, abuse, and mismanagement. In recent 
years, we also have identified high-risk areas to focus on the need for 
broad-based transformations to address major economy, efficiency, or 
effectiveness challenges. The high-risk series serves to identify and 
help resolve serious weaknesses in areas that involve substantial 
resources and provide critical services to the public. 

DOD Has Taken Actions to Improve Supply Chain Management: 

DOD has taken a number of steps to improve supply chain management in 
the past several years, including preparing strategic planning 
documents and experimenting with a new way to manage its logistics 
portfolio.[Footnote 14] In 2005, the Under Secretary of Defense 
(Acquisition, Technology, and Logistics)[Footnote 15] released the 
Focused Logistics Roadmap, which presented an "as-is" compendium of 
logistics programs and initiatives and provided a baseline for future 
focused logistics capability analysis and investment within DOD. With 
the release of the "as-is" roadmap, DOD also identified a need for a 
future-oriented "to-be" roadmap. DOD released the "to-be" roadmap, now 
known as the Logistics Roadmap, in July 2008. 

In a separate effort, the Deputy Secretary of Defense began, in 
September 2006, testing a new approach for managing the development of 
joint capabilities and included joint logistics as a test case. This 
concept, capability portfolio management, is an effort to manage groups 
of similar capabilities across the DOD enterprise to improve 
interoperability, minimize capability redundancies and gaps, and 
maximize capability effectiveness. In February 2008, the Deputy 
Secretary of Defense issued a memo[Footnote 16] formalizing the first 
four test cases, including joint logistics, and setting out plans for 
further experimentation with five additional test cases. In that memo, 
the Under Secretary of Defense (Acquisition, Technology, and Logistics) 
was designated the capability portfolio management civilian lead for 
logistics, with U.S. Transportation Command serving as the military 
lead. According to the memo, the capability portfolio managers will 
make recommendations to the Deputy Secretary of Defense and the 
Deputy's Advisory Working Group on capability development issues within 
their respective portfolio. In addition, the memo states that the 
capability portfolio managers have no independent decision-making 
authority and will not infringe on existing statutory authorities. A 
DOD directive, issued in September 2008, established the policy for 
using capability portfolio management to advise the Deputy Secretary of 
Defense and the Heads of the DOD Components on how to optimize 
capability investments across the defense enterprise.[Footnote 17] 

DOD Expects IUID and Passive RFID Will Improve Asset Visibility: 

DOD has identified total asset visibility as a key focus area for 
improving supply chain management. DOD has defined total asset 
visibility as the ability to provide timely and accurate information on 
the location, movement, status and identity of units, personnel, 
equipment and supplies; and the capability to act on that information 
to improve the overall performance of DOD logistics practices. We have 
previously reported on issues associated with DOD's lack of asset 
visibility.[Footnote 18] DOD's latest roadmap includes a number of 
initiatives and programs that involve the implementation of IUID and 
RFID, two technologies that enable electronic identification and 
tracking of equipment and supplies and that DOD expects will improve 
its asset visibility. 

DOD's 2007 Enterprise Transition Plan lists IUID and RFID as enablers 
to achieve the goal of end-to-end materiel visibility in the DOD supply 
chain.[Footnote 19] Specifically, the plan states that IUID enables the 
accurate and timely recording of information on the location, 
condition, status and identity of appropriate tangible personal 
property to ensure efficient and effective acquisition, repair, and 
deployment of items, and states that IUID will contribute to 
improvements in the responsiveness and reliability of the DOD supply 
chain. The plan also states that RFID will improve process efficiencies 
in shipping, receiving, and inventory management, contribute to 
reductions in cycle time, and increase confidence in the reliability of 
the DOD supply chain through increased visibility of the location of an 
item or shipment. 

IUID includes the application of a data matrix through direct 
inscription or placement of a permanent machine-readable label or data 
plate onto an item. The data matrix contains a set of data elements 
that form a unique item identifier. This data matrix identifies an 
individual item distinctly from all other items that DOD buys and owns, 
similar to the vehicle identification number on a car. Items can be 
marked either by the vendor before entering into DOD's inventory, or by 
a DOD component after DOD takes possession of an item. In both cases, 
information about the item and the mark are uploaded to the IUID 
Registry, which is located in Battle Creek, Michigan, and managed by 
the Defense Logistics Agency. The registry serves as the central 
repository for data about all of the items in the DOD inventory that 
have been marked with a UID data matrix. Although the registry is 
intended to contain information about all of the marked items, DOD has 
issued policy indicating that the registry is not to be used as a 
property accountability system or to maintain detailed transaction 
data.[Footnote 20] As part of its IUID initiative, DOD plans to use 
this data to more closely track items and more effectively manage its 
inventory. 

In July 2003, DOD directed that all new solicitations and contracts 
issued on or after January 1, 2004, require the use of IUID for items 
meeting established criteria.[Footnote 21] Additionally, in December 
2004, the IUID policy was updated to require the application of UID to 
legacy items (that is, existing personal property items in inventory 
and operational use).[Footnote 22] In this memo, DOD requested all 
program and item managers plan to complete this marking by the end of 
2010. The number of items this requirement covers is unknown. DOD 
officials estimate it is probably around 100 million; however, they 
stated the actual number of items could be much higher. 

RFID is a data input system that consists of (1) a transponder, 
generally referred to as a tag; (2) a tag reader, also known as an 
interrogator, that reads the tag using a radio signal; (3) centralized 
data processing equipment; and (4) a method of communication between 
the reader and the computer. The reader sends a signal to the tag, 
which prompts the tag to respond with information about the item to 
which it is attached. The information is forwarded to central data 
processing equipment, which can then be used to get detailed 
information about the container or item, such as the shipping date or 
the date received. The information contained in the central data 
processing equipment can provide visibility over inventory items 
throughout the supply chain. DOD's RFID policy, issued on July 30, 
2004, finalizes business rules for implementing two types of RFID tags-
-active and passive. This report focuses on DOD's implementation of 
passive RFID, which is a newer technology than active RFID and less 
well-established in DOD's supply chain. We previously examined DOD's 
implementation of passive RFID in September 2005.[Footnote 23] 

A passive RFID tag is an electronic identification device consisting of 
a chip and an antenna, usually embedded within a "smart" packaging 
label. Passive RFID tags have no battery; they draw power from the 
reader, which sends out electromagnetic waves that induce a current in 
the tag's antenna. Passive RFID readers transmit significant power to 
activate the passive tags and are not currently approved for use on 
ammunition, missiles, or other potentially explosive hazards. 

Primary responsibility for determining how and where to implement IUID 
and RFID, as well as funding the implementation and operations of these 
technologies, resides with DOD components. These costs include the 
purchase of necessary equipment, costs associated with marking and 
tagging items, and changes to automated supply systems. In an effort to 
coordinate the components' efforts to implement various automatic 
identification technologies, DOD designated U.S. Transportation Command 
as the lead functional proponent for RFID and related AIT 
implementation within the DOD supply chain in September 2006. U.S. 
Transportation Command subsequently published an AIT concept of 
operations in June 2007 and an implementation plan for this concept of 
operations in March 2008. Additionally, the Unique Item Identification 
Policy Office was established in 2002 in the Office of the Under 
Secretary of Defense (Acquisition, Technology, and Logistics) to 
develop and implement unified IUID policy across DOD. 

DOD's Logistics Roadmap Documents Numerous Initiatives and Programs, 
but Falls Short of Providing a Comprehensive, Integrated Strategy: 

Although DOD intended that its Logistics Roadmap would provide a 
comprehensive and integrated strategy to address logistics problems 
department-wide,[Footnote 24] we found that the roadmap falls short of 
this goal. The roadmap documents numerous initiatives and programs that 
are under way and organizes these around goals, joint capabilities, and 
objectives. However, the roadmap lacks three elements necessary in a 
comprehensive, integrated strategy which would make it a more useful 
tool for DOD's senior logistics leaders in guiding, measuring, and 
tracking progress toward achieving DOD logistics goals and objectives-
-key stated purposes of the roadmap. First, the roadmap does not 
identify the scope of logistics problems or gaps in logistics 
capabilities, information that could allow the roadmap to serve as a 
basis for establishing priorities to improve logistics and address any 
gaps. Second, the roadmap lacks outcome-based performance measures that 
would enable DOD to assess and track progress toward meeting stated 
goals and objectives. Finally, DOD has not clearly stated how it 
intends to integrate the roadmap into its decision-making processes and 
who will be responsible for this integration. Without a strategy that 
provides a basis for determining priorities and identifying gaps, that 
includes key strategic planning elements, and that is integrated into 
decision-making processes, DOD will have difficulty guiding, measuring, 
and tracking progress toward meeting its logistics goals and objectives 
and providing the visibility needed to fully inform senior decision 
makers of logistic needs and priorities across the department. 

Logistics Roadmap Documents Existing Initiatives and Programs: 

DOD's Logistics Roadmap, released in July 2008, documents numerous 
initiatives and programs that are under way within the department. The 
roadmap includes a total of 56 initiatives and 62 programs, based on 
information submitted by DOD components.[Footnote 25] According to the 
data in the roadmap, the total cost of implementing the initiatives and 
programs from fiscal year 2008 to 2013 is estimated at more than $77 
billion. Table 1 summarizes the initiatives and programs by DOD 
component. 

Table 1: Logistics Initiatives and Programs Documented in the Logistics 
Roadmap (Dollars in millions): 

DOD component: Air Force; 
Initiatives: 8; 
Programs: 10; 
Estimated cost (FY08-13): $32,419. 

DOD component: Army; 
Initiatives: 8; 
Programs: 37; 
Estimated cost (FY08-13): $27,312. 

DOD component: Defense Logistics Agency; 
Initiatives: 4; 
Programs: 0; 
Estimated cost (FY08-13): $836. 

DOD component: Marine Corps; 
Initiatives: 4; 
Programs: 3; 
Estimated cost (FY08-13): $341. 

DOD component: Navy; 
Initiatives: 6; 
Programs: 10; 
Estimated cost (FY08-13): $14,744. 

DOD component: Office of the Assistant Deputy Under Secretary of 
Defense (Maintenance Policy and Programs); 
Initiatives: 4; 
Programs: 0; 
Estimated cost (FY08-13): $3. 

DOD component: Office of the Assistant Deputy Under Secretary of 
Defense (Supply Chain Integration); 
Initiatives: 5; 
Programs: 0; 
Estimated cost (FY08-13): $647. 

DOD component: Office of the Assistant Deputy Under Secretary of 
Defense (Transportation Policy); 
Initiatives: 6; 
Programs: 0; 
Estimated cost (FY08-13): $1. 

DOD component: U.S. Joint Forces Command; 
Initiatives: 5; 
Programs: 0; 
Estimated cost (FY08-13): $27. 

DOD component: U.S. Transportation Command; 
Initiatives: 6; 
Programs: 2; 
Estimated cost (FY08-13): $870. 

DOD component: Total; 
Initiatives: 56; 
Programs: 62; 
Estimated cost (FY08-13): $77,200. 

Source: GAO analysis of DOD Logistics Roadmap. 

[End of table] 

DOD Identified a Need for the Logistics Roadmap in 2005: 

DOD initially began to develop the Logistics Roadmap in response to 
direction from the Under Secretary of Defense (Acquisition, Logistics, 
and Technology) in 2005. In the memorandum accompanying the 2005 
Focused Logistics Roadmap, the Under Secretary directed the creation of 
a follow-on "to be" roadmap. While the Under Secretary recognized that 
the Focused Logistics Roadmap provided a baseline of programs and 
initiatives for future focused logistics capability analysis and 
investment and documented significant resource investment in logistics 
programs and initiatives, he also recognized that the roadmap indicated 
that key focused logistics capabilities would not be achieved by 2015. 
As a result, he expected the "to be" roadmap to present credible 
options for achieving focused logistics capabilities for consideration 
by the Defense Logistics Board. The "to be" roadmap eventually became 
the Logistics Roadmap, released in July 2008 by the Deputy Under 
Secretary of Defense (Logistics and Materiel Readiness). Officials in 
the Office of the Secretary of Defense (OSD) characterized the "to be" 
roadmap as an effort to portray where the department was headed in the 
logistics area, how it would get there, and what progress was being 
made toward achieving its objectives. Further, they said the roadmap 
would institutionalize a continuous assessment process linking ongoing 
capability development, program reviews, and budgeting. DOD officials 
also testified that the roadmap would include a detailed depiction, 
over time, of existing, planned, and desired capabilities to 
effectively project and sustain the joint force.[Footnote 26] Moreover, 
they said the roadmap would establish a coherent framework for 
achieving the best and most cost-effective joint logistics outcomes to 
support the warfighter. We have emphasized the importance of DOD 
developing an overarching logistics strategy that will guide the 
department's logistics planning efforts and have stated that without an 
overarching logistics strategy, the department will be unable to most 
economically and efficiently support the needs of the warfighter. 

Although DOD originally intended for the roadmap to be issued in 
February 2007, the department suspended its development while it tested 
its new capability portfolio management concept. Joint logistics was 
one of the capability areas included in this test. In November 2007, 
the Office of Supply Chain Integration, under the direction of the 
Deputy Under Secretary of Defense (Logistics and Materiel Readiness), 
began the formal development of the roadmap by coordinating with the 
military services, combatant commands, the Defense Logistics Agency, 
and other OSD offices to gather information on their logistics 
initiatives and programs.[Footnote 27] The initial data call from the 
Deputy Under Secretary requested that DOD components identify logistics-
related initiatives (e.g., RFID and the Single Army Logistics 
Enterprise) and acquisition programs of record (e.g., C-130J Hercules 
and Fuel System Supply Point) that are critical to successfully meeting 
logistics capability needs. The Deputy Under Secretary requested 
additional information about the initiatives and programs, such as a 
description, expected benefits and impact, implementation milestones, 
and resources. 

Logistics Roadmap is Organized around Goals, Capabilities, and 
Objectives: 

OSD, in presenting information on the department's logistics 
initiatives and programs, structured the roadmap around three goals, 
three joint capabilities, and 22 objectives. The objectives in the 
roadmap are aligned to three logistics goals that were enumerated in 
DOD's Guidance for Development of the Force, a department-wide 
strategic planning document that followed the 2006 Quadrennial Defense 
Review. The three goals are as follows: 

* unity of effort - the synchronization and integration of joint, 
multinational, interagency, and non-governmental logistics capabilities 
focused on the joint force commander's intent; 

* visibility - having assured access to information about logistics 
processes, resources, and requirements in order to gain the knowledge 
necessary to make effective decisions; and: 

* rapid and precise response - the ability to meet the constantly 
changing logistics needs of the joint force. 

The objectives are aligned further with three joint capability areas 
that DOD has identified for joint logistics.[Footnote 28] These joint 
capabilities are as follows: 

* supply - the ability to identify and select supply sources, schedule 
deliveries, receive, verify and transfer product, and authorize 
supplier payments; the ability to see and manage inventory levels, 
capital assets, business rules, supplier networks and agreements, as 
well as assessment of supplier performance; 

* maintain - the ability to manufacture and retain or restore materiel 
in a serviceable condition; and: 

* deployment and distribution - the ability to plan, coordinate, 
synchronize, and execute force movement and sustainment tasks in 
support of military operations, including the ability to strategically 
and operationally move forces and sustainment to the point of need and 
operate the Joint Deployment and Distribution Enterprise. 

The 22 objectives were developed by OSD and each is generally aligned 
to both a goal and a joint capability, although some objectives are 
aligned with multiple joint capabilities. OSD provided guidance to the 
participating DOD components on how to align their initiatives and 
programs with the objectives. 

Table 2 summarizes the organization of the roadmap, including the 
number of initiatives and programs linked to each objective. 

Table 2: Organization of the Logistics Roadmap: 

Goal: Unity of effort; 
Objective: Efficient procurement processes; 
Joint capability areas: Supply: [Check]; 
Joint capability areas: Maintain: [Empty]; 
Joint capability areas: Deployment and distribution: [Empty]; 
Number of initiatives and programs: 9. 

Goal: Unity of effort; 
Objective: Effective procurement processes; 
Joint capability areas: Supply: [Check]; 
Joint capability areas: Maintain: [Empty]; 
Joint capability areas: Deployment and distribution: [Empty]; 
Number of initiatives and programs: 8. 

Goal: Unity of effort; 
Objective: Align maintenance operations metrics with warfighter 
outcomes; 
Joint capability areas: Supply: [Empty]; 
Joint capability areas: Maintain: [Check]; 
Joint capability areas: Deployment and distribution: [Empty]; 
Number of initiatives and programs: 7. 

Goal: Unity of effort; 
Objective: Use commercial transportation resources to the maximum 
extent practicable, integrated with organic resources; 
Joint capability areas: Supply: [Empty]; 
Joint capability areas: Maintain: [Empty]; 
Joint capability areas: Deployment and distribution: [Check]; 
Number of initiatives and programs: 16. 

Goal: Unity of effort; 
Objective: Adopt enterprise-wide metrics that promote common goals and 
interoperability; 
Joint capability areas: Supply: [Check]; 
Joint capability areas: Maintain: [Check]; 
Joint capability areas: Deployment and distribution: [Check]; 
Number of initiatives and programs: 31. 

Goal: Unity of effort; 
Objective: Develop and implement a DOD Logistics Human Capital 
Strategic Plan for a competency-based enterprise logistics workforce; 
Joint capability areas: Supply: [Check]; 
Joint capability areas: Maintain: [Check]; 
Joint capability areas: Deployment and distribution: [Check]; 
Number of initiatives and programs: Visibility: 3. 

Goal: Visibility; 
Objective: Visibility into customer materiel requirements and available 
resources to meet those needs; 
Joint capability areas: Supply: [Check]; 
Joint capability areas: Maintain: [Empty]; 
Joint capability areas: Deployment and distribution: [Empty]; 
Number of initiatives and programs: 26. 

Goal: Visibility; 
Objective: Visibility of emerging maintenance workload and in-process 
resources to meet customer requirements; 
Joint capability areas: Supply: [Empty]; 
Joint capability areas: Maintain: [Check]; 
Joint capability areas: Deployment and distribution: [Empty]; 
Number of initiatives and programs: 18. 

Goal: Visibility; 
Objective: Visibility of in-transit, in-storage, and in-process units 
and materiel for optimized movement, planning, and execution; 
Joint capability areas: Supply: [Empty]; 
Joint capability areas: Maintain: [Empty]; 
Joint capability areas: Deployment and distribution: [Check]; 
Number of initiatives and programs: 32. 

Goal: Visibility; 
Objective: Implement information technology strategies for improved 
visibility and interoperability; 
Joint capability areas: Supply: [Check]; 
Joint capability areas: Maintain: [Check]; 
Joint capability areas: Deployment and distribution: [Check]; 
Number of initiatives and programs: 16. 

Goal: Visibility; 
Objective: Enable a single authoritative data set for informed 
logistics decision making; 
Joint capability areas: Supply: [Check]; 
Joint capability areas: Maintain: [Check]; 
Joint capability areas: Deployment and distribution: [Check]; 
Number of initiatives and programs: 15. 

Goal: Rapid and precise response; 
Objective: Affordable availability in both peacetime and war; 
Joint capability areas: Supply: [Check]; 
Joint capability areas: Maintain: [Empty]; 
Joint capability areas: Deployment and distribution: [Empty]; 
Number of initiatives and programs: 28. 

Goal: Rapid and precise response; 
Objective: Retrograde and disposal processes aligned to department's 
needs; 
Joint capability areas: Supply: [Check]; 
Joint capability areas: Maintain: [Empty]; 
Joint capability areas: Deployment and distribution: [Empty]; 
Number of initiatives and programs: 13. 

Goal: Rapid and precise response; 
Objective: Identify and sustain requisite core maintenance capability; 
Joint capability areas: Supply: [Empty]; 
Joint capability areas: Maintain: [Check]; 
Joint capability areas: Deployment and distribution: [Empty]; 
Number of initiatives and programs: 10. 

Goal: Rapid and precise response; 
Objective: Sustain a highly capable, mission-ready maintenance 
workforce; 
Joint capability areas: Supply: [Empty]; 
Joint capability areas: Maintain: [Check]; 
Joint capability areas: Deployment and distribution: [Empty]; 
Number of initiatives and programs: 9. 

Goal: Rapid and precise response; 
Objective: Ensure an adequate infrastructure to execute assigned 
maintenance workload; 
Joint capability areas: Supply: [Empty]; 
Joint capability areas: Maintain: [Check]; 
Joint capability areas: Deployment and distribution: [Empty]; 
Number of initiatives and programs: 9. 

Goal: Rapid and precise response; 
Objective: Continuously improve availability, quality, flow days, and 
cost of maintenance operations worldwide; 
Joint capability areas: Supply: [Empty]; 
Joint capability areas: Maintain: [Check]; 
Joint capability areas: Deployment and distribution: [Empty]; 
Number of initiatives and programs: 20. 

Goal: Rapid and precise response; 
Objective: In conjunction with Systems Engineering, become the advocate 
for the design and production of reliable weapons systems and 
equipment; 
Joint capability areas: Supply: [Empty]; 
Joint capability areas: Maintain: [Check]; 
Joint capability areas: Deployment and distribution: [Empty]; 
Number of initiatives and programs: 9. 

Goal: Rapid and precise response; 
Objective: Establish a seamless process between deployment and 
sustainment phases; 
Joint capability areas: Supply: [Empty]; 
Joint capability areas: Maintain: [Empty]; 
Joint capability areas: Deployment and distribution: [Check]; 
Number of initiatives and programs: 33. 

Goal: Rapid and precise response; 
Objective: Position stock and warehouses to provide effective and 
efficient readiness; 
Joint capability areas: Supply: [Empty]; 
Joint capability areas: Maintain: [Empty]; 
Joint capability areas: Deployment and distribution: [Check]; 
Number of initiatives and programs: 18. 

Goal: Rapid and precise response; 
Objective: Optimize transportation network; 
Joint capability areas: Supply: [Empty]; 
Joint capability areas: Maintain: [Empty]; 
Joint capability areas: Deployment and distribution: [Check]; 
Number of initiatives and programs: 46. 

Goal: Rapid and precise response; 
Objective: Drive acquisition processes to focus on sustainment key 
performance parameter (KPP) and key system attributes (KSA), as well as 
implementation of Performance Based Logistics (PBL) strategies; 
Joint capability areas: Supply: [Check]; 
Joint capability areas: Maintain: [Check]; 
Joint capability areas: Deployment and distribution: [Check]; 
Number of initiatives and programs: 13. 

Source: GAO analysis of DOD Logistics Roadmap. 

Note: Initiatives and programs could be linked to more than one 
objective. 

[End of table] 

OSD Intends for the Logistics Roadmap to Initiate New Improvement 
Efforts: 

OSD intends for the Logistics Roadmap to serve as a starting point for 
improvement efforts across the department. In the message from the 
Deputy Under Secretary of Defense (Logistics and Materiel Readiness), 
included at the beginning of the roadmap, the Deputy Under Secretary 
explained that the roadmap initiates the process of defining the 
department's logistics capability portfolio in terms of initiatives and 
programs, and documents specific actions under way to achieve logistics 
goals and supporting objectives, examining them from the perspective of 
experts who must advise senior leaders. In addition, he stated that the 
roadmap begins an evolutionary process of linking logistics initiatives 
and program performance assessments to identifiable and measurable 
outcomes. Finally, he explained that the roadmap is intended to be part 
of an ongoing process of assessment and feedback linked to the 
Quadrennial Defense Review and to the department's Planning, 
Programming, Budgeting, and Execution cycles, and to be a tool for the 
DOD logistics community to use in guiding, measuring, and tracking 
progress of the ongoing transformation of logistics capabilities. 

OSD also expects to update and improve the roadmap periodically. The 
Office of Supply Chain Integration, under the Deputy Under Secretary of 
Defense (Logistics and Materiel Readiness), stated that an updated 
roadmap may be completed in the summer of 2009. According to the Deputy 
Under Secretary's message in the roadmap, future updates to the roadmap 
will incorporate new initiatives and programs, as well as results from 
capability-based assessments, joint experiments, and joint technology 
demonstrations; report progress toward achieving logistics capability 
performance targets; and help connect capability performance targets to 
current and planned logistics investment for an overarching view of 
DOD's progress toward transforming logistics. 

Roadmap Lacks Key Elements Needed by Decision Makers to Identify and 
Address Logistics Problems across DOD: 

In its current form, the Logistics Roadmap lacks three elements that 
are needed in order for it to serve as a more useful tool for DOD's 
senior logistics leaders in guiding, measuring, and tracking progress 
toward achieving DOD logistics goals and objectives--one of the key 
stated purposes of the roadmap. Specifically, the roadmap does not 
identify the scope of DOD logistics problems and capability gaps and 
lacks outcome-oriented performance measures. Additionally, DOD has not 
clearly stated how the roadmap will be integrated into its decision- 
making processes and who will be responsible for this integration. DOD 
officials stated that they plan to remedy some of these weaknesses in 
their future efforts to update and expand the roadmap. 

Roadmap Does Not Identify Scope of Logistics Problems and Capability 
Gaps: 

The Logistics Roadmap does not identify the scope of DOD's logistics 
problems or gaps in logistics capabilities. In interviews prior to 
developing the roadmap, DOD officials responsible for the roadmap said 
that it would identify the scope of DOD's logistics problems and gaps 
in logistics capabilities. This information, if included, could allow 
the roadmap to serve as a basis for logistics decision makers to 
establish priorities for formulating, funding, and implementing 
corrective actions. However, the current roadmap does not include a 
discussion about department-wide or DOD component-specific logistics 
problems. For example, the roadmap does not discuss logistics problems 
encountered during the ongoing operations in Iraq and Afghanistan. 
Similarly, while the roadmap links initiatives and programs to three 
joint capabilities, it does not indicate where there are gaps in either 
current or desired capabilities. Without addressing the scope of 
logistics problems and gaps in capabilities, the roadmap's utility is 
limited and it does not fully inform senior decision makers of the 
warfighters' logistics needs or provide them with a basis for 
determining priorities to meet those needs by filling capability gaps. 

Addressing logistics capabilities is a core function of the roadmap. 
For example, according to the roadmap, it initiates the process of 
defining the department's logistics capability portfolio in terms of 
initiatives and programs, and provides a foundation for future 
logistics capability assessments and investment analyses. In addition, 
the roadmap states that the Guidance for the Development of the Force, 
from which the roadmap's three goals are drawn, directs DOD to focus on 
better integrating its logistics capabilities and processes to meet the 
demands of an emerging operational environment. The roadmap also states 
that it will allow the department's senior leaders to more effectively 
advocate for the logistics initiatives and programs most critical for 
providing globally responsive, operationally precise, and cost- 
effective logistics support for the warfighter. In addition, DOD 
officials stated that the roadmap should be of use in helping decision 
makers as they determine whether current programs and initiatives are 
sufficient to close any capability gaps that may be identified. 

DOD officials have begun a series of assessments for 3 of the 22 
objectives in the roadmap and directed DOD components to develop these 
assessments to identify capability gaps, shortfalls, and redundancies 
and to recommend solutions.[Footnote 29] DOD views such assessments as 
essential for providing a strategic view of the department's progress 
toward achieving the goals and objectives of the roadmap. DOD officials 
said that the results of all 22 of these assessments will be included 
in the next version of the roadmap, tentatively scheduled for release 
in the summer of 2009. Until the assessments for each of the 22 
objectives are completed, the roadmap will not begin to provide senior 
decision makers with a basis for determining priorities for developing 
and maintaining logistics capabilities to support the warfighter. 

Roadmap Lacks Outcome-Based Performance Measures: 

The roadmap lacks outcome-based performance measures that would enable 
DOD to assess and track progress toward meeting stated goals and 
objectives. Prior to its development, OSD officials said the roadmap 
would allow the department to monitor progress toward achieving its 
logistics objectives, and include specific performance goals, programs, 
milestones, resources, and metrics to guide improvements in supply 
chain management and other areas of DOD logistics. Based on interviews 
with OSD officials prior to the completion of the roadmap, we 
previously reported that the roadmap would include performance measures 
and link objective, quantifiable, and measurable performance targets to 
outcomes and logistics capabilities. However, we found that the roadmap 
does not include outcome-based performance measures of the objectives, 
which would allow DOD to measure progress toward meeting these stated 
objectives. While many of the individual initiatives include 
performance goals or implementation milestones, the objectives lack 
such measures. We also found that although the objectives were 
categorized by DOD-wide logistics goals, they were not linked to those 
goals with performance or cost metrics. The lack of outcome-based 
performance measures makes it difficult to measure progress on how the 
objectives are meeting the stated goals. 

An official from the Office of Supply Chain Integration, responsible 
for leading the development of the roadmap, stated that performance 
measures or assessments of the objectives to measure progress were not 
included in this version of the roadmap because of a tight schedule for 
its completion and release. As noted previously, DOD decided to delay 
development of the roadmap until the capability portfolio management 
test cases had been completed; however, they had committed to Members 
of Congress that the roadmap would be released by the summer of 2008. 
Within this time frame, officials said they were unable to address 
performance measures or assessments. They stated that future versions 
of the roadmap will include these elements, and assessments to measure 
progress toward achieving 3 of the 22 objectives were ongoing at the 
time we conducted our audit work. In October 2008, we requested 
descriptions of the assessment approach and methodology; however, the 
DOD official coordinating the assessments indicated that the 
assessments were a work in progress and the approach had not been 
finalized. 

We have emphasized the importance of performance measures as management 
tools for all levels of an agency, including the program or project 
level, to track an agency's progress toward achieving goals, and to 
provide information on which to base organizational and management 
decisions. In a previous review of the Supply Chain Management 
Improvement plan, we found that many of the initiatives in the plan, as 
well as the three focus areas these initiatives were to address, lacked 
outcome-focused performance measures, limiting DOD's ability to fully 
demonstrate the results achieved through its plan. We also found that 
the plan lacked cost metrics that might show efficiencies gained 
through these supply chain improvement efforts, either at the 
initiative level or overall. Without outcome-focused performance 
measures and cost metrics, DOD is unable to fully track progress toward 
meeting its goals for improving logistics from the component to the 
department level, limiting the department's ability to fully 
demonstrate results achieved through the roadmap. Increasing DOD's 
focus on measurable outcomes will enable the department's internal and 
external stakeholders, including OMB and Congress, to track the interim 
and long-term success of its initiatives and help DOD determine if it 
is meeting its goals of achieving more effective and efficient supply 
chain management. Performance metrics are critical for demonstrating 
progress toward achieving results and providing information on which to 
base organizational and management decisions. Inadequate information on 
performance may be an impediment to improving program efficiency and 
effectiveness. 

Roadmap Has Not Been Integrated into Decision-Making Processes: 

DOD has not clearly stated how it intends to integrate the roadmap into 
its decision-making processes and who will be responsible for this 
integration. For example, DOD has not shown how the roadmap could shape 
logistics budgets developed by individual DOD components or address 
joint logistics needs through the new capability portfolio management 
process. According to the Deputy Under Secretary's message at the 
beginning of the roadmap, the document will be part of on ongoing 
assessment and feedback process linked to the Quadrennial Defense 
Review and the Planning, Programming, Budgeting, and Execution cycles 
and will support senior leader decision making in a constrained 
resource environment. However, on the basis of our review, we found 
that DOD has not clearly stated the manner in which the roadmap will be 
formally or informally used within these processes, how it will be used 
to inform senior decision makers, and who will be responsible for its 
implementation. In our prior work on DOD's transformation efforts, we 
have emphasized the importance of establishing clear leadership and 
accountability for achieving transformation results, as well as having 
a formal mechanism to coordinate and integrate transformation efforts. 
[Footnote 30] In the absence of clear leadership, accountability, and a 
formal implementation mechanism, DOD may have difficulty in resolving 
differences among competing priorities, directing resources to the 
highest priorities, and ensuring progress if changes in senior 
personnel occur. 

DOD officials explained that procedures for how DOD officials use the 
roadmap within these existing processes have not been formalized, but 
provided various scenarios in which the assessments associated with the 
roadmap's objectives could possibly be used. They stated that upon 
completion of the assessments for the individual objectives, the 
assessments could be inserted into program and budget reviews, and 
could be used to inform the development of future versions of the 
Quadrennial Defense Review and the Guidance for the Development of the 
Force. Additionally, an official with the Office of Supply Chain 
Integration responsible for leading the development of the roadmap 
stated the assessments could be incorporated into DOD's budget process 
to document the current status of initiatives and programs, and could 
aid in identifying redundancies across DOD. DOD officials have stated 
various ways in which the roadmap and its associated assessments could 
be useful to senior decision makers, but they have not clearly defined 
how the products will be used to inform the Quadrennial Defense Review, 
Guidance for the Development of the Force, and the budget process. 

Some DOD component officials who participated in the development of the 
roadmap said it could be useful in the capability portfolio management 
process. However, DOD officials stated that because capability 
portfolio management was still new and had not been formalized at the 
time the roadmap was under development, they were not sure how it would 
be implemented and how or if the roadmap could be useful in this 
process. As mentioned previously, the roadmap defines the logistics 
portfolio and in light of the recent formalization of the joint 
logistics capability portfolio, the roadmap could serve as the starting 
point to assist the capability portfolio managers with their 
responsibilities. The capability portfolio managers for joint 
logistics, the Under Secretary of Defense (Acquisition, Technology and 
Logistics) and the Commander, U.S. Transportation Command, are 
responsible for providing recommendations or advice to appropriate DOD 
decision makers and forums regarding integration, coordination, and 
synchronization of capability requirements for capability investments, 
and for evaluating capability demand against resource constraints, 
identifying and assessing risks, and suggesting capability trade-offs 
within their portfolio to the heads of the DOD components. Given that 
capability portfolio management has been recently formalized, it 
remains to be seen how the capability portfolio managers will implement 
the process and what types of information they will need to fulfill 
their responsibilities. 

A comprehensive integrated strategy to address logistics problems 
department-wide is critical, in part, because of the diffuse 
organization of DOD logistics. Responsibility for logistics within DOD 
is spread across multiple components with separate funding and 
management of logistics resources and systems. For example, the Under 
Secretary of Defense (Acquisition, Technology and Logistics), as part 
of OSD, serves as the principal staff element of the Secretary of 
Defense in the exercise of policy development, planning, resource 
management, fiscal, and program evaluation responsibilities. The 
Secretary of Defense designated the Under Secretary of Defense as the 
department's Defense Logistics Executive with authority to address 
logistics and supply chain issues. However, each of the military 
services is separately organized under its own secretary and functions 
under the authority, direction, and control of the Secretary of 
Defense. The secretaries of the military departments are responsible 
for organizing, training, and equipping their forces under Title 10 of 
the United States Code. DOD policy states that each of the secretaries 
is directed to prepare and submit budgets for their respective 
departments, justifying before the Congress budget requests, as 
approved by the President; and to administer the funds made available 
for maintaining, equipping, and training their forces.[Footnote 31] As 
we have previously reported, the diffuse organization of DOD's 
logistics operations complicates DOD's ability to adopt a coordinated 
and comprehensive approach to joint logistics.[Footnote 32] Until the 
roadmap provides a basis for determining priorities and identifying 
gaps, incorporates performance measures, and is integrated into 
decision-making processes, it is likely to be of limited use, beyond 
the current processes and information available, to senior DOD decision 
makers as they seek to improve supply chain management. 

DOD May Face Challenges Achieving Widespread Implementation of IUID and 
Passive RFID: 

DOD has taken several steps toward implementing IUID and passive RFID 
but may face challenges achieving widespread implementation because it 
is unable to fully demonstrate the return on investment associated with 
these efforts to the military components that have primary 
responsibility for determining how and where these technologies are 
implemented. DOD and its military components have made some progress 
adopting these two technologies. These efforts include developing 
policy and guidance, establishing working groups and integrated process 
teams to share information and lessons learned both within and across 
the military components, providing funding to support implementation, 
and establishing pilot projects and initial implementation efforts at 
several locations. Despite these signs of progress, full implementation 
of IUID and passive RFID is still several years away under current time 
frames. At present, DOD is not able to fully quantify the return on 
investment associated with these technologies because it does not 
uniformly collect complete information on both the costs and benefits 
associated with implementing IUID and passive RFID. Additionally, 
effective integration of these technologies with supply chain processes 
and information systems is challenging and will require the military 
components to make significant commitments of funding and staff 
resources. Without the ability to fully demonstrate that the benefits 
of IUID and passive RFID justify the costs and efforts involved, DOD is 
likely to face difficulty gaining the support needed from the military 
components to overcome challenges associated with implementation. 

DOD Efforts to Implement IUID and Passive RFID Include Issuing 
Guidance, Sharing Information, Allocating Resources, and Conducting 
Pilot Projects: 

DOD and its military components have taken several steps to facilitate, 
support, and undertake the implementation of IUID and passive RFID. Use 
of IUID and passive RFID was required by memoranda issued by the Office 
of the Under Secretary of Defense (Acquisition, Technology, and 
Logistics) in July 2003 and July 2004, respectively, and DOD and its 
military components have periodically issued policy and guidance to 
manage and inform users regarding the implementation of both 
technologies. For example, U.S. Transportation Command, the lead 
functional proponent for the implementation of AIT, including IUID and 
passive RFID, released an AIT Concept of Operations (CONOPS) in June 
2007 and an AIT Implementation Plan in March 2008.[Footnote 33] The 
CONOPS and Implementation Plan provide information on DOD's future 
vision for AIT use across the supply chain and are intended to 
establish a baseline standard for AIT use and implementation throughout 
DOD. Guidance on these technologies has also been published by DOD. For 
example, DOD has provided guidance concerning the use of IUID to 
support improved maintenance and materiel management processes, as well 
as detailed information on the technology and the mechanics of its 
implementation.[Footnote 34] 

DOD has taken other actions to support and facilitate the 
implementation of IUID and passive RFID. DOD established a UID Policy 
Office and designated staff resources toward RFID implementation in the 
Office of Supply Chain Integration. In addition to helping disseminate 
policy and guidance, the two offices play a role in promoting the 
technologies and educating the military components regarding 
implementation. For example, the offices have established Web sites for 
suppliers, program managers, and others involved in implementation 
efforts to access information on the technologies, including 
specifications and requirements, tutorials and trainings, guidance for 
implementation, and updates to existing policy and guidance. 
Additionally, the UID Policy Office holds biannual UID Forums to 
provide practical guidance to help educate military program managers 
and DOD contractors regarding IUID implementation, and the Supply Chain 
Integration Office holds annual RFID summits to highlight best 
practices across the department and provide a forum for discussion of 
RFID technologies and their potential applications to supply chain 
management. 

In addition to guidance developed at the department level, the military 
components are developing service-specific implementation plans for 
IUID and passive RFID. As of October 2008, the Army had issued a 
service-wide strategy for IUID implementation, and the Marine Corps and 
Air Force had both completed draft IUID implementation plans. While the 
Navy does not have a formal service-wide IUID implementation plan, a 
Navy official responsible for managing IUID implementation stated its 
draft serialized item management[Footnote 35] implementation plan 
contains information pertaining to DOD IUID guidance and requirements. 
For passive RFID, the Navy and Air Force had completed plans for 
implementation of the technology, the Army had completed a draft 
implementation plan, and the Marine Corps was in the process of 
updating its existing RFID implementation plan to incorporate 
information from the DOD AIT CONOPS. 

Efforts to implement the technologies also include information sharing 
across DOD and within its military components. DOD and its military 
components have established integrated process teams and working groups 
to define objectives and establish implementation timelines, identify 
common implementation challenges and potential solutions, and 
facilitate stakeholder communications. These teams focus on several 
areas related to implementation and operate both within and across the 
military components. For example, U.S. Transportation Command formed 
multiple integrated process teams dedicated to different segments of 
supply and distribution operations during the development of its AIT 
Implementation Plan, which encompasses both IUID and passive RFID. 
Additionally, the UID Policy Office has established and participated in 
a number of working groups to support the development and 
implementation of IUID policy. Integrated process teams and working 
groups also operate within the military components. For example, in 
September 2007, the Navy formed an IUID integrated process team whose 
four working groups meet monthly to discuss metrics for measuring 
implementation progress, technical solutions for implementation 
challenges, process mapping of implementation efforts, and internal and 
external communications regarding implementation. In December 2007, the 
Army also formed an IUID integrated process team, which developed the 
Army-wide implementation strategy for IUID and continues to meet to 
share lessons learned and discuss challenges related to implementation. 

The military components, DLA, and U.S. Transportation Command have 
funded implementation of both IUID and passive RFID through various 
mechanisms and to varying degrees. For instance, the Army funds AIT, 
which includes both IUID and passive RFID, through its regular budget 
process. Army officials estimated that, in fiscal years 2007 and 2008, 
the Army has spent $22.5 million on the implementation of IUID and has 
requested an additional $15 million per year for fiscal years 2009 
through 2013. For passive RFID, Army officials estimated that the Army 
spent $2.2 million between the third quarters of fiscal year 2006 and 
2008. Other services, however, do not uniformly provide designated 
funding for implementation. For example, Navy officials stated that 
implementation of IUID within the Navy is an unfunded mandate and 
funding for implementation must be taken out of operational budgets. 
Air Force officials also stated that funding for implementation is 
taken out of operational budgets by program managers. Additionally, DLA 
and U.S. Transportation Command funded a project that spanned multiple 
military components. 

Pilot projects and initial implementation efforts for both IUID and 
passive RFID are under way at multiple locations throughout the 
military components. Table 3 lists examples of pilot projects and 
initial implementations that DOD officials identified as important 
ongoing efforts. 

Table 3: Examples of DOD's IUID and Passive RFID Pilot Projects and 
Initial Implementations (as of September 2008): 

Robotic Systems Joint Project Office - Joint Robot Repair Fielding 
Division; 
IUID or passive RFID: IUID; 
Component: Army/Marine Corps; 
Location: 14 Joint Robot Repair Fielding Centers (both CONUS and OCONUS 
locations); 
Description: Assign and apply unique item identifiers to all inventory 
and integrate their use into maintenance operations. 

Aviation and Missile Command - Integrated Materiel Management Center; 
IUID or passive RFID: IUID; 
Component: Army; 
Location: Redstone Army Arsenal, Huntsville, Ala.; 
Description: Facilitate data management of IUID implementation 
throughout the command. 

Space and Naval Warfare Systems Command - Extremely High Frequency Lab; 
IUID or passive RFID: IUID; 
Component: Navy; 
Location: San Diego, Calif.; 
Description: Assign and apply unique item identifiers to inventory for 
use in inventory management. 

Alaska RFID Implementation Project; 
IUID or passive RFID: Passive RFID; 
Component: DLA/Army/Air Force/U.S. Transportation Command; 
Location: San Joaquin DDC, Calif.; Travis AFB, Calif.; Fort Richardson, 
Alaska; Elmendorf AFB, Alaska; 
Description: Replicate full supply process using passive RFID. Apply 
passive RFID tags to shipments and track and receive shipments with 
passive RFID technology. 

Naval Supply Systems Command --Bangor RFID Evaluation; 
IUID or passive RFID: Passive RFID; 
Component: Navy/DLA; 
Location: Naval Base Kitsap, Bangor, Wash.; 
Description: Receive shipments from San Joaquin and Susquehanna Defense 
Distribution Centers tagged with passive RFID technology and 
accompanying advanced shipping notices. 

Defense Distribution Centers; 
IUID or passive RFID: Passive RFID; 
Component: DLA; 
Location: All 17 CONUS Defense Distribution Centers, as well as those 
on Hawaii and Guam; 
Description: Enable Defense Distribution Centers to read passive RFID 
tags attached to shipments received from suppliers and to apply passive 
RFID tags on shipments to DOD activities and units. 

Source: GAO analysis. 

[End of table] 

The implementation efforts listed in the table vary in scope, in terms 
of both the number of components and installations involved and the 
amount of resources required for full implementation. For example, the 
Alaska RFID Implementation project, which aimed to test and evaluate 
passive RFID within the DOD supply chain in order to streamline supply 
chain operations, spanned multiple military components and cost more 
than $27 million to implement.[Footnote 36] As a part of this pilot, 
passive RFID infrastructure was installed at DLA, Army, and Air Force 
locations in Alaska and California. Other implementation efforts, 
however, have been smaller and less resource intensive. For instance, 
the Robotic Systems Joint Project Office, which works to procure, 
field, sustain, and support ground robotics for the Army and the Marine 
Corps, implemented IUID at its Joint Robot Repair Fielding division at 
a cost of approximately $400,000 during fiscal years 2007 and 2008. The 
project office established a process for marking new acquisitions to 
its inventory with item unique identifiers and, to maximize the 
benefits of implementation, integrated IUID into its existing supply 
chain management data system. 

Full Implementation of IUID and Passive RFID Remains Several Years 
Away: 

Full implementation of IUID and passive RFID remains several years away 
under current time frames. Although DOD initially projected that all 
items currently in its inventory required to be marked under IUID 
guidance would be marked with unique item identifiers by fiscal year 
2010, officials stated that this target will not be met. According to 
DOD officials, as of October 2008 approximately 4 percent of the 
estimated 100 million items currently in DOD inventory have been marked 
with item unique identifiers. DOD officials stated that, at the current 
pace of implementation, full marking of legacy items will take many 
additional years. For example, the Air Force estimates that it will 
take until fiscal year 2021 to complete marking parts already in 
inventory with item unique identifiers. Since 2005, Air Force officials 
estimated that the Air Force has marked 10,000 items in its inventory 
while the total number of Air Force items required to be marked exceeds 
12.5 million. 

The DOD AIT Implementation Plan estimates that the implementation of 
technologies, including passive RFID will be completed in 2015; 
however, current time frames indicate that it may take longer to fully 
implement the technology. Initial pilots of passive RFID called for in 
the DOD AIT Implementation Plan are under way at selected locations in 
each military service, but a DOD official responsible for coordinating 
passive RFID implementation across the department stated that the 
services are still in the process of gathering baseline information and 
the technology will not be fully functional at these locations until 
the end of fiscal year 2009. Additionally, according to the DOD AIT 
Implementation Plan, updated automatic information systems needed to 
support passive RFID and IUID may not be functional until after 2015. 
Updates to these systems are necessary in order for the components to 
derive benefit from these initiatives. Furthermore, while 
infrastructure for reading passive RFID tags is in place in multiple 
locations throughout the military components, additional work is 
required to reach full implementation. According to a September 2008 
report by the DOD Inspector General on DLA's implementation of passive 
RFID, 10 percent of supply contracts examined did not contain the 
required RFID clause and suppliers for 43 percent of contracts 
containing the required clause did not apply passive RFID tags to 
shipments they sent to depots.[Footnote 37] The Inspector General also 
found that installation-level understanding of the use and application 
of passive RFID was limited and additional training was needed to 
increase awareness of the technology and its application. 

DOD Does Not Collect Information Needed to Fully Demonstrate Return on 
Investment for IUID and Passive RFID: 

Although implementation of IUID and passive RFID will require 
significant funding commitments and staff resources from the military 
components, DOD does not gather the cost and performance information 
needed to fully demonstrate return on investment for the technologies 
to the military components that have primary responsibility for 
determining how and where these technologies are implemented. While DOD 
gathers information on some of the costs associated with 
implementation, cost estimates do not include all of the funding or 
staff resources provided by the services to support implementation 
because funding for implementation at the component level is frequently 
taken out of operational accounts, rather than being directly 
allocated. The March 2008 DOD AIT Implementation Plan identified $744 
million in programmed AIT-related funding for fiscal years 2008 through 
2013, but does not include in its estimate funding that the military 
components take from operational accounts to support implementation 
efforts. A 2005 memo from the Under Secretary of Defense (Acquisition, 
Technology, and Logistics) requires acquisition programs to 
specifically identify funding for IUID in budget submissions.[Footnote 
38] However, several officials from the military services stated that 
they divert resources from other efforts in order to facilitate 
implementation of IUID and passive RFID. Navy officials stated that 
implementation of IUID within the Navy is treated as an unfunded 
mandate and program managers at the installation level must take 
funding out of operational budgets in order to support implementation 
efforts. Army officials have faced similar challenges. For example, 
program managers involved in the Army's implementation of IUID for 
small arms have had to release staff from other tasks to assist in the 
marking of weapons with item unique identifiers. Since funding and 
staff resources are often provided in this indirect manner, the total 
resources expended on the implementation of IUID and passive RFID may 
not be visible to decision makers, both at the component level and 
across DOD. 

Additionally, DOD does not require the military components to gather or 
report on outcome-based performance measures to demonstrate the extent 
to which benefits are being accrued through the implementation of IUID 
and passive RFID. While DOD does gather some information to assess 
implementation efforts across the military components, the information 
collected focuses on measures of implementation progress and does not 
include outcome-based performance measures. For example, while OSD and 
the military components are required to provide updates to DOD at 
quarterly IUID Scorecard Reviews, reporting requirements focus on the 
execution of implementation plans rather than benefits accrued from 
implementation. At the July 2008 scorecard review, military components 
provided installation-level implementation plan status updates and 
reported on implementation efforts, such as issuance of new policies 
and outreach activities. Furthermore, while U.S. Transportation 
Command's AIT Implementation Plan identifies potential performance 
measures for automatic identification technologies and establishes a 
schedule to begin collecting some data in 2009, the military components 
have not yet been required to collect or report information pertaining 
to these metrics.[Footnote 39] Senior DOD officials involved in the 
implementation of passive RFID stated that they plan to collect this 
information in the future. 

During our site visits, officials at some locations were able to 
describe qualitative benefits derived from the implementation of IUID 
or passive RFID. However, the officials had not quantified the benefits 
they had observed. For instance, Army officials cited a number of 
benefits from the implementation of IUID by the Robotic Systems Joint 
Project Office. These included reductions in inventory size, shipping 
and receiving time, and data entry errors and increases in data 
quality, robustness, and processing speed. However, officials stated 
that they had not attempted to quantify these benefits. Other officials 
cited installation-level qualitative benefits for implementing passive 
RFID. For example, officials from DLA's Defense Distribution Center in 
San Joaquin, California, said the implementation of passive RFID 
reduced the amount of time needed to prepare shipments. However, they 
lacked key data to quantify the extent of the time savings. 
Additionally, only limited efforts have been made to gather the 
baseline information needed to quantify change in performance outcomes 
over time. For instance, DLA gathered baseline information on shipping 
and receiving operations at the Defense Distribution Center in San 
Joaquin in September 2008, despite beginning its implementation of 
passive RFID in November 2004. 

Without data on the costs and benefits associated with the 
technologies, it is difficult for DOD to create a business case or 
other analysis that would fully demonstrate return on investment from 
implementing IUID and passive RFID to the military components. Both OMB 
and DOD have established guidance for conducting such analyses. The 
stated goal of OMB Circular A-94 is to promote efficient resource 
allocation through well-informed decision making by the federal 
government, and the circular provides general guidance on comparing the 
costs of alternative means of achieving the same objective or stream of 
benefits. Additionally, according to DOD Instruction 7041.3, economic 
analyses are an integral part of the planning, programming and 
budgeting system of the department, and economic analysis calculations 
should include information on the costs and benefits associated with 
alternatives under consideration. 

While OSD and the military components have conducted some studies to 
assess the business case for the use of IUID and passive RFID, these 
studies have had mixed results. For example, a June 2008 analysis of 
alternatives for AIT in base-level Air Force supply and distribution 
processes found that implementation of the RFID vision presented in the 
DOD AIT CONOPS was not optimal, based on the costs and benefits 
associated with implementation. Instead, the Air Force determined that 
its current state of operations, with limited incorporation of passive 
RFID, functioned both effectively and efficiently. Broader analyses of 
return on investment, however, have arrived at different results. DOD 
released a business case analysis of passive RFID in April 2005 that 
projected overall cost savings from implementation of passive RFID 
would range from $70 million to $1.781 billion over a 6-year period and 
found that there is a reasonable to good expectation that 
implementation of passive RFID across DOD will provide an economic 
return on investment in the near term and an excellent expectation of 
economic returns in the long term. Additionally, a March 2005 cost 
benefit analysis of IUID performed by OSD found that implementation of 
the technology would deliver benefits in both the short and long terms. 
However, these department-wide business case analyses for both 
technologies have been characterized by DOD officials involved in the 
coordination and management of IUID and passive RFID as overly broad 
and unconvincing because analyses have been largely based on data from 
private industry implementation efforts. DOD officials stated that the 
April 2005 DOD business case analysis for passive RFID and the March 
2005 DOD IUID business case analysis were both high-level efforts that 
were discounted by the military components for overstating potential 
benefits of the technologies, as well as the time frame in which those 
benefits would be achieved. 

In 2005, we identified unclear return on investment as an impediment to 
the implementation of passive RFID.[Footnote 40] This impediment 
remains today. Since return on investment for both IUID and passive 
RFID is not always clear to the military components charged with their 
implementation, it is difficult for DOD to convince program managers at 
the installation level to invest time and resources toward overcoming 
challenges associated with implementing the technologies at the expense 
of other competing priorities. For example, officials from both the 
Army and the Navy who have responsibility for coordinating and managing 
implementation of these technologies in their respective components 
stated that implementation of IUID is given low priority by program 
managers, who do not see the benefits associated with implementation. 
DOD officials agreed that program managers resist implementation of the 
technologies when the value of implementation is unclear. In our 
previous work on supply chain management, we have stated that it is 
important for the Office of the Secretary of Defense to obtain the 
necessary resource commitments from the military services, DLA, and 
other organizations, such as U.S. Transportation Command, to ensure 
that initiatives are properly supported.[Footnote 41] At present, DOD's 
inability to fully quantify return on investment has impeded 
implementation progress, as the military components charged with 
carrying out implementation are unable to clearly discern the benefits 
of the technologies and are reluctant to devote time and resources for 
implementation, rather than for competing priorities. 

Effective integration of these technologies with supply chain processes 
and information systems is challenging and requires the military 
components to make significant commitments of funding and staff 
resources, often without promise of short-term benefit. As noted 
previously, DOD identified $744 million in programmed funding that will 
be necessary in fiscal years 2008 through 2013 to achieve the vision 
laid out in the AIT Implementation Plan. Military service officials 
stated that tasks required to achieve full implementation include 
installation of infrastructure and training of personnel to understand 
and use the technologies. Additionally, costly and complex business 
process changes are necessary for the military components to enable 
interoperability between automatic information systems used to gather 
data from IUID marks and passive RFID tags and service-specific supply 
data systems. 

Without these changes, data gathered through IUID and passive RFID 
cannot be accessed to derive benefit from the technologies. In some 
cases, data are not being gathered at all. Officials at three out of 
four locations participating in the implementation of the Alaska RFID 
Implementation Project stated they derive no benefit yet from passive 
RFID as a result of the lack of integration between RFID data 
collection platforms and supply chain information systems. Deriving 
benefit from IUID implementation has also been difficult. Officials 
from multiple military components stated that while IUID marking 
efforts are time consuming and resource intensive, lack of data system 
integration prevents implementation benefits from being realized. 

Without a clear return on investment, achieving the integration 
necessary to derive benefit from the technologies may be resource 
intensive to a degree that discourages the military components from 
investing in technology solutions. For instance, faced with a lack of 
information system interoperability, the Army decided against investing 
in technologies that would allow its legacy supply systems to use IUID 
and passive RFID data. Instead, the Army decided to delay obtaining 
benefit from the technologies for multiple years until Army-wide 
information systems that can directly communicate with one another are 
operational. Army officials stated that the costs associated with 
implementing an interim solution were prohibitive, given the uncertain 
return on investment for the technologies in the near term. 

Conclusions: 

The importance of supply chain management to the operational capability 
of U.S. forces, as well as the considerable resources being spent in 
this area, highlight the importance of addressing long-standing 
problems that have resulted in our designation of this DOD function as 
a high-risk area. Given the diffuse organization of DOD's logistics 
operations, senior DOD decision makers need a comprehensive, integrated 
strategy to guide the department's efforts to make significant 
improvements. Although DOD's Logistics Roadmap represents the latest 
attempt to establish such a strategy for the department, the lack of 
key elements we identified in our review calls into question the 
utility of this roadmap in addressing supply chain problems. Further, 
without the inclusion of these key elements, it will be difficult for 
DOD to demonstrate progress in addressing these problems and provide 
Congress with assurance that the DOD supply chain achieves DOD's goal 
of providing cost-effective joint logistics support for the war 
fighter. Therefore, it will be important that DOD officials follow 
through on their intent to remedy weaknesses in the roadmap. 

Although incorporating IUID and passive RFID into the DOD supply chain 
offers the promise of technologies that may be able to help address 
long-standing problems of inadequate asset visibility, the department 
is unable to fully quantify the return on investment associated with 
the technologies to those in the military components responsible for 
implementation. Cost and benefit information collected from actual 
implementation efforts could form the basis for quantifying return on 
investment and help to encourage the military components to allocate 
resources that will be needed for widespread implementation of these 
technologies. Until the military components place higher priority on 
integration of IUID and passive RFID into their business processes, DOD 
will not realize the benefits it expects to achieve from these 
initiatives. 

Recommendations for Executive Action: 

To improve DOD's ability to guide logistics initiatives and programs 
across the department and to demonstrate the effectiveness, efficiency, 
and impact of its efforts to resolve supply chain management problems, 
we recommend that the Secretary of Defense direct the Under Secretary 
of Defense (Acquisition, Technology, and Logistics) take the following 
three actions necessary to have a comprehensive, integrated strategy 
for improving logistics: 

* Identify the scope of logistics problems and capability gaps to be 
addressed through the Logistics Roadmap and associated efforts. 

* Develop, implement, and monitor outcome-focused performance measures 
to assess progress toward achieving the roadmap's objectives and goals. 

* Document specifically how the roadmap will be used within the 
department's decision-making processes used to govern and fund 
logistics and who will be responsible for its implementation. 

To improve the likelihood DOD will achieve the potential benefits it 
expects from the implementation of IUID and passive RFID, we recommend 
that the Secretary of Defense direct the Under Secretary of Defense 
(Acquisition, Technology, and Logistics), in conjunction with the 
military components, take the following two actions: 

* Collect detailed information on the costs, including costs currently 
being funded from operational accounts, and performance outcomes for 
ongoing and future implementation of these two technologies. 

* On the basis of these data, develop an analysis or analyses of the 
return on investment to justify expanded investment of resources in the 
implementation of the technologies. 

We also recommend that the Secretary of Defense direct the Secretaries 
of the Army, the Navy, and the Air Force; the Commandant of the Marine 
Corps; and the Director of the Defense Logistics Agency to determine, 
on the basis of the above analysis or analyses, whether sufficient 
funding priority has been given to the integration of these 
technologies into their respective business processes and, if not, to 
take appropriate corrective action. 

Agency Comments and Our Evaluation: 

In its written comments on a draft of this report, DOD concurred with 
our recommendations and identified a number of corrective actions it 
has taken or plans to take. While we believe DOD's actions, for the 
most part, respond to the issues raised in this report, several 
questions remain, including both the methodology and time frame for 
DOD's assessments of the objectives in the roadmap. On the basis of 
DOD's comments, we have modified our fourth recommendation to specify 
that DOD collect information on all costs, including costs currently 
being funded from operational accounts, associated with implementing 
these two technologies. The department's written comments are reprinted 
in appendix II. 

DOD concurred with our three recommendations focused on improving its 
Logistics Roadmap and cited actions to address the recommendations. DOD 
stated that the roadmap is a living document and the department 
continues progressing toward developing a more coherent and 
authoritative framework for guiding its logistics improvement efforts. 
Specifically, DOD stated that it has completed an initial review of 
three of the roadmap's objectives as the framework for finalizing an 
assessment methodology. This initial review is intended to identify 
gaps, shortfalls, timing issues, and challenges throughout DOD's supply 
chain. DOD also stated that, in addition to monitoring existing 
performance metrics, such as customer wait time, the department will 
determine which specific outcome-based performance measures can be 
linked to each of the objectives and goals within the roadmap. Finally, 
DOD stated that it has established an executive advisory committee to 
ensure that the roadmap is a useful tool in decision making. Our report 
describes the ongoing assessment effort that DOD cites in its comments. 
Although DOD did not provide a time frame for completing these 
assessments, DOD officials have previously stated that they tentatively 
expect to have all 22 assessments completed for the next iteration of 
the roadmap in July 2009. Because DOD was not able to provide 
information on its assessment methodology, we could not determine 
whether these assessments are likely to address the information gaps we 
identified in the current roadmap regarding the scope of DOD's 
logistics problems and capability gaps; nor could we determine the 
extent that these assessments might result in outcome-oriented 
performance measures that would enable DOD to assess progress toward 
achieving the roadmap's goals and objectives. DOD's decision to form an 
executive advisory committee appears to be a positive step. However, it 
remains unclear at this time how the roadmap will be integrated within 
the department's existing decision-making processes used to govern and 
fund logistics; therefore, DOD will need to take additional steps to 
clarify how it intends to use the roadmap. 

DOD also concurred with our three recommendations aimed at improving 
the likelihood that the department will achieve the potential benefits 
it expects from implementing IUID and passive RFID. DOD cited a number 
of efforts to identify and collect performance metrics for IUID and 
passive RFID and to analyze this information to justify the expanded 
investment of resources in their implementation. DOD further stated it 
will review the services' Program Objective Memorandum inputs to ensure 
that, based on the department's AIT investment plan, sufficient funding 
priority is given to integrating these technologies into their 
respective business processes. Our review indicated that much work 
remains for DOD to collect complete and useful performance data. 
Additionally, DOD did not indicate plans to gather additional cost 
information pertaining to the implementation of IUID and passive RFID. 
We continue to believe that cost information associated with the 
implementation of these technologies is important to any analysis of 
return on investment. As we noted in the report, some funding for the 
implementation of IUID and passive RFID is being taken out of 
operational accounts. Current POM information may not provide a 
complete picture of the costs associated with the implementation of 
IUID and passive RFID. Therefore, DOD should gather detailed 
information on the full costs associated with the implementation of 
both IUID and passive RFID, including those funded from operational 
accounts. We have modified our recommendation accordingly. 

We are sending copies of this report to interested congressional 
committees; the Secretary of Defense; the Secretaries of the Army, the 
Navy, and the Air Force; the Commandant of the U.S. Marine Corps; the 
Commander of U.S. Transportation Command; the Director of the Defense 
Logistics Agency; and the Director, Office of Management and Budget. 
This report will also be available at no charge on GAO's Web site at 
[hyperlink, http://www.gao.gov]. 

If you or your staffs have questions concerning this report, please 
contact me at (202) 512-8365 or solisw@gao.gov. Contact points for our 
Offices of Congressional Relations and Public Affairs may be found on 
the last page of this report. GAO staff who made major contributions to 
this report are listed in appendix III. 

Signed by: 

William M. Solis: 
Director, Defense Capabilities and Management: 

List of Congressional Committees: 

The Honorable Carl Levin: 
Chairman: 
The Honorable John McCain: 
Ranking Member: 
Committee on Armed Services: 
United States Senate: 

The Honorable Ike Skelton: 
Chairman: 
The Honorable Duncan Hunter: 
Ranking Member: 
Committee on Armed Services: 
House of Representatives: 

The Honorable Daniel K. Akaka: 
Chairman: 
The Honorable George V. Voinovich: 
Ranking Member: 
Subcommittee on Oversight of Government Management, the Federal 
Workforce, and the District of Columbia: 
Committee on Homeland Security and Governmental Affairs:
United States Senate: 

The Honorable John P. Murtha: 
Chairman: 
Subcommittee on Defense:
Committee on Appropriations: 
House of Representatives: 

[End of section] 

Appendix I: Scope and Methodology: 

To determine the extent to which the Department of Defense's (DOD) July 
2008 Logistics Roadmap serves as a comprehensive, integrated strategy 
to improve DOD logistics, we reviewed its content and organization, as 
well as documents relating to its development, including DOD guidance 
to the components regarding submitting information and reviewing draft 
copies of the roadmap. We also reviewed memoranda directing components 
to conduct assessments for specific objectives included in the roadmap. 
We reviewed prior DOD logistics strategies and plans, including the 
2005 Focused Logistics Roadmap and the DOD Plan for Improvement in the 
GAO High Risk Area of Supply Chain Management with a Focus on Inventory 
Management and Distribution, as well as other DOD strategic plans such 
as the Enterprise Transition Plan and the Quadrennial Defense Review. 
We reviewed DOD statements about the intended purposes of the roadmap 
that were made in congressional hearings, in discussions with our 
office conducted during prior GAO work in this area, and in the roadmap 
itself. We identified sound management principles based on prior work 
evaluating strategic planning efforts and performance assessments. 
[Footnote 42] We obtained information on DOD's logistics capabilities 
portfolio management test case by reviewing DOD guidance and 
interviewing officials within the Office of the Joint Chiefs of Staff, 
who were responsible for managing the test case for joint logistics. We 
interviewed officials from DOD components submitting information for 
the roadmap, including the Army, Navy, Air Force, Marine Corps, the 
Defense Logistics Agency, the U.S. Transportation Command, the U.S. 
Joint Forces Command, and the Offices of the Assistant Deputy Under 
Secretaries of Defense for Supply Chain Integration, Transportation 
Policy, and Maintenance Policy and Programs. Over the course of these 
interviews, we obtained pertinent information and perspectives on the 
roadmap, efforts to compile and review the information included in the 
roadmap, and potential uses of the roadmap for logistics decision 
making. 

To obtain information on the progress DOD has made implementing item 
unique identification (IUID) and passive radio frequency identification 
(RFID), we reviewed DOD's overall concept of operations and 
implementation plan for automatic identification technology, which 
includes IUID and passive RFID. We obtained briefing documents 
describing the status of IUID and passive RFID implementation. We 
obtained and reviewed various service-level implementation plans for 
IUID and RFID; however, because the majority of these plans were only 
recently released or in draft form, we did not evaluate the adequacy of 
these service-level plans. We also reviewed Office of Management and 
Budget (OMB) and DOD guidance on benefit-cost analysis and economic 
analysis for decision making.[Footnote 43] We visited and conducted 
interviews with officials involved in the coordination and management 
of these technologies within the Office of the Secretary of Defense 
(OSD), Defense Logistics Agency (DLA), the U.S. Transportation Command, 
and the military services. Additionally, we visited and observed the 
use of passive RFID technology at DLA's Defense Distribution Center in 
San Joaquin, California; Travis Air Force Base, California; and the 
Naval Base Kitsap in Bangor, Washington. We also visited and observed 
the use of IUID at the Robotic Systems Joint Project Office and the 
Army Aviation and Missile Command, Alabama. We also interviewed 
officials at the following locations involved in implementing either 
IUID or passive RFID: Anniston Army Depot, Alabama; Army Project 
Manager Soldier Weapons, New Jersey; Navy Extremely High Frequency 
Satellite Communications Branch, California; Naval Air Systems Command, 
Maryland; Elmendorf Air Force Base, Alaska; Fort Richardson, Alaska; 
and Air Mobility Command, Illinois. We also interviewed officials 
responsible for managing the IUID registry in Battle Creek, Michigan. 
We also interviewed officials in the DOD Inspector General's Office to 
review concurrent work that office is conducting on passive RFID. 

We conducted this performance audit from January 2008 through January 
2009 in accordance with generally accepted government auditing 
standards. Those standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe that the evidence obtained provides a reasonable basis for 
our findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: Comments from the Department of Defense: 

Department of Defense: 
Deputy Under Secretary Of Defense For Logistics And Materiel Readiness: 
3500 Defense Pentagon: 
Washington, DC 20301-3500: 

December 19, 2008: 

Mr. William M. Solis: 
Director, Defense Capabilities and Management: 
U.S. Government Accountability Office: 
441 G Street, N.W. 
Washington, DC 20548: 

Dear Mr. Solis: 
This is the Department of Defense (DoD) response to the Government 
Accountability Office (GAO) draft report, GAO-09-150, "Defense 
Logistics: Lack of Key Information May Impede DoD's Ability to Improve 
Supply Chain Management," dated November 21, 2008 (GAO Code 351156). 
The GAO draft report provides DoD with Logistics Roadmap 
recommendations that support developing a more comprehensive, 
integrated strategy for improving logistics. In the report, GAO also 
recommends that the DoD take actions to achieve potential benefits from 
the implementation of Item Unique Identification and passive Radio 
Frequency Identification. The Department concurs with all six 
recommendations. 

Detailed comments on the draft report recommendations are included in 
the enclosure. The DoD appreciates the opportunity to comment on the 
report. 

Signed by: 

Jack Bell: 

Enclosure: As stated: 

GAO Draft Report - Dated November 21, 2008: 
GAO Code 351156/GAO-09-150: 

"Defense Logistics: Lack of Key Information May Impede DoD's Ability to 
Improve Supply Chain Management" 

Department Of Defense Comments To The Recommendations: 

Recommendation 1: The GAO recommends that the Secretary of Defense 
direct the Under Secretary of Defense for Acquisition, Technology and 
Logistics to identify the scope of logistics problems and capability 
gaps to be addressed through the Logistics Roadmap and associated 
efforts. 

DoD Response: Concur. Department of Defense (DoD) has recognized the 
need to identify the scope of logistics problems and gaps in the 
Roadmap. Since August 2008, DoD has been diligently working to finalize 
the Roadmap's assessment phase. The Department has completed an initial 
review of three objectives as the framework for finalizing an 
assessment methodology that will lead to successful outcomes. This 
initial review is laying the framework for the way ahead. The 
assessment process will identify gaps, shortfalls, timing issues and 
challenges throughout the DoD supply chain. It is important to note 
that the 2008 DoD Logistics Roadmap is a living document. Multiple 
sections of the product were published in July 2008, but the project 
continues progressing towards developing a more coherent and 
authoritative framework for guiding the Department's logistics 
improvement efforts. 

Recommendation 2: The GAO recommends that the Secretary of Defense 
direct the Under Secretary of Defense for Acquisition, Technology and 
Logistics to develop, monitor, and implement outcome-focused 
performance measures to assess progress toward achieving the roadmap's 
objectives and goals. 

DoD Response: Concur. DoD has developed and is monitoring outcome-
focused performance metrics, such as Customer Wait Time, at various 
levels of the supply chain. Additionally, metrics have been developed 
based on the Supply Chain Operations Reference Model, such as Perfect 
Order Fulfillment; though not all of these metrics can be fully 
collected across the DoD until modernized systems have been 
implemented. As part of the Roadmap assessment process that started in 
August 2008, Supply, Maintenance, Deployment, and Distribution managers 
have been tasked to determine which specific outcome performance 
metrics can be linked to each of the objectives and goals within the 
Roadmap in order to assess progress toward achieving desired results. 

Recommendation 3: The GAO recommends that the Secretary of Defense 
direct the Under Secretary of Defense for Acquisition, Technology and 
Logistics to document specifically how the roadmap will be used within 
the Department's decision-making processes used to govern and fund 
logistics and who will be responsible for its implementation. 

DoD Response: Concur. DoD has established a joint Executive Advisory 
Committee made up of senior leaders responsible for implementing 
logistics programs, and initiatives. The committee will guide the 
Roadmap process to ensure it is a useful tool in decision-making. 

Recommendation 4: The GAO recommends that the Secretary of Defense 
direct the Under Secretary of Defense for Acquisition, Technology and 
Logistics, in conjunction with the Military Components, to collect 
detailed information on the costs and performance outcomes for ongoing 
and future implementation of the Item Unique Identification (IUID) and 
passive Radio Frequency Identification (RFID) technologies. 

DOD Response: Concur. IUID complements RFID as a foundational element 
of Materiel Visibility and is a critical enabler for DoD's progress 
toward Serialized Item Management (SIM). Per DoD IUID and SIM policies 
and implementing guidance, Military Components are currently preparing 
detailed IUID and SIM implementation plans based on the cost and 
projected benefits of marking, tracking and managing discrete items 
over their lifecycle. SIM plans highlighting projected outcomes of IUID 
investment are to be forwarded to Deputy Under Secretary of Defense 
(DUSD) for Logistics and Materiel Readiness (L&MR) by the Military 
Components in January 2009. Additionally, DoD tracks IUID 
implementation and key programmatic metrics via quarterly IUID 
Scorecard reviews chaired by Deputy Under Secretary of Defense for 
Acquisition and Technology. For RFID, the DoD Automatic Identification 
Technology (AIT) Stakeholders agree that a critical step is to capture 
the "As Is" and the "To Be" performance of the supply chain on current 
and future implementations of RFID. Toward that end, the baseline "As 
Is" measurements were captured for the business processes identified in 
the AIT Implementation Plan. The stakeholders will then collect the "To 
Be" performance outcomes following implementation of the new AIT 
technologies in September 2009. 

Recommendation 5: The GAO recommends that the Secretary of Defense 
direct the Under Secretary of Defense for Acquisition, Technology and 
Logistics, in conjunction with the Military Components, to develop an 
analysis or analyses of the return on investment to justify expanded 
investment of resources in the implementation of the item unique 
identification (IUID) and passive radio frequency identification (RFID) 
technologies. 

DoD Response: Concur. For IUID, the multi-Service SIM Working Group 
developed and issued guidance on developing the IUID/SIM return on 
investment analysis in January 2008. As SIM Plans are submitted to DUSD 
(L&MR) for review beginning in January 2009, DoD will be able to 
analyze and justify expanded investment of resources in the 
implementation of IUID technologies and processes. For RFID, the DoD 
AIT Stakeholders agree that a critical step is to capture the "As Is" 
and the "To Be" performance of the supply chain before and after the 
application of new AIT technology in order to justify the investment of 
resources on MT. Toward that end, the baseline "As Is" measurements 
were captured for the business processes identified in the AIT 
Implementation Plan. The stakeholders will then collect the "To Be" 
performance outcomes following implementation of the new AIT 
technologies in September 2009 to justify expanded investment of 
resources. 

Recommendation 6: The GAO recommends that the Secretary of Defense 
direct the Secretaries of the Army, the Navy, and the Air Force; the 
Commandant of the Marine Corps; and the Director of the Defense 
Logistics Agency to determine, on the basis of the above analysis or 
analyses, whether sufficient funding priority has been given to 
integration of these technologies into their respective business 
processes and, if not, to take appropriate corrective action. 

DoD Response: Concur. For IUID, Military Components IUID/SIM budget 
requirements will be forwarded in SIM Plan submittals beginning in 
January 2009. Subsequently, Service-level Program Objective Memorandum 
(POM) inputs will be reviewed to ensure that a sufficient funding 
priority has been provided to implement IUID technologies and processes 
in order to achieve stated IUID/SIM outcome based objectives. For RFID, 
the DoD AIT Stakeholders recognize that it is very important to 
synchronize the expenditures on AIT. The DoD MT synchronization 
integrated process team was established to help guide and synchronize 
the Services, Defense Logistics Agency (DLA), and U.S. Transportation 
Command's (USTRANSCOM) efforts to incorporate new AIT technology for 
Transportation and Distribution. The DoD AIT Implementation Plan Global 
Team collected Program Objective Memorandum (POM) inputs from each of 
the Services and DLA to provide a comprehensive view of the investment 
plan for implementing AIT as specified in the plan. As the Services, 
DLA, and USTRANSCOM complete the actions for Spiral 1 of the DoD AIT 
Implementation Plan for Transportation and Distribution at the end of 
September 2009, the Global Team will validate these findings against 
the POM funding to ensure sufficient funding priority has been given to 
the integration of these technologies into their respective business 
processes. 

[End of section] 

Appendix III: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

William M. Solis, (202) 512-8365 or solisw@gao.gov: 

Staff Acknowledgments: 

In addition to the contact named above, Tom Gosling (Assistant 
Director), Grace Coleman, Nicole Harms, Brooke Leary, Andrew McGuire, 
Paulina Reaves, and Ben Thompson made significant contributions to this 
report. 

[End of section] 

Footnotes: 

[1] GAO, High-Risk Series: An Update, [hyperlink, 
http://www.gao.gov/products/GAO-05-207] (Washington, D.C.: Jan. 1, 
2005) and High-Risk Series: An Update, [hyperlink, 
http://www.gao.gov/products/GAO-07-310] (Washington, D.C.: Jan. 31, 
2007). 

[2] GAO, DOD's High-Risk Areas: High-Level Commitment and Oversight 
Needed for DOD Supply Chain Plan to Succeed, [hyperlink, 
http://www.gao.gov/products/GAO-06-113T] (Washington, D.C.: Oct. 6, 
2005) and DOD's High-Risk Areas: Challenges Remain to Achieving and 
Demonstrating Progress in Supply Chain Management, [hyperlink, 
http://www.gao.gov/products/GAO-06-983T] (Washington, D.C.: July 25, 
2006). 

[3] Office of the Secretary of Defense, Deputy Under Secretary of 
Defense for Logistics and Materiel Readiness, Department of Defense 
Logistics Roadmap (July 2008). 

[4] GAO, DOD's High-Risk Areas: Progress Made Implementing Supply Chain 
Management, but Full Extent of Improvement Unknown, [hyperlink, 
http://www.gao.gov/products/GAO-07-234] (Washington, D.C.: Jan. 17, 
2007). 

[5] For the purposes of this report, we looked at the implementation of 
IUID in terms of assigning a unique identifier for an item, marking an 
item with a data matrix containing that identifier, and registering 
information about the item and identifier in a database. In discussions 
with senior DOD officials, they noted that the IUID initiative, in a 
broader sense, also includes the use of this data to better manage DOD 
inventory items. While we recognize that DOD could ultimately use this 
data for a number of purposes, including better inventory management, 
we are focusing on the technological process of assigning a unique 
identifier, marking, and registering items as this is the current focus 
of IUID implementation in the department. 

[6] Active RFID tags, which generally use a battery, transmit 
information through radio signals that are read electronically. Active 
tags can hold much more data than passive tags and are also more 
expensive. 

[7] Senate Committee on Homeland Security and Governmental Affairs, 
Subcommittee on Oversight of Government Management, the Federal 
Workforce and the District of Columbia, Overview of the DOD Supply 
Chain and Logistics, 109th Cong. 2nd Session, 2006, (statement of Alan 
F. Estevez, Assistant Deputy Under Secretary of Defense (Supply Chain 
Integration) and Senate Committee on Homeland Security and Governmental 
Affairs, Subcommittee on Oversight of Government Management, the 
Federal Workforce and the District of Columbia, 110th Cong. 1st 
Session, 2007, (statement of Jack Bell, Deputy Under Secretary of 
Defense (Logistics and Materiel Readiness), General Norton A. Schwartz, 
Commander, U.S. Transportation Command, and Lieutenant General Robert 
T. Dail, Director, Defense Logistics Agency). 

[8] These strategic planning and transformation management principles 
are discussed in the following reports: GAO, Defense Logistics: Efforts 
to Improve Distribution and Supply Support for Joint Military 
Operations Could Benefit from a Coordinated Management Approach, 
[hyperlink, http://www.gao.gov/products/GAO-07-807] (Washington, D.C.: 
June 29, 2007); DOD's High Risk Areas: Efforts to Improve Supply Chain 
Can Be Enhanced by Linkage to Outcomes, Progress in Transforming 
Business Operations, and Reexamination of Logistics Governance and 
Strategy, [hyperlink, http://www.gao.gov/products/GAO-07-1064T] 
(Washington, D.C.: July 10, 2007); Results-Oriented Cultures: 
Implementation Steps to Assist Mergers and Organizational 
Transformations, [hyperlink, http://www.gao.gov/products/GAO-03-669] 
(Washington, D.C.: July 2, 2003); and Defense Transformation: Clear 
Leadership, Accountability, and Management Tools Are Needed to Enhance 
DOD's Efforts to Transform Military Capabilities, [hyperlink, 
http://www.gao.gov/products/GAO-05-70] (Washington, D.C.: Dec. 17, 
2004). 

[9] Office of Management and Budget Circular A-94 Revised, Guidelines 
for Discount Rates for Benefit-Cost Analysis of Federal Programs (Oct. 
29, 1992) and Department of Defense Instruction 7041.3, Economic 
Analysis for Decisionmaking (Nov. 7, 1995). 

[10] [hyperlink, http://www.gao.gov/products/GAO-05-70]. 

[11] [hyperlink, http://www.gao.gov/products/GAO-07-807]. 

[12] Office of the Under Secretary of Defense for Acquisition, 
Technology and Logistics Memorandum, Policy for Unique Identification 
(UID) of Tangible Items--New Equipment, Major Modifications, and 
Reprocurements of Equipment and Spares (July 29, 2003) and Office of 
the Under Secretary of Defense for Acquisition, Technology and 
Logistics Memorandum, Radio Frequency Identification (RFID) Policy 
(July 30, 2004). 

[13] [hyperlink, http://www.gao.gov/products/GAO-07-310]. 

[14] In prior reports, we have noted other DOD actions to resolve 
supply chain management problems. For our most recent discussion of 
these actions, see [hyperlink, 
http://www.gao.gov/products/GAO-07-1064T]. 

[15] The Under Secretary of Defense (Acquisition, Technology, and 
Logistics) has been designated the Defense Logistics Executive, with 
overall responsibility for improving and maintaining the Defense 
Logistics and Global Supply Chain Management System. 

[16] Office of the Deputy Secretary of Defense Memorandum, Capability 
Portfolio Management Way Ahead (Feb. 7, 2008). 

[17] Department of Defense Directive 7045.20, Capability Portfolio 
Management (Sept. 25, 2008). 

[18] GAO, Defense Inventory: Improvements Needed in DOD's 
Implementation of Its Long-Term Strategy for Total Asset Visibility of 
Its Inventory, [hyperlink, http://www.gao.gov/products/GAO-05-15] 
(Washington, D.C.: Dec. 6, 2004); DOD Business Transformation: Lack of 
an Integrated Strategy Puts the Army's Asset Visibility System 
Investments at Risk, [hyperlink, 
http://www.gao.gov/products/GAO-07-860] (Washington, D.C.: July 27, 
2007); and DOD Business Transformation: Air Force's Current Approach 
Increases Risk That Asset Visibility Goals and Transformation 
Priorities Will Not Be Achieved, [hyperlink, 
http://www.gao.gov/products/GAO-08-866] (Washington, D.C.: Aug. 8, 
2008). 

[19] DOD describes its Enterprise Transition Plan as the roadmap for 
the department's business transformation. It is organized around six 
business enterprise priorities, including materiel visibility. 

[20] Office of the Under Secretary of Defense for Acquisition, 
Technology and Logistics Memorandum, Policy Update for Item Unique 
Identification of Tangible Personal Property, Including Government 
Property in the Possession of Contractors (May 12, 2005). 

[21] Office of the Under Secretary of Defense for Acquisition, 
Technology and Logistics Memorandum, Policy for Unique Identification 
(UID) of Tangible Items--New Equipment, Major Modifications, and 
Reprocurements of Equipment and Spares (July 29, 2003). These criteria 
cover all items where (1) unit acquisition cost is $5,000 or more; (2) 
it is either serially managed, mission essential or controlled 
inventory piece of equipment or reparable item, or a consumable item or 
materiel where permanent identification is required; (3) it is a 
component of a delivered item, if the program manager has determined 
that unique identification is required; or (4) a UID or a DOD-
recognized UID equivalent is available. 

[22] Office of the Under Secretary of Defense for Acquisition, 
Technology and Logistics Memorandum, Policy for Unique Identification 
(UID) of Tangible Personal Property Legacy Items in Inventory and 
Operational Use, Including Government Furnished Property (GFP) (Dec. 
23, 2004). 

[23] GAO, Defense Logistics: Better Strategic Planning Can Help Ensure 
DOD's Successful Implementation of Passive Radio Frequency 
Identification, [hyperlink, http://www.gao.gov/products/GAO-05-345] 
(Washington, D.C.: Sept. 12, 2005). 

[24] Senate Committee on Homeland Security and Governmental Affairs, 
Subcommittee on Oversight of Government Management, The Federal 
Workforce and the District of Columbia, Overview of the DOD Supply 
Chain and Logistics, 109th Cong. 2nd Session, 2006 (statement of Alan 
F. Estevez, Assistant Deputy Under Secretary of Defense (Supply Chain 
Integration). 

[25] The DOD official responsible for coordinating the roadmap stated 
that there was no defined distinction between initiatives and programs; 
however, initiatives were generally focused on process improvements, 
while programs generally dealt with the acquisition of specific items, 
such as weapons systems. 

[26] Senate Committee on Homeland Security and Governmental Affairs, 
Subcommittee on Oversight of Government Management, the Federal 
Workforce and the District of Columbia, 110th Cong. 1st Session, 2007 
(statement of Jack Bell, Deputy Under Secretary of Defense (Logistics 
and Materiel Readiness), General Norton A. Schwartz, Commander, U.S. 
Transportation Command, and Lieutenant General Robert T. Dail, 
Director, Defense Logistics Agency). 

[27] Officials from the Army, Navy, Air Force, Marine Corps, the 
Defense Logistics Agency, the U.S. Transportation Command, the U.S. 
Joint Forces Command, and the Offices of the Assistant Deputy Under 
Secretaries of Defense for Transportation Policy; Maintenance Plans and 
Policies; and Supply Chain Integration provided inputs on logistics 
initiatives and programs. 

[28] In May 2005, the Secretary of Defense directed DOD to begin using 
common capability definitions, known as joint capability areas or 
capability portfolios, to describe missions and functional activities 
performed by the joint force. Joint logistics, one capability 
portfolio, is defined as the ability to project and sustain a 
logistically ready joint force through the deliberate sharing of 
national and multi-national resources to effectively support 
operations, extend operational reach, and provide the joint force 
commander the freedom of action necessary to meet mission objectives. 
In addition to joint logistics' three joint capability areas stated 
above, the additional capability areas for joint logistics include 
logistics services, operational contract support, engineering, and 
force health protection. 

[29] The three objectives for which assessments have begun are (1) 
effective procurement processes; (2) visibility of in-transit, in- 
storage, and in-process units and materiel for optimized movement 
planning and execution; and (3) identify and sustain requisite core 
maintenance capability. The Deputy Under Secretary of Defense 
(Logistics and Materiel Readiness) assigned the following three 
components, respectively, to lead each assessment: Defense Logistics 
Agency, U.S. Transportation Command, and Assistant Deputy Under 
Secretary of Defense (Maintenance Policy and Programs). 

[30] [hyperlink, http://www.gao.gov/products/GAO-05-70]. 

[31] Department of Defense Directive 5100.1, Functions of the 
Department of Defense and Its Major Components (Washington, D.C., Aug. 
1, 2002). 

[32] [hyperlink, http://www.gao.gov/products/GAO-07-807]. 

[33] United States Transportation Command, Department of Defense 
Automatic Identification Technology Concept of Operations for Supply 
and Distribution Operations (June 11, 2007) and Department of Defense 
Automatic Identification Technology Implementation Plan for Supply and 
Distribution Operations (March 2008). 

[34] Assistant Deputy Under Secretary of Defense for Materiel Readiness 
and Maintenance Policy, The Concept of Operations for IUID-Enabled 
Maintenance in Support of DOD Materiel Readiness (Jan. 2007) and Office 
of the Deputy Under Secretary of Defense (Acquisition, Technology and 
Logistics) The Department of Defense Guide to Uniquely Identifying 
Items: Assuring Valuation, Accountability and Control of Government 
Property, version 2.0 (Oct. 1, 2008). 

[35] Serialized item management is the management of a specific item 
relative to its exact conditions, requirements, and circumstances for 
the purposes of improving materiel readiness. 

[36] This total included $7.88 million in fiscal year 2005, $11.48 
million in fiscal year 2006, and $8 million in fiscal year 2007. 

[37] United States Inspector General, Department of Defense, Requiring 
Radio Frequency Identification in Contracts for Supplies, D-2008-135 
(Sept. 2008). 

[38] Office of the Under Secretary of Defense for Acquisition, 
Technology and Logistics Memorandum, Budget Instructions for Unique 
Identification (UID) Implementation FY 2007-2012 (May 11, 2005). 

[39] Examples of these metrics are customer wait time, arrival to 
receipt time, and RFID tag read rate. 

[40] [hyperlink, http://www.gao.gov/products/GAO-05-345]. 

[41] See [hyperlink, http://www.gao.gov/products/GAO-06-113T]. 

[42] [hyperlink, http://www.gao.gov/products/GAO-03-669], 
[hyperlink, http://www.gao.gov/products/GAO-05-70], 
[hyperlink, http://www.gao.gov/products/GAO-07-807], and 
[hyperlink, http://www.gao.gov/products/GAO-07-1064T]. 

[43] Office of Management and Budget Circular A-94 Revised, Guidelines 
for Discount Rates for Benefit-Cost Analysis of Federal Programs (Oct. 
29, 1992) and Department of Defense Instruction 7041.3, Economic 
Analysis for Decisionmaking (Nov. 7, 1995). 

[End of section] 

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