1. 1 ITEM UNIQUE IDENTIFICATION (IUID) OSD WORKSHOPS/JLB TASK FORCE STATUS UPDATE November 17, 2009

2. 2 Background on Item Unique Identification (IUID) POLICY: Emerging Policy on IUID in the Supply Chain (DoD 4140) identifies requirements for intensive management by UII for a select subset of IUID items, e.g., classified, sensitive, NWRM (scope of items still being determined): BUSINESS PROCESSES AFFECTED: Receipt, Physical Inventory, Issue, Disposal, Directed Returns/Retrograde/ Materiel Returns Program, and Discrepancy/Deficiency Processing BASELINE ASSUMPTIONS: DLMS compliance FLIS identification code will be developed for IUID

3. 3 OSD WORKSHOPS/JLB TASK FORCE UPDATE OSD/SCI Logistics IUID Workshops established to identify requirements that can be used as the framework for detailed business rules to enable use of IUID in logistics transactions/ processes IUID Workshop developed requirements/business rules to be finalized and socialized via iterative, collaborative DLMS Process Review Committee/Proposed DLMS Change (PDC) process During first half of CY 09 IUID Workshops with DoD Components were held on Receipt & Discrepancy Reporting; Issue; Inventory; Potential Levels of Management Intensity Final policy and business rules held in abeyance as JLB Task Force Validates IUID Implied Value

4. 4 IUID Value Proposition Validated Value Proposition Must Drive Policy & Implementation!  IUID offers quantifiable efficiency and effectiveness gains compared to DoD’s current data capture and tracking  IUID value can be quantified in key value chains: –Positive Inventory Control –Property Accountability –Product Lifecycle Management  Implementation requirements and costs can be assessed by examining IUID-related actions for each value chain within and across a set of applicable logistics nodes –Suppliers –Distribution Centers –Base/Forward Supply –Depot-level Maintenance –Field-level Maintenance –Field Activities –Disposal Activities End-to-end processes Where people and machines interact with IUID to achieve success in defined value chains

5. Task Force Products  Validated value proposition for key value chains across all applicable logistics nodes  Set of integrated, prioritized, and time-phased requirements for IUID marking, tracking, and use across the value chains  Recommended policy and guidance adjustments  Action Briefing for JLB 5

6. 6 DLMS Transactions with IUID Data Placeholders * Identifies transactions addressed during IUID Workshops # DS 527D also contains a UID&RFID indicators to alert the receiving activity that the incoming materiel should have IUID and/or passive RFID data IAW the contract. 140ASmall Arms Reporting 180MMaterial Returns Reporting 511MRequisition Modification 511RRequisition 527D*#Due-in, Advance Receipt, Due Verification 527R*Receipt, Inquiry, Response & Material Receipt Acknowledgement 810LLogistics Bill 842A/W*Supply Discrepancy Report Submission 842S/Q*Storage Quality Control Report 842S/R*Storage Quality Control Report Reply 846AAsset Reclassification 846FAmmunition Freeze/Unfreeze 846I Asset Status Inquiry/Report 846R*Location Reconciliation Request 856*Advance Ship Notice 856R*Shipment Status Materiel Return 856S*Shipment Status 861*Acceptance Report 867I*Issue 870MMaterial Returns Supply Status 940RMaterial Release 945A*Material Release Advice 947I*Inventory Adjustment

7. 7 BACKUP CHARTS

8. JLB Agreed: Way Ahead  Validate/Mature value propositions/chains considering: -Benefits of using IUID -Marking scope/costs -Companion AIT/AIS requirements/costs  Conduct integrated requirements analysis  Determine policy and guidance updates consistent with 1 and 2  Continue to mature service-specific IUID/SIM implementation plans based on: -OSD Policy/Guidance -Prioritized Requirements  Budget/Resource  Implement across DoD 8 Actions Complete Aug 2009 Nov 2009 Jan 2010 A unified view and synchronized actions needed to leverage past work and move efficiently and effectively forward Execute Via Task Force That Leverages Existing Work Groups and Progress

9. 9 1.Receive updates to collect UII(s) (i.e. 856 and PMR (527D) with UII flag (see note 1 below) 2.If necessary, prompt user to collect UII(s) via AIT 3.If evidence of tampering, prompt user to collect UII(s) on the item 4.Send update to ICP of which UII has been received (ICP keeps track of UIIs by storage depot) (i.e. 527R Receipt) 5.Send update to WAWF for acceptance (i.e. 861 to WAWF - see 861 rules for inclusion of UIIs (see note 2) 6.Store UIIs in warehouse mgt system 7.When prompted by receiver, print new packaging label with UII(s) in PDF 417 format 8.If UII mismatches occur, system will prompt discrepancy actions (See Discrepancy Reporting Slides) Note 1: FLIS IUID designator being considered; may obviate need for 527D flag Note 2: 861 is sent with UII(s) for any partial quantity received and accepted. UII(s) are not sent for total quantity accepted or total quantity not accepted. 527R includes UII(s) for all items received by supply condition, regardless of acceptance. Similar Depot Receipt flows exist for Redistribution Orders (RDOs) and Materiel Returns Program (MRP) Receiving Controlled Items by IUID UII from New Procurement (Distribution Depot) – Additional System Requirements (blue text indicates NEW system/DLMS requirements) DAAS 856 861 to WAWF Distribution Depots 527R 527D Inventory Control Point 527D 527R ERP DSS 861 from WAWF 856 861 GEX Update UID Registry UID Registry Manufacturers/ Suppliers 856 IUID Material 861 from DSS to WAWF from WAWF to ICP WAWF 856 Update UID Registry UID Registry Manufacturers/ Suppliers 856 IUID Material 861 from DSS to WAWF from WAWF to ICP WAWF 856 Update UID Registry UID Registry Manufacturers/ Suppliers 856 IUID Material 861 from DSS to WAWF from WAWF to ICP WAWF 856

10. 10 1.Establish due-in based on requisition submission. 2.Receive updates to collect UII(s) based on 856S. 3.If necessary, prompt user to collect UII(s) via AIT 4.If evidence of tampering, prompt user to collect UII(s) on the item. 5.Process receipt into retail inventory with UIIs and store UIIs in warehouse mgt system 6.Send update to ICP of which UII(s) has been received (i.e. 527R MRA) (See alternative approaches) 7.When prompted by receiver, print new packaging label with UII(s) in PDF 417 format 8.If UII mismatches occur between 856S and materiel received, system will execute discrepancy actions (See Discrepancy Reporting Slides) Retail Receiving Controlled Items Requisitioned Received from Depot Stock – Additional System Requirements DAAS 856S DoD Logistics AIS Customer Distribution Depots 856S 945A or 867I IUID Material 527R MRA Inventory Control Point 527R ERP DSS SBSS SARSS DoD Logistics AIS RSUPPLY OR 945A or 867I

11. 11 1.ICP continues to send MRO (940R) to depot without UII(s) 2.ICP receives MRC or Issue (945A/867I see note below*), with UIIs, in response to MRO 3.ICP decrements balance by UII in MRC/Issue. Reconciliation process needed to resolve UII mismatches between 945A/867I and UII on ICP records 4.ICP maintains visibility of those debited UIIs identified in MRC/Issue for comparison to customer 527R MRA UIIs 5.ICP receives MRA with UII(s) (see alternative approaches) 6.ICP must reconcile UII mismatches between MRA and ICP issue records * Service/Agency transaction usages differ, some ICPs use MRC to decrement the inventory balance others use the issue transaction. Question: Standardize versus use of two different transactions sent by the depot dependent on the service/agency recipient. Similar Issue flows exist for RDOs and Lateral Redistribution Orders (LROs) Issuing Controlled IUID Items from Depot Stock Materiel Release Orders (MROs) Additional System Requirements DAAS 856S DoD Logistics AIS Customer Distribution Depots 856S 945A or 867I IUID Material 527R MRA Inventory Control Point 527R MRA ERP DSS SBSS SARSS DoD Logistics AIS RSUPPLY OR 945A or 867I 940R

12. 12 1.Owner/Manager initiates scheduled and special physical inventories using the Physical Inventory Request (846P) which is sent to the depot. (The new FLIS IUID designator for the NSN serves as the Key to indicate physical inventory by UII required) 2.Depots initiate scheduled, special, and spot physical inventories. (The new FLIS IUID designator will indicate to the owner/manager that the inventory will be conducted by UII.) –Spot Inventory initiated due to a total or partial denial. –Special inventory initiated owner/manager or depot as a result of location survey, location reconciliation, unresolved mismatches, etc. 3.Depot must verify, by physical location, all UIIs by condition code against the accountable record. a. Results of UII differences are reported to the owner/manager via 947I. Details for reporting UII differences to the owner/manager must be determined (e.g., when only UII has mismatches - no quantity or condition change) b.Mismatches on UII-- Causative research is required on any discrepancies found as a result of the inventory. 4.Owner/Manager must verify reported UII and condition code against their record a.Mismatches require new reporting procedures of UIIs and/or condition code of items with depot accountable record. 5.Owner/manager requests a transaction history via a 846P and the depot responds with the historical balance affecting transactions (527R 867I, 945A, and 947I all with the UII included. (For inventory purposes, the inventory line item for Controlled UII Item will be defined as stock number + supply condition code + UII.) [1] [1] The physical inventory interface transaction between the owner/manager and the depot will not be required with the establishment of single shared-asset balance. Physical Inventory Control Program/Physical Inventory for Controlled UII Items (Depot) Additional System Requirements DAAS 947I Distribution Depots 846P Owner/ Manager 846P947I ERP DSS

13. 13 Scope of IUID Items NWRM CLASSIFIED SENSITIVE ITEMS – NOT CLASSIFIED Serialized CSI – Not Classified or Sensitive (NCS) All Other DLRs over $5K All Other Consumables Over $5K 5,000 NSNs 12,000 Storage Locations 9M Eaches Tracked by Supply and Maintenance Tracked by MX No Tracking All NSNs over $5K 351,143 NSNs ~ 842,000 Storage Locations ~ 631M Eaches 500 NSNs ~1,200 Storage Location.9M Eaches All figures are estimates pending OSD validation

14. Task Force Logistic Nodes - Definitions Node Definitions: a. Acquisition Logistics Planning: Program management processes to define logistics requirements for life cycle management of weapon systems and subsystems. b. Suppliers: Inventory Control Point functions and manufacturers actions to provide a part to the logistics domain, including both organic and commercial activities. c. Distribution Centers: Parts and materiel in storage awaiting movement to other nodes of the value chains. d. Transportation: Actions required to move parts and materiel between nodes. e. Base and Forward Supply: Actions at a local inventory site to provide materiel to customers. This can include local supply activities in support of depot activities. f. Depot Maintenance: Actions taken to perform higher level maintenance, overhaul, rebuild, and repair regardless of location. g. Field Level Maintenance: Intermediate and organizational maintenance in support of customer units and activities. h. In Service Engineering and Logistics Analysis: Investigation and evaluation of operating systems and components to assess need for revised procedures or design. i. Field Activities and Operations: Actions taken by units to operate, or prepare to operate, equipment and weapon systems. j. Disposal: Actions taken to sell, destroy, demilitarize or otherwise remove military materiel from the inventory. 14