A Hybrid Approach to the Valuation of RFID/MEMS Technology Applied to Ordnance Inventory

Abstract

The authors report on an analysis of the costs and benefits of the Advanced Technology Ordnance Surveillance (ATOS) program undertaken by the Department of Defense (DoD), initially through its office of Advanced Concept Technology Demonstration (ACTD). The ATOS program involves fielding Radio Frequency Identification/Microelectromechanical System (RFID/MEMS) technology. RFID technology consists of small radio tags that transmit a radio signal identifying the tagged item, often through an electronic product code (EPC, analogous to an Universal Product Code, or UPC). RFID applications in inventory management provide one kind of Automated Identification Technology (AIT) to facilitate Total Asset Visibility (TAV). Such visibility has many benefits, such as reducing inventory shrinkage and facilitating better customer service by tracking customer orders. RFID/MEMS extend RFID by providing more information than just the identity of the tagged item. In the case of the ATOS program, the MEMS technology provides information on the temperature, gravity, and humidity experienced by the tagged items. These factors are important because they correlate with the useful life and reliability of ordnance. This report presents an analysis of the costs and benefits of fielding (RFID/MEMS) technology for the management of ordnance inventory. The cost-benefit investigation used both qualitative and quantitative methods. Qualitative methods included a factorial structure for the non-cost related benefits of the implementation; quantitative methods involved a traditional ROI analysis to assess the value of implementing RFID, supplemented with a sensitivity and risk analysis of key factors. In a pilot survey of potential users of this technology, qualitative factors were shown to account for over half of the anticipated benefits. The scale of the financial benefits was sufficiently great to obviate the need for further analysis of qualitative factors.

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Document Details

Document Type
Technical Report
Publication Date
Nov 01, 2005
Accession Number
ADA441202

Entities

People

  • John E. Mutty
  • Kenneth H. Doerr
  • William R. Gates

Organizations

  • Naval Postgraduate School

Tags

Communities of Interest

  • Advanced Electronics
  • Cyber
  • Ground and Sea Platforms
  • Weapons Technologies

DTIC Thesaurus Topics

  • Advanced Manufacturing
  • Business Administration
  • Computer Programming
  • Cost Estimates
  • Department Of Defense
  • Economics
  • Frequency
  • Governments
  • Identification
  • Inventory
  • Microelectromechanical Systems
  • Operations Research
  • Procurement
  • Public Policy
  • Radio Frequency
  • Simulations
  • Weapons

Readers

  • Life Cycle Cost Analysis
  • Logistics and Supply Chain Management.

Technology Areas

  • Microelectronics
  • Microelectronics - Microelectromechanical Systems