Capturing value from Item Unique Identification (IUID)

CAPTURING VALUE FROM ITEM UNIQUE IDENTIFICATION (IUID)

By Alexey Salamini

B.S.E. Mechanical Engineering, Princeton University, 1999

Submitted to the Department of Mechanical Engineering and the Sloan School of Management in partial fulfillment of the requirements for the degrees of

Master of Science in Mechanical Engineering

AND

Master of Business Administration

In conjunction with the Leaders for Manufacturing Program at the Massachusetts Institute of Technology

June 2005

C Massachusetts Institute of Technology, 2006. All rights reserved.

Signature of Author

May 6, 2006

i epartment of Mechanical Engineering Sloan School of Management Certified by _

Daniel Whitney Senior Research Scientist Department of Mechanical Engineering Thesis Supervisor Certified by _ _ _ _w__ _ _ _ _

Koy w eiscn

Professor of Statistics and Management Science Sloan School of Management

A Thesis Snnervisor

Accepted by

/ Debbie Berechman utive Director, Masters Program Sloan School af Management Accepted by

Profesfor Lallit Anand Chairman, Graduate Committee Department of Mechanical Engineering

MASSACHUSETTS INSTITUTE

OF TECHNOLYY

JUL

1

4

2006

-i

1

CAPTURING VALUE FROM ITEM UNIQUE IDENTIFICATION (IUID)

by

Alexey Salamini

Submitted to the Department of Mechanical Engineering and the Sloan School of Management

on May 6, 2006 in partial fulfillment of the requirements for the degrees of Master of Science in Mechanical Engineering and

Master of Business Administration Abstract

The Department of Defense has issued a mandate aimed at improving its capabilities in determining the location, value, quantity, and condition of government assets. The mandate requires marking specified assemblies and components with a unique identifier using two-dimensional data matrix technology. Item Unique Identification (IUID), comprised of data matrix technology and the Unique Item Identifier (UII) data construct, was chosen to create a global standard for identification and because it showed promise in providing lifetime tracking of assets.

Currently, Raytheon's implementation strategy to address the mandate has focused solely on compliance and does not aim to extract value from the IUID mandate or the UII construct. However there are many potential benefits of these capabilities. This thesis attempts to identify potential usage scenarios, determine if they are a worthwhile investment, and develop a more deliberate IUID strategy for Raytheon as a corporation within the context of the existing tracking and information landscape.

It was determined that company wide pre-tax net savings of $10.6 ( 5.4) Million annually are possible from leveraging IUID technology in repair operations alone. This study recommends a pilot program and if successful, to continue to leverage IUID in those repair programs with: more than 500 units processed annually, more than five workstations, and an IUID requirement in place. This study also recommends that Raytheon should not mark above contractual requirements but should encourage customers to implement IUID marking for high volume programs.

This study led to additional recommendations for operations strategy at Raytheon. Automated rather than manual (keystrokes) data entry should be promoted in all operations; specifically in high volume applications. Raytheon should also make a practice of purchasing scanners that detect both bar codes and data matrices for all operations. Finally, the UII construct should be adopted in company wide operations independent of which technology (bar code, 2D Matrix, or Radio Frequency

Identification (RFID)) is used to read or deliver it. Thesis Supervisor: Daniel Whitney

Title: Senior Research Scientist, Department of Mechanical Engineering Thesis Supervisor: Roy Welsch

Title: Professor of Statistics and Management Science, Sloan School of Management

Acknowledgements

I would like to thank Raytheon for its support of the Leaders for Manufacturing (LFM)

program which has indirectly paid for my education. Without this fellowship, I would

not have had the opportunity to attend graduate school.

Thanks to Brad Koetje, Dennis Coyner, Beryl McCadden, Andy Blanco, Daniel Whitney,

Roy Welsch, and Gilbert Dias for their extensive support and mentorship through this

project. I would specifically like to thank Dennis and Brad for allowing me the flexibility

to choose my own direction for this thesis. The house on the beach was great as well.

Also, I would like to thank Don Rosenfeld and the administrative staff of this unique dual

degree program. You gave me the wonderful opportunity to explore the wealth of

knowledge at the institute which led me to discover my passion in medical device design.

Chris Kilburn-Peterson, thank you for introducing me to this amazing program and being

my guiding light during the rough spots. You held my hand from application to

graduation.

Finally, I would like to thank my parents and my sister for pushing me to attend graduate

school and for continuing to peel me off the ground when I fall. You have been the best

teachers I have ever had ...

"The insight provided through this basic, but effective means of uniquely and

unambiguously identifying parts is only limited by the ingenuity of smart people with creative ideas and our combined ability to recognize its value."

Table of Contents

ACKNOWLEDGEMENTS... 5

LIST OF FIGURES ... 9

LIST OF TABLES ... 9

THE SHORT LIST OF ACRONYMS... 10

1 INTRODUCTION ... 11

1.1 COMPANY BACKGROUND... 11

1.2 HYPOTHESIS... 11

1.3 T HESIS STRU CTURE... 12

2 THE MANDATE ... 14

2 .1 T H E P RO BLEM ... 14

2 .2 T H E N EED ... 15

2.3 V ISION AND SCO PE... 15

3 THE TECHNOLOGY ... 20

3.1 TECHNOLOGY OVERVIEW ... 20

3.2 COMPETITIVE TECHNOLOGIES... 26

3.3 ADVANTAGES AND DISADVANTAGES OF THE DATA MATRIX... 28

3.4 B EN CHM ARKIN G ... 29

4 THE CURRENT STATE ... 31

4.1 CURRENT IMPLEMENTATION STRATEGY AT RAYTHEON FOR ITEM UNIQUE IDENTIFICATION... 31

4.2 CURRENT TRACKING AND INFORMATION LANDSCAPE... 35

4.3 RADIO FREQUENCY IDENTIFICATION IN USE AT RAYTHEON ... 40

5 NEED FINDING ... 44

5.1 M AP O F R AYTHEON ... 44

5.2 FO CU S G RO U PS ... 45

5.3 SELECTIO N PROCESS ... 53

6 SCENARIO EVALUATION: REPAIR OPERATIONS... 56

7 ANALYSIS ... 60

7.1 PART I: A SSU M PTIONS: ... 6 1 7.2 PART

II: CHANCE OF ERROR...

62

7.3 PART III: FIXED AND VARIABLE COSTS/SAVINGS CALCULATIONS... 64

7.4 PART IV: ERROR ANALYSIS ... 65

8 RESULTS ... 67

8.1 FIXED AND VARIABLE SAVINGS/LOSSES FROM SCENARIO IMPLEMENTATION ... 67

8.2 BURDEN VS. No BURDEN ... 68

8.3 TEN YEAR CUMULATIVE SAVINGS AND RETURN ON INVESTMENT ... 69

8.4 LABOR VS. MATERIAL SAVINGS AND DISCOUNTED VS. NON DISCOUNTED SAVINGS... 71

8.5 R EA LITY C H EC K ... 73

9 CONCLUSIONS ... 74

9.1 RETURN ON INVESTMENT - SHOW ME THE MONEY! ... 74

9.2 TECHNOLOGY EVALUATION - WHERE IS THIS TECHNOLOGY GOING? ... 75

10 RECOMMENDATIONS... 78

10.1 TACTICAL RECOM M ENDATIONS ... 78

10.2 CORPORATE IUID IMPLEMENTATION STRATEGY RECOMMENDATIONS ... 78

10.3 CORPORATE OPERATIONS STRATEGY RECOMMENDATIONS... 79

A PPENDIX ... 81

APPENDIX A: SUMMARY OF CALCULATIONS AND SENSITIVITY... 81

A PPENDIX B : A SSUM PTIONS... 82

A PPENDIX C : C ALCULATIONS... 84

APPENDIX D: SELECTED ERROR ANALYSIS: PROGRAM A CALCULATIONS AND EXTRAPOLATION ACROSS A L L P B L S ... 86

BIBLIO GRAPH Y ... 90

List of Figures

FIGURE 1: SCOPE OF IUID MANDATE IN ASSEMBLY HIERARCHY ... 18

FIGURE 2: DOT-PEENED MATRIX, SERIAL NUMBER ON CHIP, COGNEX DATAMAN MATRIX READER... 20

FIGURE 3: DIFFERENT MARKING METHODS (L-R) INK JET, CHEMICAL ETCH, DOT PEEN, LASER ENGRAVE. 22 FIGURE 4: TECHNOLOGY FOOTPRINT FOR 90BITS DATA STRING (NOT TO SCALE)' ... 28

FIGURE 5: TECHNOLOGIES, CONSTRUCTS, AND ENABLERS: RAYTHEON TRACKING AND INFORMATION L A N D SC A PE ... 36

FIGURE 6: MANUFACTURING PROCESS MAP OF RAYTHEON... 44

FIGURE 7: N EED FINDING PROCESS... 53

FIGURE 8: NEED SEARCH NARROWED TO THREE SPECIFC OPPORTUNITES... 59

FIGURE 9: ANALYSIS M ETHODOLOGY ... 61

FIGURE 10: LABOR AND MATERIAL SAVINGS OVER TIME: PROGRAM A OVER TIME... 72

FIGURE 11: SIGNIFICANCE OF DISCOUNT RATE... 72

List of Tables

TABLE 1: GOVERNMENT VISION OF RFID AND IUID MANDATES ... 17

TABLE 2: SURVEY OF REPRESENTATIVE SAMPLE MARKING COMPANIES... 23

TABLE 3: ROLE OF DISCIPLINES IN IUID COMPLIANCE... 32

TABLE 4: CONSTRUCTS ON LABELED INVENTORY IN WAREHOUSE AUTOMATION CONTROL (WAC)... 37

TABLE 5: DIFFERENT DATA STRUCTURES FOR PARTS MANUFACTURED AT RAYTHEON (MAKE ITEMS) ... 38

TABLE 6: RELEVANT PROGRAM BASED ASSUMPTIONS ... 62

TABLE 7: LOGIC TREE FOR CHANCE OF ERROR ... 64

TABLE 8: PROBABILITIES FOR ERROR**... 64

TABLE 9: SAM PLE ERROR A NALYSIS... 66

TABLE 10: FIXED AND VARIABLE COSTS/SAVINGS ACROSS SAMPLE PROGRAMS ... 68

TABLE 11: FIXED AND VARIABLE COSTS/SAVINGS EXTRAPOLATED ACROSS PBLS, REPAIRS, AND O PER A T IO N S ... 6 8 TABLE 12: TEN YEAR FUTURE CASH FLOW AND RETURN ON INVESTMENT FOR PROGRAM A UNDER THE FU LL B URDON SCENARIO ... 70

TABLE 13: TEN YEAR RETURN ON INVESTMENT ... 71

The SHORT List of Acronyms

1. IUID: Item Unique Identification 2. UII: Unique Item Identifier

3. RFID: Radio Frequency Identification 4. PBL: Performance Based Logistics

1 Introduction

1.1 Company Background

With over $20 Billion dollars per year in revenue and over 80,000 employees worldwide, "Raytheon Corporation is an industry leader in defense and government electronics, space, information technology, technical services, and business aviation and special mission aircraft." 1

This five month study was carried out at one of the seven Raytheon businesses, Space and Airborne Systems in El Segundo, CA. Space and Airborne Systems produces satellites, airborne radars and detection systems, and specializes in sensing and

electronics systems for both airborne and space applications. Compared with the other businesses of Raytheon, the product portfolio of Space and Airborne Systems in particular can be characterized as low volume and high variation.

Although this study was centered out of Space and Airborne Systems, it was closely followed by Raytheon Corporate. The scope of the research and the application of the findings have spread across several businesses including Integrated Defense Systems, Network Centric Systems, Raytheon Missile Systems, and Raytheon Technical Services LLC.

1.2 Hypothesis

As supply chains and the logistics required to support them have matured, more advanced tracking and tracing technologies have been adopted. Various systems which comprise a holistic tracking or identification technology can help supply a host of information (some needed and some not) about location, identification, and history of materiel.

Raytheon Company: About Us. Raytheon Company. September 25th 2005, <http://www.raytheon.com (Home>About Us)>.

The Department of Defense has issued a mandate called Item Unique Identification (IUID) intended to uniquely mark its assets. This construct was created with the intent to facilitate access to information on materiel. Currently, the Raytheon implementation strategy for IUID is aimed solely at compliance and does not aim to extract value from IUID.

The hypothesis is that there could be potential benefits of this identification capability. This thesis will examine previous research in this area, identify potential usage scenarios for this technology, determine if they are a worthwhile investment, and apply the findings to more generalized frameworks representing a broader product portfolio. The findings of this thesis will help develop a more deliberate IUID strategy for Raytheon as a corporation as well as influence the policy of IUID adoption amongst other stakeholders including the customer, primary contractors, and suppliers.

1.3 Thesis Structure

This thesis is organized by ten chapters which are outlined below:

1. Introduction: This introduction provides a short background on Raytheon, the motivation of the project and insight into the structure of the thesis.

2. The Mandate: This chapter introduces the problems unique identification is attempting to address through Item Unique Identification policy. It also describes the vision for the future of the technology and the scope of the current and

anticipated implementations.

3. The Technology: This section gives an introduction into the technology behind mass unique serialization and introduces the important elements of marking, reading, and information technology infrastructure. The advantages and

disadvantages of IUID technology are then compared to substitute technologies. Finally, benchmarking of past IUID implementations highlight potential

4. The Current State: This chapter highlights Raytheon's current implementation strategy for IUID and how it correlates with its existing and anticipated infrastructure to support tracking and information around the company.

5. Need Finding: In the search for potential usages scenarios for this technology, it was important to perform a comprehensive search across the company's

functions. This chapter provides insight into the production life-cycle at

Raytheon and how each function plays a role in that bigger picture. The needs of specific functions are discussed and the study narrows focus to one need area where it is hypothesized that IUID could add the most value

6. Scenario Evaluation: Repair Operations: This chapter focuses on the specific needs for identification within the repair process and how IUID could satisfy those needs.

7. Analysis: The analysis quantifies potential savings derived from using IUID in four different repair programs.

8. Results: This section reviews the validity and applicability of the analysis and determines financial return on investment over a ten year time horizon.

9. Conclusions: Through interpretation of the analytical results, a technology review, and qualitative system analysis this chapter assesses the long term implications of using IUID in the repair and manufacturing process.

10. Recommendations: This chapter provides concrete recommendations for the Corporate Raytheon IUID implementation team and the Operations Strategy team.

2 The Mandate

2.1 The Problem

The Item Unique Identification (IUID) Program was started by the Department of Defense in response to the Chief Financial Officers Act of 1990, and subsequent acts, which were instituted to promote accountability and reduce costs. The Department of Defense highlighted the need for improved tracking and valuation of plant, property, and equipment to not only address Congress's concerns, but to comply with Federal

2

Accounting Standards Advisory Board's requirements.

Added urgency from a September 1992 report for the General Accounting Office stated "... the federal government lacks complete and reliable information for reporting inventory and other property and equipment and cannot determine that all assets are reported, verify the existence of inventory, or substantiate the amount of reported inventory and property."3

Meanwhile, as pressure came from the accounting departments there were also problems arising from the battle field. The Gulf war in 1991 and 1992, the United States' first major combat operations since Vietnam, uncovered that often supplies were ordered that were not needed due to limited asset visibility on the battlefield.4 _{Tracking the}

government's capabilities on the ground was in fact crucial to an effective deployment and helped reinforce the need for improved logistical capabilities. This need is also applicable off the battlefield in government responses to natural disasters such as hurricanes or earthquakes.

2 Office of the Under Secretary of Defense Materiel Readiness and Maintenance Policy, "Department of

Defense Unique Identification Implementation plan for Maintenance Depots", May 2005, p1 1. 3 Ibid.

2.2 The Need

The Department of Defense identified the need for a global standard for unique identification that is applicable across all elements of the value chain. Constructs and technologies vary widely even within departments of the government, not to mention across the entire value chain. The Department of Defense needed a standard that would be applicable across the entire industry. This standard would enable improved item management and accountability as well as cleaner audit opinions for financial statements.

There was also a need for lifetime tracking of parts, so the methodology and technology was chosen to withstand elements of weather and any environmental limitations that an asset may be exposed to. In addition, the database architecture needed to be easily transferable and compatible throughout the value chain to promote information sharing with the use of a universal construct.

2.3 Vision and Scope

The Department of Defense's vision is that the application of these capabilities will enable and improve logistics, operations, inventory management, repair, maintenance, property, and many unforeseen needs of the future.5 _{"The insight provided through this}

basic, but effective means of uniquely and unambiguously identifying parts is only limited by the ingenuity of smart people with creative ideas and our combined ability to recognize its value."6

Three alternatives were considered by the Department of Defense which eventually led to the implementation of IUID. The first was to use existing marking approaches and tracking technologies, the second was putting the burden on the Department of Defense for marking all items as they enter inventory or inspection, and the third (and only

5 Ibid.

6 The Office of the Under Secretary of Defense for Acquisition Technology and Logistics, "Cost Benefit Analysis of Unique Identification (UID)", March 2005, p8.

accepted alternative) was to develop an industry wide standard marking methodology which leverages existing commercial marking and reading methods.

On July 29, 2003 the department of defense issued a memorandum "Policy for Unique Identification of Tangible Items - New Equipment, Major Modifications, and

Reprocurement of Equipment and Spares" to apply IUID for all solicitations of new equipment since January 1, 2004.7 All new equipment, in this case means all inbound materiel. In reality, IUID marking for new equipment has been negotiated on a contract by contract basis and the actual marking of items only began on a select few programs at Raytheon in spring of 2005. This is primarily due to the speed in which IUID has

appeared in government contracts. The slow adaptation of the mandate has delayed much of the haste in compliance.

In a major update dated December 23, 2004, a memorandum entitled "Policy for Unique Identification of Tangible Personal Property Legacy Items in Inventory and Operational Use, including Government Furnished Property (GFP)" extended the scope of IUID from simply newly manufactured items to all significant items in the Department of Defense inventory. Government furnished property includes; special tooling, special test equipment, industrial tooling, and other plant equipment. In yet another update to the policy an IUID registry has been created which catalogues all property owned by the government. The registry has led to the establishment of a virtual Unique Item Identifier which enables a data base entry of a Unique Item Identifier and its associated pedigree data, while postponing the physical marking of the item.9

There are also mandates in place regarding use of Radio Frequency Identification (RFID) tags for tracking delivered items from point A to point B. Table 1 highlights how RFID, IUID and bar codes coexist.

7 Office Of the Under Secretary of Defense, "Policy for Unique Identification (UID) of Tangible Items -New Equipment, Major Modifications, and Reprocurements of Equipment and Spares", July, 2 9th 2003.

8 Office of the Under Secretary of Defense Materiel Readiness and Maintenance Policy, "Department of Defense Unique Identification Implementation plan for Maintenance Depots", May 2005, p11.

9 Office of the Under Secretary of Defense, "Guidelines for the Virtual Unique Item Identifier", December 29, 2004, p1.

Table 1: Government vision of RFID and IUID Mandates

urnos

W..

Government Vision Current Landscape at Raytheon

Pallet Level: Passive Bar Code,

RFID Tag Passive REID Tag (starting)

Carton Passive Bar Code

Level: RFID Tag

Package Level: Passive Bar Code

RFID Tag

Assembly IUID Tag Bar Code

Level: (when (some), IUID

specified) Tag (starting)

Sub-Assembly IUID Tag Bar Code

Level: (when (some)

specified) Inventory

Stores: Lots, Items, or Kit

Bar Code

The Department of Defense has initially drawn a line in the sand indicating that all

delivered materiel above $5000 in value must be marked provided that it is on their own

Contract Line Item Number (CLIN) or sub-Contract Line Item Number. The mandate

becomes even more far reaching in the inclusion of all "Department of Defense serially

managed parts." (These are not the same as Raytheon serial managed parts.) The

mandate further highlights that any materiel or subcomponents that the government

chooses to designate for IUID (even if it is under $5000) can be marked. This gives the

government a fair bit of flexibility in how broadly it wishes to unroll Item Unique

Identification and the contractual power to enforce it.

The reason for the flexibility in the mandate is that the government itself does not know

yet exactly in what arena its investment in IUID will pay off most. The Department of

Defense can tailor the mandate to fit its needs depending on what application extracts the

most value: virtual IUID, distinguishing items that are visually similar, high volume

programs, high value hardware, or high mobility hardware. This study provides specific

recommendations in reference to these criteria on how to extract the most value from

IUID.

Figure 1 shows a framework of assembly hierarchy and how much flexibility the

government has in its mandate in terms of the scope of IUID impact. The dotted line

indicates the domain in which the scope of the mandate can include.

High Level Marking

Low Level Marking

Battleship System LRU SRU Repairable Items Reportable Items Resistor

(Lkne Replaceable Unit) (Subassembly Replaceable Unit) (Serially tracked items)

Scope of Govemment Mandate Figure 1: Scope of IUID Mandate in Assembly Hierarchy

The new F/A-22 is a good example of the scope the government expects from IUID. The

plane contains approximately 30,098 parts, approximately 1,727 of those are tracked and

approximately 900 will have IUID marks on them.

Although the Department of Defense will indirectly pay for the cost of IUID

implementation, the burden of the direct costs of the marking equipment is on the

suppliers. The engineering department of the supplier is responsible for determining the

marking type and method. Drawing changes to update existing (legacy) products will be

financed by the government and marking costs will be rolled into the contract for the item

itself. This cost structure gives neither an incentive nor a disincentive for the suppliers to

use IUID in any way. This thesis directly addresses the cost structure of compliance and

determines if the IUID mandate is an opportunity worth exploiting. Now that the

government mandate has been introduced, specifics of the technology behind IUID will

be discussed.

3 The Technology

This section gives an introduction into the technology behind mass unique serialization

and introduces the important elements of marking, reading and information technology

infrastructure. The advantages and disadvantages of IUID technology are also compared

to substitute technologies.

3.1 Technology Overview

The technology chosen to bring Item Unique Identification to life was the two

dimensional data matrix, a more advanced form of the bar code, shown in Figure 2. The

use of bar codes as a means for inputting data quickly was conceptualized in the 1930s,

invented in the late 1940s and early 1950s, and commercialized in the 1960s. It was soon

realized that a global standard needed to be developed, but it was not until 1974 when

this standard was implemented.

In the late 1990's the National Aeronautics and Space Administration (NASA), in

partnership with the bar coding industry, developed the two dimensional (2D) data matrix

as a successor of the traditional Bar Code. As shown in Figure 2, just with as the system

of bar codes, there is a marking process, a reading process and a link to a database.

Figure 2: Dot-Peened Matrix, Serial Number on Chip, Cognex Dataman Matrix Readerl

1 Cognex: In-Sight Fixed-Mount ID Readers, Cognex Corporation, November 2 2"d 2005, <http://www.cognex.com/products/ID/InSight-IDReaders.asp>.

3.1.1 The Mark

The mark appears as a matrix of dots as shown in Figure 2. Unlike bar code technology, which relies on the relative position and size of the lines to contain information, data matrix technology measures the presence or absence of a dot in the matrix. The symbol is redundant which allows for up to 30% of the mark to be destroyed without

compromising data integrity. However, data can be compromised through isolated destruction of four specific bits.

3.1.1.1 Construct

The string of data that a mark holds which enables uniqueness is called the Unique Item Identifier (UII) and has been standardized in the form of two different constructs.

-Construct 1: Commercial and Government Entity Code*, Serial Number

-Construct 2: Commercial and Government Entity Code*, Part Number, Serial Number

* Commercial and Government Entity (CAGE) Code is a number that indicates the location of manufacture

Construct 1 applies only if all parts are serialized within an Enterprise. Since this is not the case within Raytheon, Construct 2 is being used.

3.1.1.2 Marking Methods

As shown in Figure 3, the mark of a 2D data matrix can be created in several different ways on a variety of different surfaces and materials. The available marking techniques ensure that there are virtually no limits on the types of materials that be marked with the data matrix. Generally, there are two classifications of marking, intrusive and non-intrusive marking methods. Both can be used for either direct part marking or creating a label or a badge; specifics of these options will be discussed in 3.1.1.3. Intrusive marks may reduce the structural integrity of a part being marked while non-intrusive solutions do not.

Figure 3: Different Marking Methods (1-r) Ink Jet, Chemical Etch, Dot Peen, Laser Engrave"

Non Intrusive:

Ink-Jet: Ink-Jet printing can be used either for direct part marking or for generating

labels. Printers for Direct Part Marking are around $10,000, and printers for labels are in

the $3,000 range.'

2

Laser Bonding: Laser bonding is an additive process which heats a foreign material and

melts it over a part -

Laser cost $20k-60k.13

Other less common non-intrusive techniques include: laser engineered net shaping (same

as laser bonding, except weld pool is created on part), silk screen (stencil), liquid metal

jet, automated adhesive dispensing, casting, forging, and molding.

Intrusive Marking:

Dot Peen: Micro-Percussion through rapid local deformation of a surface with a carbide

or diamond tipped stylus can create the matrix of dots. Dot Peening is typically used on

metals. Prices range from $10k-$25kl

4

Laser Marking: Laser Marking includes Laser Coloring (discoloring material), Laser

Etching (melting material), Laser Engraving (vaporizing material), and several other

techniques. Laser Marking is typically used on hard materials like metals or printed

circuit boards. Prices range from $20k

-

$100k.1

5

" Ibid.

12 Office of the Under Secretary of Defense Materiel Readiness and Maintenance Policy, "Department of

Defense Unique Identification Implementation plan for Maintenance Depots", May 2005, p 3-12. " Ibid.

4 Ibid. '5Ibid.

Electro-Chemical Marking: Electro-Chemical Etching removes material through

electrolysis and the pattern is dictated by a stencil. The process is fairly manual and

slow. Prices for equipment range from $5k-$12k.

16

Other less common intrusive techniques include abrasive blasting, engraving, milling,

fabric embroidery/weaving.

Table 2 shows the relative cost of outsourcing versus in house marking using the different

marking methods. This thesis does not focus on the important engineering and business

decisions that are required to choose the appropriate marking method for compliance, but

understanding the scope of marking processes highlights the capabilities of the

technology.

Table 2: Survey of Representative Sample Marking Companies1 7

Approach Method Outsourced* In House Marking Breakeven Reader Type

Volume***

Gummed labels Polyester $0.10-$0.50 $2000 printer 5,300 Requires high

per label $700 software _{contrast readers}

$0.05 per label

Metal Foil $0.20-$1.00 $2000 printer 2500

per label $700 software $0.05 per label

Data Plates Plastic $0.50-$2.00 $5,000 machine 3,100

per label $0.50 per label

Metal $0.50-$3.00 $20,000 laser 7,800

per label $0.50 per label

Direct Part Inkjet $1.00 $10,000 machine 19,400 Requires low

Marking (DPM) per mark $0.50 per mark contrast reader

Chemical $2.00 $2000 Printer 1,800

Etching per mark $300 Chemetch

$700 Software $0.50 per mark

Dot Peening $3.00 $10,000 machine 3,300

per mark $0.10 per mark

Laser Bonding $2.00 $25,000 machine 14,500

per mark $0.30 per mark

Laser Etching $2.00 $25,000 machine 13,700

per mark $0.20 per mark

* Dependent on order quantities with minimum set-up charges of $200-$300

** Costs based upon non-complex part geometries and conditions for the part to be marked *** Assumes high end of outsourced cost range

16

Ibid.

17 The Office of the Under Secretary of Defense for Acquisition Technology and Logistics, "Cost Benefit Analysis of Unique Identification (UID)", March 2005, p5-6.

Through a simple analysis of the fixed and variable costs of outsourcing versus in house marking, the "break even" volume required to justify in house marking was calculated. As mentioned in more detail in Chapter 4, Raytheon intends to do in house, centralized marking by site. In light of the cost of marking and expected short term demand for marking volumes, this strategy matches the equipment purchasing plans that Raytheon is undertaking.

3.1.1.3 Direct Part Mark vs. Badge

One unique attribute of data matrix technology is that directly marking the physical part is possible. The alternative to direct part marking is a creating a badge and affixing it to a part. A badge can take the form of a sticker or a label (often metal) which can be marked and then affixed to the item.

Direct part marking often requires the part to be fixtured during marking which lends itself well to applications on assembly lines. Creating a badge which is attached to the product is generally easier for items of low production volume or items that are very bulky.

Gummed labels are usually the most inexpensive solution, but are only acceptable for parts that live in a fairly benign environment. Straying from direct part marking opens up the possibility for errors between the marking process and the affixing of the mark to an item. However, due to fixturing limitations mentioned above for direct part marking, a centralized marking area (if desired) for a larger subset of items generally can be achieved more easily through the use of badges or labels.

3.1.2 The Reader (and Verifier)

Data Matrix readers take the same physical form as traditional bar code readers and can either be hand held (human operated) or fixed mount for high speed assembly lines. The

technology behind reading a data matrix is based on a digital image rather than an optical sensor (usually infrared) which bar code scanners use, thus the reading technology is not compatible.

An image is needed to measure the absence or presence of the dots. Thus, the reading equipment has a large influence on how small the mark can be. Software and longer read times can make up for poor mark quality. Fixed mount readers can read 2D data matrices

at a rate of over 7,200 parts per minute. The range of costs for readers is between $800 and $3000. The MicroScan MS-Q Basic and Code Corp CR2 are well regarded cordless scanners in the $900 range which actually perform both barcode scanning and data matrix reading.'8 _{These models can automatically discriminate between all major 2-D matrix}

and linear bar code symbologies. An important note is that the cost of these scanners is only about $250 more than bar coding scanners widely used at Raytheon, the Symbol LS4004 and the cordless Intermec Sabre 1552.

The Department of Defense mandate currently requires verification of a two dimensional matrix shortly after marking. This step (not required for all uses outside of the

Department of Defense) is unique to the data matrix technology from traditional bar codes. The verification of a mark is essentially a report on the quality of the physical mark. This policy was instituted to create a standard due to the large variety of marking surfaces, and processes. In reality, as a process is fine tuned (especially in a higher volume setting) the need of the verification step is arguable. Verifiers cost between $10,000 and $12,000 USD and can also perform mark reading.19

3.1.3 The Database or Operations Software

Just as with other tracking technologies perhaps the most important feature of the Item Unique Identification does not lie in the mark or in the reading system, but rather in the

18 Cognex: In-Sight Fixed-Mount ID Readers, Cognex Corporation, November _{2 2}nd 2005,

<http://www.cognex.com/products/ID/InSight-IDReaders.asp>.

database and in the decision of how to utilize this information. IUID allows rapid access to an infinite amount of information that can be tied to a specific part such as:

" Test History

" Assembly/Production History (lot number, date, assembly technicians) " As-Built Configuration (Part(s)/assembly configuration and identification) " Repair History

* Deployment History * Usage History

The Department of Defense has initiated an IUID registry for all items that receive a Unique Item Identifier. This registry covers the entire spectrum of government assets from legacy property to new equipment. This registry is linked to Wide Area Work Flow (WAWF) which is an invoicing, shipping, receipt, and acceptance link to the customer. The registry can contain any amount of information pertaining to the item.

In many manufacturing and repair environments at Raytheon, Shop Floor Management systems, such as Visiprise Management, are designed to trace many of the pieces of the information listed above. With the software in place, adding readers as data input devices is as simple as plugging a keyboard into a computer.

3.2 Competitive Technologies

One Dimensional Bar Codes: One-dimensional bar codes are ubiquitous throughout supply chains and manufacturing operations. A bar code's biggest advantage is that it is inexpensive and biggest disadvantage is its limit in data storage capacity.

Two Dimensional Bar Codes: Two-dimensional bar codes function like bar codes in that the spacing and size of the lines dictate the information gathered from them; however unlike traditional bar codes where an optical sensor can read the code, a digital image is

required. Two-dimensional bar codes have higher storage capacity per unit area than traditional bar codes.

Memory Buttons: Memory buttons take the form of un-powered tags with read write memory which can store information about a specific item directly on the part. The information can be accessed through probes which can read or write information onto the tags. These tags are typically used in military, aerospace, industrial, utility,

transportation, and maintenance applications. Memory buttons minimize interaction with a central database and can be accessed anywhere or anytime without the need for additional infrastructure. Memory buttons are the most useful in environments where database access is challenging.

Radio Frequency Identification Tags: Radio Frequency Identification (RFID) Tags are small inductive coils that are attached to a small bit of memory. When the inductive coil is energized, the circuit is powered enough to transmit a small signal containing the data stored on the tag memory. An RFID tag's greatest advantage is that line of sight is not required to read the tag, enabling high throughput scanning with very little infrastructure. RFID's main disadvantage is that read rates are not 100% reliable and that they have spotty performance on metal objects.

There are two major types of RFID tags; Passive and Active tags. Passive Tags do not have a battery and are required to pass through a scanner at relatively close proximity (less than 3 meters) to be read. Active Tags do have batteries which help transmit the signal a longer distance and enable a tag's precise location to be pinpointed.

20 _{"What is a Contact Memory Button?" MacSema Incorporated, November 22nd, 2005}

<http://www.macsema.com/buttonmemory.htm>.

3.3 Advantages and Disadvantages of the Data Matrix

Advantages:

There are three main competitive advantages of data matrix technology. The

comprehension of these competitive advantages is fundamental to isolating the scenarios where a data matrix carrying a Unique Item Identifier will add the most value.

Size: The data density of a data matrix is an enormous advantage which facilitates marking of both extremely small parts and parts with little available surface area for marking or tagging. The ultimate limits on tag size are marking and reading resolution, which in theory have the capability to function at the nanometer level. However, some standards have dictated that the size range of a data matrix carrying 90 bits will be between 0.05 and 0.25 cm2. This is between 40 and 200 times smaller than standard RFID or Bar Code technology at the time of this publication. Figure 4 highlights the size differences between four technologies for 90 bits of information.

1D-

Barcode

=

20 cm

2

Passive RFID

=

11 c m

2

all

ggg||

2D-Barcode

10 cm

2

Data Matrix

.25 c m

2

Figure 4: Technology Footprint for 90bits data string (not to scale) ' 2

Robust: Direct part marking enables very durable marks which facilitate lifetime

tracking of items even in the harshest of environmental conditions. Due to the redundant nature of the code, even if part of the matrix is damaged it can still be read.

2 2

Ibid.

23 "Alien Technology - _{RFID Tags," Alien Technology, August}

16th 2005, <http://www.alientechnology.com/products/rfid tags.php>.

Cognex: In-Sight Fixed-Mount ID Readers, Cognex Corporation, November ₂₂nd 2005,

Universal: Due to the large number of marking techniques, there are few limitations on the types of materials and surfaces which a data matrix can be placed. This positions data matrix technology in a different space from RFID and bar codes because it is a universal standard that can mark all items, with no exceptions.

Disadvantages:

Line of Sight: Line of sight is required to read the mark.

Alignment: For automated reading of the mark, alignment is critical, while non-automated reading requires human intervention.

New Infrastructure: Marking equipment, reading equipment, and installation software is unique to this technology, thus no old infrastructure can be leveraged.

3.4 Benchmarking

Data matrix technology is most prevalent in the electronics and automotive industries. Solutions for electronics typically leverage the size attribute of data matrices, while solutions for automotive components usually leverage the robust attributes of the

technology. It should be noted that both of these industries usually use data matrices for high volume parts.

Other industries that have adopted data matrix technologies include aerospace, financial institutions, medical, pharmaceutical, packaging, equipment manufacturers, and

consumer goods manufacturers. Outlined below are four cases studies highlighting the application of data matrix technology:

Turbine Blades: Pratt and Whitney -The turbine module center was having difficulties using serial numbers to save inspection results of the static moment measurement of the airfoils. In addition, the center was having difficulty tracking one piece flow through work cells. Applying data matrices carrying the part serial number directly on the part

made saving inspection results easier and more reliable. In addition, automating serial number entry and eliminating manual human data entry by hand improved traceability of the turbines blades throughout the cell.25

Shop Floor: Hamilton Sundstrand -Assembly required multiple time consuming data entries of unique serial numbers. In addition, maintaining an accurate bill of materials (or AS-built configuration) with constant human intervention was challenging. Two

dimensional data matrices enabled a reduction in build time and an increased accuracy of database updates for bill of materials tracking.26

Cylinder Head Marking -Any form of mark on a cylinder must be robust in order to withstand the environmental constraints - data matrix technology satisfies this need. Data matrix technology enables cylinder heads to be tracked down to the specific lot number, date, and time of manufacture throughout the life of the parts.

Marking of Integrated Circuits -After a certain size threshold, marking small

electronic components with readable serial numbers becomes physically impossible. By marking small components with a data matrix, assemblers are able to verify component configurations during manufacture.28 _{OSRAM and other electronics companies routinely}

use data matrices to label their extremely small transistors, capacitors, and integrated circuits.

25 "Pratt and Whitney Parts Marking/UID", Pratt and Whitney 2D Part Marking & Traceability Initiative, December 2003.

26

Ibid.

2 Technifor: Success Stories, Technifor Corporation, November, 22 ", 2005, <http://www.technifor.com/htm/success/autoO I.htm>.

2 8

4 The Current State

Now that the mandate and the technology are better understood, this chapter will discuss Raytheon's current implementation strategy for IUID as well as the current tracking and information landscape at Raytheon.

4.1 Current Implementation Strategy at Raytheon for Item

Unique Identification

Not long after the July 29th 2003 department of defense issued memorandum, Raytheon formed a corporate task force to address the issue of compliance with the IUID. The following section summarizes some of the decisions made by Raytheon Corporate and the different businesses regarding its implementation strategy to date. This section will provide partial recommendations on these decisions, but they will be revisited after the

analysis on potential uses of IUID.

4.1.1 Loose Corporate IUID Strategy - Implementation left to

Businesses

It was determined that since the implications of IUID varied substantially across and even within businesses, each business should take charge of its own implementation plan. This strategy was also consistent to the culture of Raytheon which typically does not use the corporate platform as a strong base from which to launch initiatives. Raytheon Corporate has discovered that more autonomy by the business units generally leads to more success in implementation than dictating from above, even if the risk is run of inefficiencies due to miscommunications and lack of common standards.

Raytheon Corporate has taken the role of ensuring that each of the businesses is communicating effectively, and when possible, some standards of implementation strategy and best practices are shared.

Each business has carried out interdisciplinary workshops (Six Sigma Blitzes) to develop an implementation plan to prepare for IUID compliance. Compliance with IUID requires an extremely interdisciplinary effort between Contracts, Engineering, Supply Chain, Operations, Finance, and Quality. By default, Supply Chain was put in charge of leading IUID implementation. Since IUID compliance is viewed as more of a burden than a help, it is not a project that Supply Chain has been overly enthusiastic to take on. Table 3 highlights the role of each function for IUID compliance.

Table 3: Role of Disciplines in IUID compliance Function Role

Contracts Negotiate and Create IUID bid and contract appropriately Engineering Determine Mark Type

Supply Chain Supply Mark or Badge

Operations Ensure process for assembling mark or badge Finance Finance IUID program

Quality Verify that IUID is implemented in accordance to mandate

The loose corporate implementation strategy has been fairly successful at disseminating the proper information to the businesses while still communicating information across businesses. As IUID marking volumes increase it will become more evident how successful the loose governance has been based on the number of inconsistencies or problems that appear across programs.

4.1.2 Feet Dragging (Stalling)

Of the seven businesses nearly all of them have identified an IUID requirement in their contracts. However, as mentioned in Chapter 2, the speed at which the IUID clauses have entered into the contracts has not been swift. The first pilot for IUID compliance for Space and Airborne Systems (SAS) was executed in Forrest Mississippi in the spring of 2005.

Although the clock-speed of the defense industry is slow, there are more subtle reasons for the pace of the adoption of the mandate. Within the Department of Defense there is

disagreement over the breath of IUID implementation. This can be attributed to the fact that it is not clear yet exactly how much value its investment will bring and through which usage scenarios.

This reluctance and uncertainty within the government has, promoted a default strategy amongst contractors (including Boeing and Northrop Grumman) to discourage IUID from entering contracts and to perform only minimal compliance required. Rather than

stalling, Raytheon should be more proactive about asking its customer the important questions about the value add of specific implementations of IUID.

4.1.3 Centralized vs. Decentralized - Direct Part Mark vs. Badge

Raytheon's business is typically lower volume with higher differentiation between the types of products that it produces; known as "high mix, low volume." As with some of the industries that were benchmarked, this high mix low volume lends itself to centralized versus a project specific marking and verification strategy. Although reevaluating this decision is important, for the time being, Raytheon has made the correct decision on performing centralized marking.

As mentioned in section 3.1.1.3, centralized marking generally makes direct part marking much more difficult and necessitates that most of the marking is performed with labels or badges. The overwhelming majority of IUID marked parts at Raytheon will be

performed with stickers, the most inexpensive marking method. Direct part marking is occurring in isolated circumstances such as marking the outside of a missile for Raytheon Missile Systems. As mentioned in the marking section of Chapter 3 affixing metal badges to lower volume products makes a fair bit of sense for Raytheon and they should continue with this policy.

4.1.4 Supplier Marking

The Raytheon position on supplier marking has not been firmly established, and has essentially been handled on a case by case basis. The spirit of Item Unique Identification that the government and many of the major prime contractors are tying to impart is that supplier marking is a critical element to the system wide benefit of IUID. As the complexity in systems increases, the need for a global standard increases as well. In addition, by having suppliers mark items the opportunity for them to share information with Raytheon improves.

The concern with having Suppliers mark items is that Raytheon loses control of the process, and thus the quality. In certain circumstances, supplier marking is a necessity when direct shipments of parts from Suppliers to Customers are required (drop ship). Due to the $5000 dollar line item requirement of the mandate, there is also concern that by allowing suppliers to mark certain parts themselves, they are gaining information on the resale value of the goods being delivered.

While Raytheon should maintain quality standards for marking, it should be encouraging its suppliers to mark as much materiel as possible. It increases Raytheon's ability to use tracking upstream in the manufacturing process at no extra cost. Due to the flexibility and inconsistency in which IUID requirements have been placed in contracts, Raytheon should not be concerned with signaling pricing of materiel to a supplier.

4.1.5 Marking Beyond Contractual Requirement

Over the course of the past few years, there has been very little work (if any) to evaluate the potential benefits of IUID for Raytheon. Most of the evaluation has been speculation, but very little has been analytical. Thus, the implementation of virtual or physical

marking above and beyond contractual requirements of the mandate is a concept that has hardly been addressed. This study will directly address this question in the analysis.

4.2 Current Tracking and Information Landscape

Now that the IUID mandate, technology, and implementation strategy are understood, the current tracking and information landscape at Raytheon can be studied in more detail. Only once this current landscape is understood can a more deliberate IUID strategy be created for Raytheon.

The complexity of the Tracking and Information Landscape at Raytheon is truly

astonishing. The genesis of this complexity, some of which is a necessity, stems from a variety of different elements ranging from customers, to Raytheon's organizational structure, to the dynamics of the aerospace and defense industries.

In the past, the high mix low volume environment has yielded program or division based autonomy and power, rather than a more operations driven environment where a central architecture is adhered to by all platforms. For example, traceability and information requirements for a one-of-a-kind satellite vary substantially from higher volume radar systems. This has resulted in substantial complexity in the tracking and information landscape and architecture. Although balance of decision making power towards programs has its advantages, Raytheon has recently made a substantial effort to improve

consistent operational practices within Raytheon. In the future, programs will have less ability to design or set up their own tracking systems, but rather will work within the framework of Raytheon operations.

There have been several mergers and acquisitions in the defense industry which have also added an interesting element to the development of tracking and information

technologies. For example, two of Space and Airborne Systems major sites include the El Segundo campus which was originally Hughes Aircraft and the McKinney campus which was originally Texas Instruments. Old systems have often been retained, modified, and patched together.

Different customers also drive this complexity in the tracking and information landscape.

For example, bar code requirements between the navy, army, and the marines can vary

substantially; even if the same product is being used by both agencies.

On top of this all, different functions within the complex network of Raytheon require

specific tracking and information needs. Finance, procurement, invoicing and shipping,

point to point tracking, inventory management, shop floor management, and other

functions all have their own separate specialized software or data construct which is

optimized for their particular needs. Figure

5

highlights the complexity of the landscape

in terms of tracking technologies, data constructs, and strategic enablers. Section 4.2.1

and 4.2.2 will discuss in further detail two types of tracking technologies at Raytheon.

Technologies +

Data

Construct --+ Strategic Enabler

- Part Number * M-Trak (point to point tracking)

Bar Codes - Serial Number _{- Visiprise Management (Shop Floor}

Management)

RFID II D - License Plate Number

Tr m - Warehouse Automation Control

- Tracking Number

- Purchase Order -Kinaxis (Management Reports)

- ePro (Requisitions and Purchase orders) - Supplier Identifier

- Wide Area Work Flow (invoicing, receipt

-Serial Number and acceptance link to customer)

-National Stock Number - El Segundo North (Inventory,

Documentation Readable - Lot Number Requisitions, Manufacturing Resource

Serial - Reference Designator Planning Software)

Numbers . APEX (Financials)

... and more

..and more

Figure 5: Technologies, Constructs, and Enablers: Raytheon Tracking and Information Landscape

4.2.1 Study A: Warehouse and Store room Tracking

Example A: In a specific example, the Warehouse Automation Control (WAC) system

controls a specific subset of the inventory in El Segundo North. Table 4 shows the

different constructs on a Warehouse Automation Control label:

Table 4: Constructs on labeled inventory in Warehouse Automation Control (WAC)

Number Explanation of Number

Part Number Part number

Inventory Department Department number

Project Code Number linked to Project

Location Bulk, Carousel, etc

General Leger Account Billing account for the Inventory Department and Accountants Number

Purchase Order Number linked to a specific purchase

License Plate Number Unique number to a specific part number or set of part numbers RR Number Identification for the PO that arrives into Receiving and Warehouse Mid Receipt Number RR number is translated by Stores Transaction System (STS) and is an

input for WAC. It is also known as the Access Number.

Access Number Access number is the same number as the Mid Receipt #. It is used to generate the License Plate Number in WAC.

Other systems outside of Warehouse Automation Control, which support a different subset of inventory, run on different platforms which have different architectures.

All of the numbers on the label are printed and are intended to be human readable, however the only bar code on the label is the License Plate Number. This number, when entered into a computer, can bring up all of the information on the package. At the time of publication, the license plate number was a concept created only two years ago. The unique item identifier (UII) or a sequence of Ulls could easily replace the license plate number. It need not be represented in Data Matrix form, and can even be put on a bar code to not disrupt the technical infrastructure.

4.2.2 Study B: Operations and Kitting Tracking

4.2.2.1 Man-Man

-

Old Shop floor management system

For the old shop floor management system, parts manufactured at Raytheon (make items) have five structures shown in Table 5 which can be entered into the current shop floor management software package called ManMan.

Table 5: Different Data Structures for parts manufactured at Raytheon (Make Items) First Number Second Number

1 MFG Code Date Code

2 MFG Code Serial Number 3 Work Order Number Date Code

4 Work Order Number

5 Work Order Number Serial Number

Parts which are shipped to Raytheon from suppliers (Buy Items) have seven current structures for traceability! Thus, the current architecture for "make" or "buy" items can allow similar items to be marked twelve different ways. The Unique Item Identifier (UII) could easily replace these numbers and constructs.

4.2.3 New Shop Floor Management System - Visiprise Management

Raytheon is currently in the process of implementing a new software platform called Visiprise Management (VM) which is intended to link a variety of the strategic enablers and to automate and/or computerize a tremendous number of the operations that were previously performed manually and tracked on paper. Visiprise management creates a digital version of the Build History Books which document all of the operations, processes, and history behind all of the materials and parts which comprise a product. Currently many elements of the books require handwritten signatures for many of the operations. Visiprise management on the shop floor will enable better tracking of the bill of materials (configuration control) and will track parent child part architectures. The intention is that Visiprise Management will carry over to the repair side as well and will track all of the changes to the bill of materials as the assembly composition evolves.

An important clarification is that in many cases automated data entry has not happened with the initial shift to Visiprise Management. Shifting from a paperless system to a digital one means that instead of numbers handwritten on paper, they are, for the most part, manually entered by finger strokes on a keyboard into the computer system.

The vision is that eventually all parts that are assembled onto hardware will be bar code scanned ("wanded") so that the part numbers are uploaded automatically to the computer systems keeping track of the bill of materials. Some programs have already initiated automated data entry with bar code scanners. In subsequent chapters this thesis directly addresses the benefit of automated data entry versus manual keystrokes.

Current Visiprise Management Systems require the manual entry of three numbers to verify that a part has passed from a kit onto an assembly or that a process has happened.

1. Operation number: This refers to the operation that is being undergone. Example E4-Clean, Assemble xyz

2. Resource number: This number refers to which station number where the operation is occurring. Example: Station #2. Often there is only one station. 3. Shop Floor Control (SFC) number: This number is a composite between the part

number and the serial number.

The Shop Floor Control number is the only number for which there is a bar code on the kitted part. This number could easily be replaced by the unique item identifier which would create a consistency between shop floor management and warehouse management.

Visiprise Management was designed for higher volume facilities than Raytheon's. For low volume operations, the Shop Floor Control (or Unique Item Identifier) should probably be entered first which could then bring up defaults for the operation and

resource number. Again, it is important to remember that the Unique Item Identifier does not have to be carried in the form of the data matrix.

It is important to note that all of the research performed for this project was carried out prior to widespread Visiprise Management installation at Space and Airborne systems in El Segundo. However, recommendations for implementation and usage strategy for Unique Identification take the adoption of Visiprise Management into account.

4.2.4 Replace vs. Add: "If it ain't broke, don't fix it?"

One big problem that has plagued the tracking and information landscape has been unsuccessful attempts at fixing it. Band-Aids, while solving temporary or localized problems, often add complexity down the line. Simply adding new structures and constructs onto a flawed backbone is not a long term solution.

Item Unique Identification can fall into either category. If it is attempted to be used, it should not be used as a Band-Aid or add-on, it should be used to REPLACE a more complex construct and manual solution. Its emergence as a global standard should be leveraged especially as complexity of supply chains increase. If Item Unique

Identification is used with this mindset, it will be a success, but if it is used to piggyback off of existing technologies and constructs then it will add complexity to the entire system.

As will be discussed later in this study, in order for the UII to replace structures or even eventually bar codes, it must first prove itself in pilot studies and subsequently in specific usage scenarios, once it has been proven, then it might be a candidate for replacing other

architectures.

4.3 Radio Frequency Identification in Use at Raytheon

Currently, manual entry and barcodes dominate the data entry landscape at Raytheon. They are used in receiving, transfer, inspection, warehousing and testing. However, as highlighted in section 3.2, Radio Frequency Identification (RFID) tags represent a very rapidly evolving technology that has and will have vast implications on in the tracking and information landscape. It is clear that advances in RFID tag size, read rate, range, cost, and information density are making returns for candidate usage scenarios more and more likely. However, just as with IUID, a critical analytical evaluation of these usage scenarios is imperative.