Defense Logistics: DOD Has Addressed Most Reporting Requirements and Continues to Refine Its Asset Visibility Strategy
Published: 2015-12-22T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: DOD's 2014 Strategy states that to achieve a seamless and effective supply chain, DOD needs to have end-to-end visibility of its assets from acquisition to disposal and all points between. The Fiscal Year 2014 NDAA required DOD to submit to Congress a comprehensive strategy and plans for improving asset tracking and in-transit visibility, including 11 statutory elements that were specified in the mandate. The NDAA also included a provision that GAO assess the extent to which DOD's strategy and accompanying implementation plans include the 11 statutory elements; incorporate industry best practices related to automated information and data-capture technology; effectively execute DOD's IUID policies; and contain initiatives that align with DOD's overarching goals and objectives, and that have been implemented.
This report discusses the extent to which DOD's Strategy , plans and other documentation address the items specified by the mandate. GAO assessed DOD's 2014 Strategy and accompanying implementation plans submitted to Congress in response to the mandate, interviewed cognizant officials, and reviewed DOD's October 2015 Strategy.
section_title: What GAO Found
paragraphs: The Department of Defense's (DOD's) 2014 S trategy for Improving DOD Asset Visibility ( Strategy) and accompanying implementation plans fully address 6 of the 11 statutory elements required by the Fiscal Year 2014 National Defense Authorization Act (NDAA) and partially address the remaining 5. For example, the Strategy fully addressed asset visibility goals and objectives, and roles and responsibilities for overseeing its strategy, as required by the mandate. However, the Strategy did not fully address elements such as including an estimate of costs associated with executing its asset visibility implementation plans. In October 2015, DOD published its 2015 Strategy for Improving DOD Asset Visibility (2015 Strategy ) in which it more fully addressed 4 of the 5 elements that were partially addressed in the 2014 Strategy. For example, the 2015 Strategy fully addresses steps DOD is taking to facilitate collaboration with industry to capture best practices, as required by the mandate. However, with the 2015 Strategy , DOD has not fully addressed the cost estimates element for three of its 2014 implementation plans as GAO recommended in January 2015. DOD officials said that they did not include the cost estimates for three of the implementation plans because the funding for these plans was embedded within the overall program funding and in these cases components could not isolate detailed cost estimates. DOD officials said they plan to amend their guidance before the next update to the Strategy, expected in fall 2016, to instruct the components on how to explain and document such cases.
DOD has also taken other actions as GAO recommended in May 2012 that GAO was required to assess with respect to asset visibility. For example, DOD's 2014 Strategy established milestones for implementing Item Unique Identification (IUID) to better track assets. In its 2015 Strategy , DOD updated these milestones. However, it is not always clear what progress DOD has made against all of the milestones set in its 2014 Strategy . For example, the milestones associated with updating automated information systems in the 2015 Strategy do not reflect progress made to date for each of the military services. GAO has previously reported that milestones provide decision makers with the information they need to assess progress and estimate realistic completion dates. If the updates to the Strategy do not clarify what progress DOD has made in meeting its previous milestones, the utility of these milestones will be limited. Officials agreed and commented they plan to take further action in the next update to the Strategy to ensure that progress that has been made is more easily understood. Finally, DOD's 2014 Strategy contains 22 implementation plans, which outline initiatives intended to improve DOD's asset visibility. GAO reported in January 2015 that 6 of those 22 plans had been implemented but that it was not clear how the plans linked to the goals and objectives in the Strategy . Since it issued the 2014 Strategy , DOD has implemented an additional 10 of its original 22 implementation plans, and has added information to its 2015 Strategy linking each of the ongoing plans to the overarching goals and objectives in the 2015 Strategy . By creating a clear link between the goals and objectives in the Strategy and implementation plans, DOD should be better positioned to monitor progress toward the implementation of its initiatives and achievement of its overarching goals and objectives for asset visibility.
section_title: What GAO Recommends
paragraphs: GAO made recommendations to DOD in its prior work to strengthen asset visibility. DOD agreed and has taken or is planning on taking action to address them. Consequently, GAO is not making any new recommendations in this report. GAO provided a draft of this report to DOD for advance review and comment. DOD did not provide any comments to include in this report.

section_title: Letter
paragraphs: One of the most complex and vital tasks facing the Department of  Defense (DOD) is managing its supply chain to effectively and efficiently  provide spare parts, food, fuel, and other critical supplies in support of  U.S. military forces. DOD’s goal and challenge are to deliver the right  items in the right quantities to the right place at the right time and at the  right cost. Supply chain management encompasses the processes and  systems for accomplishing this goal. Because of long-standing  weaknesses in DOD’s supply chain management, we have designated it  as a high-risk area. In February 2013, we reported that limitations in  asset visibility—including the visibility of assets in transit—make it difficult  to obtain timely and accurate information on the assets that are present in  the theater of operations. DOD defines asset visibility as the ability to  provide timely and accurate information on the location, quantity,  condition, movement, and status of items in its inventory, including assets  in transit. One of the tools that DOD plans to use to improve asset  visibility is a technology called Item Unique Identification (IUID). This  technology allows DOD to assign a unique number to an individual item  and then use that unique number to manage that item in a variety of  logistics processes. In September 2015, the Office of the Under Secretary  of Defense for Acquisition, Technology and Logistics issued DOD’s  updated Instruction on IUID to establish policy and assign responsibilities  for the process of uniquely identifying assets to enable asset  accountability and life-cycle management. DOD’s January 2014 Strategy  for Improving DOD Asset Visibility states that “to achieve a seamless and  effective supply chain, DOD needs to have end-to-end visibility of its  assets from acquisition to disposal and all points between. Further,  maintaining visibility of these assets is critical to ensure that DOD meets  its stated goals and provides support to the warfighter.”
The Fiscal Year 2014 National Defense Authorization Act (NDAA)  required DOD to submit to Congress a comprehensive strategy and  implementation plans for improving asset tracking and in-transit visibility,  including 11 elements that were specified in the act. For example, the act  called for DOD to include in its strategy and plans elements such as goals  and objectives for implementing the strategy and milestones and  performance measures for gauging results. The NDAA also included a  provision that GAO assess the extent to which DOD’s strategy and  accompanying implementation plans: include the 11 statutory elements;  incorporate, as appropriate, industry best practices related to automated  information and data-capture technologies for asset tracking and in-transit  visibility; effectively execute the department’s efforts to implement Item  Unique Identification (IUID); and contain initiatives that align to DOD’s  overarching asset tracking and in-transit visibility goals and objectives  and that have been implemented. In October 2014, DOD submitted to  Congress its Report to Congress on the Strategy to Improve Asset  Tracking and In-Transit Visibility in satisfaction of its mandate. DOD’s  2014 report incorporated its 2014 Strategy for Improving DOD Asset  Visibility and accompanying implementation plans, which DOD refers to  as Supporting Execution Plans (SEP). We refer to the 2014 strategy  document, implementation plans, and 2014 report collectively as the 2014  Strategy. DOD subsequently updated its asset visibility strategy and  implementation plans in October 2015 (2015 Strategy).
To assess the extent to which DOD satisfied its mandate, we reviewed  DOD’s 2014 Strategy against each of the 11 statutory elements. We  determined that DOD’s 2014 Strategy “fully addressed” an element when  the documents described the entire element and “partially addressed” an  element when the documents described some, but not all, parts of that  element. When the documents did not explicitly reflect any part of an  element, we determined that the element was “not addressed.” As the  updated strategy was released during our assessment of the 2014  Strategy, we reviewed the 2015 Strategy to determine changes made  between 2014 and 2015. This report discusses the extent to which DOD’s  2014 Strategy and implementation plans address the items specified in  the mandate. We discussed with officials from the Office of the Deputy  Assistant Secretary of Defense for Supply Chain Integration the elements  that we determined were partially addressed in the 2014 Strategy and  reviewed the 2015 Strategy to understand any ongoing efforts to address  the elements more fully.
To determine what steps DOD has taken to incorporate industry best  practices related to automated information and data-capture technologies  and to implement Item Unique Identification (IUID), we reviewed DOD’s  2014 Strategy to identify the information DOD included about industry  best practices and IUID. We also reviewed the 2015 Strategy and  discussed with DOD officials how the department collaborates with  industry to identify and incorporate best practices. In September 2015, we  attended the annual Automatic Identification Technology (AIT) in DOD  Symposium, where DOD officials, government leaders, business  executives, and academics within the AIT industry gathered to discuss  how industry technology users implement AIT to achieve higher returns  on investment and how technology is being used to improve asset  visibility.
Finally, to determine what progress DOD has made in implementing its  2014 Strategy’s implementation plans and in aligning those plans with its  overarching goals and objectives for asset tracking and in-transit visibility,  we reviewed DOD’s 2014 Strategy’s plans and discussed with the  components the initiatives they had implemented or were implementing to  improve asset visibility. We also reviewed updates to those plans that the  components had provided to the Asset Visibility Working Group.  Additionally, to understand what plans were identified subsequent to the  issuance of the 2014 Strategy, we reviewed DOD’s 2015 Strategy and  discussed with officials the current status of all of DOD’s implementation  plans. See appendix I for a complete list of implementation plans  appearing in both the 2014 and 2015 Strategies along with their  implementation status.
We conducted this performance audit from January 2014 to December  2015 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. We provide additional  information about our scope and methodology in appendix II.
subsections: section_title: Background
paragraphs: DOD’s supply chain is a global network that provides materiel, services,  and equipment to the joint force. DOD has had weaknesses in  maintaining visibility of supplies, such as problems with inadequate radio- frequency identification information to track all cargo movements.
We added this area to the High-Risk List in 1990. Since that time, we  have reported on various aspects of DOD’s supply chain, including asset  visibility. Most recently, in our 2015 High Risk update, we reported on  progress DOD has made in addressing weaknesses in its asset visibility,  including developing its 2014 Strategy for Improving DOD Asset  Visibility.
subsections: section_title: DOD’s Implementation of IUID
paragraphs: In May 2012, we evaluated DOD’s implementation of IUID and found that  the department had taken some steps to improve its approach to  implementing IUID technology but had not employed best management  practices, such as goals and interim milestones, for gauging its progress  in implementing IUID. Further, we found that DOD’s ability to track and  share IUID data across components was hampered because the data  were not fully integrated into the components’ enterprise information  systems. DOD had not developed complete, integrated master schedules  for integrating IUID DOD-wide and within the components’ systems. In  2012, we recommended several actions, including that DOD (1) develop  quantifiable goals and milestones for marking its legacy items that would  allow it to track progress toward those goals and (2) develop or revise  master schedules for integrating IUID technology into the components’  Enterprise Resource Planning Systems. DOD concurred with these  recommendations and stated that its IUID working group would establish  interim milestones to track the progress of marking its legacy assets.  Actions DOD has taken to address this recommendation in its 2014 and  2015 strategies are discussed later in this report.
section_title: DOD’s Draft Strategy for In-Transit Visibility
paragraphs: In February 2013, we reviewed DOD’s draft strategy for in-transit visibility  and found that it included some, but not all of the elements GAO had  previously identified as necessary for a comprehensive strategic plan,  including a mission statement; a problem definition, scope, and  methodology; goals and objectives; activities, milestones, and  performance measures; resources and investments; information about  organizational roles, responsibilities, and coordination; and a description  of key external factors that could affect the achievement of goals. At that  time, we found that the 2013 draft strategy fully included one of the seven  elements of a comprehensive strategic plan, partially included four  elements, and did not include two elements. For example, we found it  included overarching goals and objectives, but it did not include  information on DOD’s planned resources and investments to achieve  those goals or key external factors that could affect the achievement of  the goals. We recommended that DOD finalize its 2013 draft strategy and  ensure that it contained all the key elements of a comprehensive strategic  plan, including the elements that were not included in the draft strategy.  DOD concurred with our recommendation and developed its 2014  Strategy for Improving DOD Asset Visibility. We discuss the extent to  which DOD included many of these elements later in this report.
section_title: DOD’s First Strategy for Improving DOD Asset Visibility
paragraphs: In January 2014, DOD issued its Strategy for Improving DOD Asset  Visibility. The 2014 Strategy included 22 implementation plans  developed by the components that outlined initiatives intended to improve  asset visibility. We reviewed DOD’s 2014 Strategy and reported in  January 2015 that it included five of the seven elements of a  comprehensive strategic plan but only partially included the other two  elements. For example, 4 of the 22 implementation plans did not include  resources, investments, and key external factors. As part of our January  2015 report, we recommended that DOD take four actions to improve its  management of asset visibility including that DOD include information in  subsequent updates to the Strategy and accompanying SEPs about  which elements were used in developing cost estimates for resources and  investments. DOD again concurred with our recommendations and stated  in written comments included in the January 2015 report that it planned to  address all four of our recommendations in its forthcoming 2015 Strategy.  We discuss the status of these recommendations later in this report.
section_title: GAO’s High-Risk List
paragraphs: In February 2015, GAO issued its 2015 High-Risk Series Update, which  included DOD’s Supply Chain Management. For DOD asset visibility,  we reported that DOD had demonstrated leadership commitment and had  made considerable progress in addressing the remaining four criteria for  removal from the High-Risk List (capacity, corrective-action plan,  monitoring, and demonstrated progress) through actions like developing  its 2014 Strategy. We reported that DOD needed to take a number of  actions to address the remaining four high-risk criteria that it had partially  met. Specifically, DOD needed to include information in updates to the  2014 Strategy on the factors it had used in developing cost estimates for  resources and investments. We also advised that DOD needed to clearly  specify the linkage between the goals and objectives in the 2014 Strategy  and the plans intended to implement it. We reported that DOD should  assess, and refine as appropriate, existing performance measures to  ensure that these measures assess implementation of individual plans as  well as progress toward achieving the overarching goals and objectives  outlined in the 2014 Strategy. Lastly, we reported that DOD needed to  continue implementing the plans identified in the 2014 Strategy, refining  them over time as appropriate, and demonstrating that implementation of  these plans results in measurable outcomes and progress toward  realizing the goals and objectives in the 2014 Strategy. DOD concurred,  and the status is discussed later in this report.
section_title: DOD’s Update to the 2014 Strategy
paragraphs: In October 2015, DOD issued its update to the 2014 Strategy. Like its  predecessor, DOD’s 2015 Strategy states that it is intended to create a  framework whereby the DOD components can work collaboratively to  enhance asset visibility in a manner that provides accurate, reliable, and  timely data to track assets throughout their life cycle.
section_title: DOD’s 2014 Strategy Fully Addresses Several of the Statutory Elements, and DOD’s 2015 Strategy and Implementation Plans Fully Address Most of the Remaining Elements
paragraphs: DOD’s 2014 Strategy and accompanying implementation plans fully  address six and partially address five of the statutory elements set forth in  the Fiscal Year 2014 National Defense Authorization Act; and DOD’s  2015 Strategy and accompanying implementation plans address  additional information for most of the statutory elements, including fully  addressing four of the five elements that were partially addressed in the  2014 Strategy. DOD’s 2014 Strategy and implementation plans contain  limited information on its collaboration efforts with industry to identify and  incorporate best practices, but its 2015 Strategy provides more  information on its efforts to collaborate with industry, including examples  where that collaboration has resulted in initiatives intended to improve  asset visibility. Additionally, DOD continues to make progress in  addressing weaknesses in its implementation of IUID by establishing in its  2014 Strategy milestones for its implementation of IUID. Finally, in its  2014 Strategy, DOD identified 22 implementation plans but did not link its  plans with the Strategy’s overarching goals and objectives. DOD has  implemented 16 of its original 22 implementation plans and has identified  in its 2015 Strategy new plans that link to the overarching goals and  objectives in the 2015 Strategy.
subsections: section_title: DOD’s 2014 Strategy and Accompanying Implementation Plans Fully Address Six and Partially Address Five of the Statutory Elements, and its 2015 Strategy Fully Addresses Four of the Five Elements Previously Reported as Partially Addressed in the 2014 Strategy
paragraphs: We reviewed DOD’s 2014 Strategy and determined that the documents  fully addressed 6 of the 11 statutory elements and partially addressed the  remaining 5 (see table 1). Specifically, DOD’s 2014 Strategy fully  addressed the following 6 elements: (1) overarching goals and objectives  desired from implementation of the strategy; (2) a description of steps to  achieve these goals and objectives, as well as milestones and  performance measures to gauge results; (3) a description of the roles and  responsibilities for managing and overseeing and implementing the  Strategy; (4) a detailed description of asset marking requirements and  how automated information and data-capture technologies could improve  readiness, cost effectiveness, and performance; (5) a defined list of all  categories of items that program managers are required to identify for the  purposes of asset marking; and (6) a description of steps to improve  asset tracking and in-transit visibility for classified programs. For example,  we determined that DOD’s 2014 Strategy and accompanying  implementation plans fully addressed roles and responsibilities for  managing and overseeing the Strategy because they discuss the  management structure established to oversee the execution and track  progress. The 2014 Strategy also assigns roles and responsibilities and  discusses several forums or working groups, such as the Asset Visibility  Working Group, that provide a forum for discussion and input on  improvements to asset visibility.
However, not all of the statutory elements were fully addressed.  Specifically, the following 5 elements were partially addressed in the 2014  Strategy: (1) an estimate of the costs associated with executing the plan,  and the sources and types of resources and investments required to meet  the goals and objectives; (2) a description of key factors external to DOD  and beyond its control that could significantly affect achievement of the  long-term goals contained in the strategy; (3) steps to be undertaken to  facilitate collaboration with industry designed to capture best practices,  lessons learned, and any relevant technical matters; (4) a description of  how improved asset tracking and in-transit visibility could enhance audit  readiness, reduce counterfeit risk, enhance logistical processes, and  otherwise benefit DOD; and (5) an operational security assessment  designed to ensure that all DOD assets are appropriately protected during  the execution of the strategy and implementation plan. For example, we  determined that an operational security assessment was partially  addressed, because while the 2014 Strategy provided examples of  safeguards that are either in place or planned to ensure the security of  DOD assets, it is not clear whether an operational security assessment  had been conducted and, if it has, what the results of that assessment  were.
Table 1 includes our assessment of the extent to which DOD’s 2014  Strategy addressed the 11 statutory elements. Additionally, since DOD  issued its 2015 Strategy during our review, we assessed the 2015  Strategy for changes to the strategy from 2014 through 2015.
In addition to assessing DOD’s 2014 Strategy and accompanying  implementation plans to determine the extent to which DOD satisfied its  mandate, we also reviewed DOD’s 2015 Strategy, which was issued in  October 2015, to determine changes that had been made between 2014  and 2015. We found that four of the five elements that were partially  addressed in the 2014 Strategy are fully addressed in the 2015 Strategy.  Specifically, in its 2015 Strategy, DOD fully addresses a description of key factors external to DOD and beyond its control  that could significantly affect achievement of the long-term goals  contained in the strategy; steps to be undertaken to facilitate collaboration with industry  designed to capture best practices, lessons learned, and any relevant  technical matters; a description of how improved asset tracking and in-transit visibility  could enhance audit readiness, reduce counterfeit risk, enhance  logistical processes, and otherwise benefit DOD; and an operational security assessment designed to ensure that DOD  assets are appropriately protected during the execution of the strategy  and implementation plan.
For example, DOD has added detailed discussion to its 2015 Strategy  regarding the steps it is taking to collaborate with industry to capture best  practices, lessons learned, and any relevant technical matters, including  examples of where that collaboration led it to incorporate commercial  automated information and data-capture technologies. The 2015 Strategy  discusses DOD’s migration of active Radio Frequency Identification  (RFID) from a proprietary communication standard protocol to an  international standard to increase competition and lower costs and its  partnership with a satellite tag provider to improve cargo tracking and the  security of containerized cargo, to enable advanced cargo tracking.  Additionally, DOD’s 2015 Strategy explains how IUID information will,  among other things, support “logistics support decisions,” reduce the  introduction of counterfeit parts into the supply chain, and support the  achievement of clean audit opinions on DOD’s financial statements.  Further, the 2015 Strategy contains criteria to assist DOD in determining  the operational risk associated with the loss (damage, pilferage, etc.) of  parts and equipment, to include determining which DOD assets require a  higher level of security and management using IUID marking.
One statutory element—an estimate of the costs associated with  executing the plan, and the sources and types of resources and  investments, including skills, technology, human capital, information and  other resources, required to meet goals and objectives—remains partially  addressed in DOD’s 2015 Strategy. The 2015 Strategy calls for the  components to consider items such as manpower, materiel, and  sustainment costs when documenting cost estimates for the  implementation plans. However, our review of the 2015 Strategy showed  that three of the implementation plans do not include cost estimates. We  recommended in our January 2015 report that DOD include information  about which elements were used in developing cost estimates in  subsequent updates to the strategy and accompanying implementation  plans. Further, we reported in our February 2015 High Risk report that  these cost estimates are important to ensure that DOD has the  information it needs to make well-informed decisions about asset visibility,  including setting budget priorities. Officials from the Office of the Deputy  Assistant Secretary of Defense for Supply Chain Integration told us that  the components did not include the cost estimates for the three  implementation plans, pointing out that the funding for these plans is  embedded within the overall program funding and it is impossible for the  components to estimate the portion of total program funding associated  with the plans. For example, two of the three plans that did not contain  cost estimates are intended to enhance the capability of the Global  Combat Support System–Joint (GCSS-J) to provide asset visibility and  are funded by overall program funding for the GCSS-J rather than funding  for the individual asset visibility implementation plans. Component  officials argue that it is therefore impossible to isolate the costs  associated with these implementation plans. We understand that the  components may fund these initiatives from total program funding; and  therefore, may not estimate the costs associated with the plan. However,  without any idea of the cost associated with these plans, the components  may be unable to determine the return on investment associated with  them. We continue to believe DOD should follow its direction provided in  the 2015 Strategy and require the components to estimate the costs  associated with its implementation plans intended to improve asset  visibility, as we have previously recommended. In October 2015, officials  stated that DOD plans to provide direction in the next annual update to  the Strategy on how to explain and document these cases, although they  commented that there will be cases where the components may not be  able to isolate the costs associated with an implementation plan.
section_title: DOD Provided Limited Information in the 2014 Strategy on Its Collaboration with Industry but Addressed the Issue More Fully in Its 2015 Strategy
paragraphs: As previously mentioned, DOD’s 2014 Strategy contained limited  information on DOD’s efforts to collaborate with industry to identify and  incorporate best practices. The 2014 Strategy includes phrases like  “capitalization on better business processes,” but provides little  explanation of how DOD is incorporating or has incorporated business  best practices and lessons learned into its plans for improving asset  visibility. DOD’s 2014 Strategy states that this element will be discussed  in DOD’s 2015 Strategy. The 2014 Strategy further comments that DOD  has numerous processes to keep abreast of and to evaluate or  incorporate emerging technologies that show promise for enhancing DOD  business processes, including participation or membership in the various  AIT standards bodies, review of trade journals, and participation in trade  forums. The 2014 Strategy references symposiums, such as DOD’s AIT  in DOD Summit, where AIT industry leaders and international and DOD  standards representatives meet to review AIT lessons learned, among  other things.
Our review of DOD’s 2015 Strategy and implementation plans found that  DOD has added information on its collaboration with industry to  incorporate best practices, and has provided examples of where this  collaboration has resulted in improvements to asset visibility. For  example, DOD discusses the processes it utilizes for identifying and  evaluating emerging technologies, such as participating in the AIT  standards bodies and trade forums and DOD’s Research, Development,  Test, and Evaluation (RDT&E) program. Additionally, as discussed in  DOD’s 2015 Strategy, DOD worked with commercial partners to  incorporate passive RFID to improve the accuracy of its inventory and  decrease processing time for new recruits at Lackland Air Force Base.  In some cases, the 2015 Strategy discusses results achieved from this  collaboration in terms of the performance metrics for the initiatives. For  example, DOD reported testing the application of passive RFID at  Lackland Air Force Base, which it found improved its inventory accuracy  and reduced the time for processing recruits by over 50 percent. DOD  also reported working with a commercial provider to improve cargo  tracking and the security of containerized cargo.  Specifically, DOD  reports that by using an industry-proven process where the logistics  provider—industry—owns the tracking system; DOD is able to track cargo  in a more affordable way. Key practices for effective collaboration call for  agencies to, among other things, develop mechanisms to monitor,  evaluate, and report on results of their collaborative efforts. Officials  from the Office of the Deputy Assistant Secretary of Defense for Supply  Chain Integration agreed that they should continue to discuss more in  future updates to the Strategy improvements achieved for the initiatives  resulting from collaboration with industry and stated that they are  continuing to work with the components to assess the results stemming  from the initiatives that have been implemented.
section_title: DOD Has Established Milestones for IUID Implementation in Its 2014 Strategy, and Has Updated Its IUID Instruction, but Implementation Challenges Remain
paragraphs: DOD’s 2014 Strategy demonstrates progress in establishing milestones  for implementing IUID, and DOD recently updated its instruction for IUID  marking. In its 2014 Strategy, DOD provides an integrated master  schedule for IUID implementation with interim milestones for fiscal years  2013 through 2017. Specifically, DOD provides an integrated master  schedule showing, at the department level, issues such as marking  legacy items, training, and system updates and hardware that need to be  addressed to implement IUID—and the interim milestones associated  with each of these issues. In addition, DOD provides a schedule for an  IUID automated information system update and an IUID item marking  schedule by component. These schedules provide interim milestones for  each of the components that are intended to illustrate planned timelines  for integrating IUID information into enterprise planning systems and for  marking IUID items.
As we found in 2012, DOD faces challenges with the integration of IUID  data into the components’ enterprise information systems. This problem  is not unique to IUID, as evidenced by our March 2014 report on  ammunition where we found the automated information systems used by  the military services to manage and maintain accountability for DOD’s  ammunition inventory have limitations that affect their ability to facilitate  efficient management of conventional ammunition, including that the  systems cannot directly exchange ammunition data with each other.  Specifically, we found that several of the systems involved in DOD’s  overarching Enterprise Resource Planning (ERP) system were not being  implemented on schedule and on budget. DOD officials have said that  successful implementation of ERP, which has not yet occurred, is key to  resolving the long-standing weaknesses in the department’s business  operations in areas such as supply chain management and improving the  department’s capability to provide DOD management and Congress with  accurate and reliable information on the results of its operations.  Specifically, DOD’s goal is for the components to share IUID data across  many of their individual IT systems, and DOD-wide, between  components. In order to accomplish enterprise-wide data sharing of this  data, DOD officials stated that the components intended to use certain IT  systems referred to as ERP systems. Absent successful integration of  ERP, DOD is getting limited use from its IUID information, as only a few  systems are able to recognize and use IUID data.
On September 3, 2015, DOD issued an update to its Instruction 8320.04,  Item Unique Identification Standards for Tangible Personal Property. We  reviewed the updated DOD Instruction 8320.04, which includes a decision  tree that is intended to assist DOD components in determining which  items should be IUID marked based on criteria such as whether the item  is susceptible to counterfeiting. DOD has reported that the use of IUID  could improve the accountability and maintenance of its components’  property and equipment. For example, by sharing unique item  identification data across the components’ IT systems, DOD could follow  equipment as it moves between components. In addition, a component  could use these data in its IT systems to more quickly identify items that  require higher amounts of maintenance. DOD’s 2015 Strategy includes  updated milestones for IUID marking and schedules for updating  automated information systems by component for fiscal years 2015  through 2019 (the 2014 Strategy includes schedules for fiscal years 2013  through 2017). However, it is not always clear what progress DOD has  made against the original milestones set in its 2014 Strategy. Specifically,  while DOD’s milestones for IUID marking in the 2015 Strategy include  goals for percentages of items marked for all of the components, it is not  clear what percentage of items have been marked to-date for each of the  services. For example, while the Navy shows goals for the percentage of  items it would like to have IUID marked by fiscal year 2018 and beyond, it  does not show what percentage of items have been marked against that  goal. Similarly, the milestones for updating automated information  systems do not show progress made to-date. DOD officials agreed that it  is not clear what progress has been made in meeting the milestones for  fiscal years 2013 and 2014 for updating the military services’ automated  information systems and have added legends to the milestone charts and  language in the Strategy to clarify the progress that has been made.  However, in comparing the milestones in the 2014 Strategy and those in  the 2015 Strategy, we are still unable to determine which of DOD’s  milestones for IUID marking and updating automated information systems  have been achieved.
We have previously concluded that milestones provide decision makers  with the information they need to assess progress and estimate realistic  completion dates. In May 2012, we recommended that DOD establish  quantifiable interim milestones for IUID marking of legacy items, which  would allow DOD to track progress toward its goals for IUID marking.  We also recommended that DOD develop or revise integrated master  schedules for the integration of IUID technology within the components  ERP systems. While DOD’s establishment of milestones for its IUID  implementation efforts is a positive step, the utility of those milestones will  be limited if it is unclear with each update of the Strategy what progress  DOD has made in achieving its previous milestones and how that is  affecting timelines in its 2015 Strategy. We discussed the milestones with  officials to determine whether further updates were planned to make it  more apparent what progress had been made against its 2014 milestones  for IUID marking and automated information system updates, and officials  agreed it was not altogether clear what progress had been made against  the IUID milestones, particularly those associated with updating  automated information systems. In an attempt to add clarity, DOD revised  its IUID milestones for automated information system updates in the 2015  Strategy to reflect progress made by the Army and Marine Corps in  updating their systems to read and share IUID data. The officials stated  they are committed to further revising the milestones to provide insight on  the progress that has been made in meeting interim milestones for  integrating IUID data into DOD’s automated systems. DOD officials  commented in October 2015 that they will continue to capture IUID  progress and plan to update the format for the automated information  systems milestones to ensure that progress that has been made is more  easily understood.
section_title: DOD Continues to Implement Many of the Initiatives Identified in Its 2014 Strategy, and Has Identified New Initiatives in Its 2015 Strategy While Linking Them to Its Overarching Goals and Objectives
paragraphs: Since issuing its 2014 Strategy, DOD has implemented 16 of its original  22 implementation plans included in its 2014 Strategy. However, DOD did  not link its implementation plans with the 2014 Strategy’s overarching  goals and objectives. DOD added eight new implementation plans to its  2015 Strategy and linked each of these plans to the 2015 Strategy’s  overarching goals and objectives. Aligning agency-wide goals and  objectives with strategies to achieve those goals and objectives is a key  practice that could increase the effectiveness of DOD’s efforts to improve  asset visibility. Further, leading practices to promote successful data- driven performance reviews include ensuring alignment between agency  goals, program activities, and resources.
DOD identified, in its 2014 Strategy, 22 implementation plans, which  outline initiatives intended to improve asset visibility. The 2014 Strategy  states that implementation plans detailing new initiatives identified by the  components will be included in future versions of the Strategy. The  Strategy also contains overarching goals and objectives for improving  asset visibility. In January 2015, we found that 6 of the 22 implementation  plans included in DOD’s 2014 Strategy had been implemented. For  example, in 2014, U.S. Transportation Command (TRANSCOM)  implemented a plan intended to create an integrated system for asset  visibility information that is included in transportation and supply data  systems and is now being used to enhance asset visibility. According to  DOD, this new integrated system provides users with a single portal for  viewing integrated supply and transportation data, making it possible to  support virtually any business process with improved asset visibility.
We reported in January 2015 that the 2014 Strategy calls for components  to identify at least one metric for assessing the implementation of each of  its plans that are intended to improve asset visibility. However, the 2014  Strategy did not require that metrics developed for the plans link back to  the goals or objectives in the 2014 Strategy, and we found that it was not  clear whether the metrics link to the goals and objectives. Without  creating a clear link between the goals and objectives in the 2014  Strategy and the plans intended to implement the 2014 Strategy, it will be  difficult for DOD to assess progress toward realizing its goals and  objectives. Therefore, we recommended that DOD ensure that the linkage  between the performance measures for the individual plans and the goals  and objectives outlined in the 2014 Strategy is clear. DOD concurred with  our recommendation.
Subsequent to issuance of its 2014 Strategy, DOD implemented an  additional 10 of the 22 original plans. For example, the U.S. Marine  Corps’ Blount Island Command has implemented long-range passive  RFID for visibility and accountability of items, resulting in improvements  including an increased range for “reading” an item—from up to 30 feet to  up to 240 feet—and reduced inventory cycle times from 12 days to 10  hours. Additionally, the Joint Staff has implemented its plan to develop in- transit visibility capabilities within the Global Combat Support System- Joint (GCSS-J), a web-based logistics program that was developed to  provide logisticians with visibility and decision support tools to effectively  plan and execute joint logistics support for current and future operations.
According to DOD, GCSS-J has dramatically improved functionality over  the last several program releases to access and visualize logistics  information. Also, after the release of the most recent software version,  users graded GCSS-J as having exceeded their expectations with a 96  percent customer satisfaction rating.
While the 2014 Strategy introduced 22 implementation plans intended to  improve asset visibility, the 2015 Strategy introduced additional plans.  Specifically, DOD has added eight new implementation plans to its 2015  Strategy. For example, the U.S. Air Force’s Global Enterprise Tracking  initiative uses real-time location system technology to track aircraft and  critical assets and is expected to reduce the time required for these  assets to get through depots. Additionally, the Non-Nodal In-Transit  Visibility plan is expected to improve combat effectiveness by providing  near real-time visibility of sustainment cargo and confirmation of delivery  of the cargo to tactical units. An overview of the initiatives included in  DOD’s 2014 and 2015 Strategies and implementation plans is included at  appendix I of this report.
The 2015 Strategy also includes matrices that link each of DOD’s ongoing  implementation plans to the Strategy’s overarching goals and  objectives. Additionally, measures of performance and effectiveness have  been identified for each plan. For example, the measure of performance  for the Navy’s passive RFID plan for the Littoral Combat Ship is to  conduct a technical assessment and one of its measures of effectiveness  is to reduce inventory workload by 50 percent. By creating a clear link  between the goals and objectives in the Strategy and the implementation  plans intended to implement the Strategy, as well as identifying measures  of performance and effectiveness, DOD should be better positioned to  monitor progress toward the implementation of its plans and achievement  of its overarching goals and objectives for asset visibility.
section_title: Agency Comments
paragraphs: We are not making recommendations in this report. We provided a draft  of this report to DOD for advance review and comment. DOD did not  provide any comments to include in this report.
We are sending copies of this report to the appropriate congressional  committees and the Secretary of Defense. In addition, the report is  available at no charge on the GAO website at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at (202) 512-5257 or merrittz@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this report. Key contributors to this report are listed in appendix  III.
section_title: Appendix I: DOD’s Implementation Plans to Improve Asset Visibility
paragraphs: This appendix provides an overview of DOD’s implementation plans  intended to improve asset visibility and progress in implementing those  plans. These implementation plans are described in detail in both DOD’s  2014 and 2015 Strategies for Improving DOD Asset Visibility.
The implementation plans in table 2 below were included in DOD’s 2014  Strategy for Improving DOD Asset Visibility and have been implemented,  according to DOD.
The implementation plans in table 3 below were included in DOD’s 2014  Strategy for Improving DOD Asset Visibility but were halted for the  reasons stated.
As of July 2015, the implementation plans in table 4 below were in the  process of being implemented and were included in both DOD’s 2014 and  its 2015 Strategies for Improving DOD Asset Visibility.
The implementation plans in table 5 below were included for the first time  in DOD’s 2015 Strategy for Improving DOD Asset Visibility.
section_title: Appendix II: Scope and Methodology
paragraphs: To assess the extent to which the Department of Defense (DOD) satisfied  its mandate to provide Congress a comprehensive strategy for improving  asset tracking and in-transit visibility that includes each of the 11 statutory  elements, we reviewed DOD’s October 2014 Report to Congress on the  Strategy to Improve Asset Tracking and In-Transit Visibility, which  incorporated its January 2014 Strategy for Improving DOD Asset Visibility  and accompanying implementation plans. We refer to the 2014 strategy  document, implementation plans, and 2014 report collectively as the 2014  Strategy. We performed a content analysis in which two analysts  independently reviewed DOD’s 2014 Strategy and compared the  information in these documents with the 11 statutory elements and  assessed the extent to which DOD had addressed each required  element. Any initial disagreements in the coding were discussed and  reconciled by the analysts. The analysts then tallied the responses to  determine the extent to which the reporting elements were addressed.  We determined that DOD’s 2014 Strategy “fully addressed” an element  when the documents described the entire element and “partially  addressed” an element when the documents described some, but not all,  parts of that element. When the documents did not explicitly reflect any  part of an element, we determined that the element was “not addressed.”  We discussed with officials from the Office of the Deputy Assistant  Secretary of Defense for Supply Chain Integration any elements that we  determined were partially addressed, to understand any efforts under way  to address the elements more fully. We also discussed with officials from  the Joint Staff, Defense Logistics Agency (DLA), U.S. Transportation  Command (TRANSCOM), and each of the military services their roles in  the development of DOD’s 2014 Strategy. DOD subsequently updated  its asset visibility strategy and implementation plans in October 2015  (2015 Strategy). To understand enhancements made to the 2014  Strategy, including any efforts to more fully address those elements that  were partially addressed, we reviewed DOD’s 2015 Strategy and  discussed with officials future plans for addressing those items not fully  addressed in the 2015 Strategy.
To determine what steps DOD has taken to incorporate industry best  practices related to automated information and data-capture technologies  and to implement Item Unique Identification (IUID), we reviewed DOD’s  2014 Strategy to identify the information DOD included about industry  best practices and IUID. We did not identify industry best practices that  exist relating to automated information and data-capture technologies, but  rather assessed whether or not DOD’s 2014 Strategy discussed the  department’s efforts to collaborate with industry and any examples of  where this collaboration has resulted in industry involvement in the  department’s plans to improve asset visibility. We also discussed with  DOD officials how the department collaborates with industry to identify  best practices and any work DOD has under way to enhance the  discussion in the 2015 Strategy of its efforts to collaborate with industry.  Further, in September 2015, we attended the annual Automatic  Identification Technology (AIT) in DOD Symposium, where DOD officials,  government leaders, business executives, and academics within the AIT  industry gathered to discuss how industry technology users implement  AIT to achieve higher returns on investment and how technology is  working to improve asset visibility. Additionally, we discussed with officials  efforts under way to update the 2014 Strategy and Instruction 8320.04 to  address weaknesses we had previously identified and reviewed the  September 2015 DOD Instruction 8320.04, Item Unique Identification  (IUID) Standards for Tangible Personal Property, to determine what  updates had been made. To understand enhancements being made to  the 2014 Strategy, including those related to the discussion of  collaboration with industry and any results of that collaboration, we  reviewed DOD’s 2015 Strategy and discussed with officials  implementation plans resulting from this collaboration and ongoing work  to assess the effect of the collaboration on DOD’s plans. Further, we also  reviewed documentation resulting from agency efforts to address  recommendations in our 2015 high-risk asset visibility report.
To determine what progress DOD has made in implementing its 2014  Strategy’s implementation plans and in aligning the initiatives outlined in  those plans with its overarching goals and objectives for asset tracking  and in-transit visibility, we reviewed DOD’s 2014 Strategy’s  implementation plans and discussed with the components the plans they  had implemented or were implementing to improve asset visibility. We  also reviewed updates to those implementation plans that the  components had provided to the Asset Visibility Working Group.  Additionally, to understand what plans were identified subsequent to the  issuance of the 2014 Strategy, we reviewed DOD’s 2015 Strategy and  discussed with officials the current status of all of DOD’s implementation  plans. See appendix I for a complete list of implementation plans  appearing in both the 2014 and 2015 Strategies along with their  implementation status.
We conducted this performance audit from January 2014 to December  2015 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.
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Carleen C. Bennett, Assistant  Director; Elizabeth Curda; Nicole Harris; Joanne Landesman; Amie  Lesser; Felicia Lopez; Greg Pugnetti; Mike Silver; Sabrina Streagle;  Susan Tindall; and Jose Watkins made key contributions to this report.
section_title: Related GAO Products
paragraphs: High-Risk Series: An Update. GAO-15-290. Washington, D.C.: February  11, 2015.
Defense Logistics: DOD Has a Strategy and Has Taken Steps to Improve  its Asset Visibility, But Further Actions are Needed. GAO-15-148.  Washington, D.C.: January, 27, 2015.
Defense Logistics: A Completed Comprehensive Strategy is Needed to  Guide DOD’s In-Transit Visibility Efforts. GAO-13-201. Washington, D.C.:  February 28, 2013.
High-Risk Series: An Update: GAO-13-283. Washington, D.C.: February  14, 2013.
Defense Logistics: Improvements Needed to Enhance DOD’s  Management Approach and Implementation of Item Unique Identification  Technology. GAO-12-482. Washington, D.C.: May 3, 2012.
Defense Logistics: DOD Needs to Take Additional Actions to Address  Challenges in Supply Chain Management. GAO-11-569. Washington,  D.C.: July 28, 2011.
DOD’s High-Risk Areas: Observations on DOD’s Progress and  Challenges in Strategic Planning for Supply Chain Management.  GAO-10-929T. Washington, D.C.: July 27, 2010.
Defense Logistics: Lack of Key Information May Impede DOD’s Ability to  Improve Supply Chain Management. GAO-09-150. Washington, D.C.:  January 12, 2009.
High-Risk Series: An Update. GAO-09-271. Washington, D.C.: January  2009.