DOD has established criteria for the types of items that are required to be marked with IUID labels. For principal end items and contractor-marked secondary items, the criteria are as follows: 1. all items for which the government’s unit acquisition cost is $5,000 or more; 2. items for which the government’s unit acquisition cost is less than $5,000, when identified by the requiring activity as DOD serially managed, mission-essential or controlled-inventory; 3. when the government’s unit acquisition cost is less than $5,000 and the requiring activity determines that permanent identification is required; and 4. regardless of value, (a) any DOD serially managed subassembly, component, or part embedded within an item and (b) the parent item that contains the embedded subassembly, component, or part. For secondary items in use or in inventory, the criteria are as follows: 1. all DOD serially managed items including, but not limited to: sensitive, critical safety, or pilferable items that have a unique item-level traceability requirement at any point in their life cycle; and all depot-level reparable items; and 2. any other item that the requiring activity decides requires unique item- level traceability at any point in their life cycle. In order to use IUID technology, four processes must be completed. First, each item that qualifies for IUID marking—according to DOD’s criteria—is labeled. IUID labels often contain some human-readable information, printed as text on the label. The amount and type of human-readable information varies, but it often contains key details about the item, such as its National Stock Number, part number, or serial number. These are categories that DOD components use to identify items in their inventories. In certain cases, items do not have labels attached to them, and instead are labeled through a process known as direct part marking, in which the human- and machine-readable information are applied directly to the item. In addition, each individual label contains information about the item, encoded in a machine-readable, two-dimensional image printed on the label. Known as a data matrix, this image contains various pieces of information encoded in a two-dimensional bar code. Figure 1 shows a data plate with an IUID data matrix in the lower right-hand corner. When combined, the pieces of information encoded in the data matrix make up a globally unique string of numbers referred to as the item’s UII number. To ensure that all items marked with IUID labels are globally unique, DOD requires that UII numbers be formatted according to international standards for syntax format. Further, UII numbers must be entered into DOD’s IUID Registry. The registry is a database intended to ensure that each UII number is unique. An item’s UII number may be entered into the registry in one of two ways: the item is marked with an IUID label and the UII number associated with that label is registered, or DOD or contractors can establish a “virtual” UII number. According to DOD guidance, these virtual UII numbers are assigned to an item that has not yet been marked with an IUID label. The guidance states that a virtual UII number may be used due to economic or logistical considerations. For example, a DOD component may virtually mark one item that is embedded in another item, so that DOD does not have to remove the embedded item solely to mark the embedded item. For legacy items already in a component’s inventory, marking and registration are the responsibility of the component. For items that are not yet in DOD’s inventory and are being delivered to a component—or for property furnished by the government to a contractor—it is the responsibility of the contractor to mark or register items. If the UII number in a data matrix is improperly formatted, it cannot be used to properly identify the item, and the data matrix must be replaced. Second, personnel must electronically read the label’s data matrix, the two-dimensional bar code in which the item’s UII number is encoded. There are several types of tools than can be used for this process, including hand-held scanners and web-based software that can read an image of a data matrix. Because data matrices cannot be read visually, electronically reading the matrices is the only way to access the UII data they contain. Figure 2 shows an electronic scanner being used to read a data plate with an IUID data matrix. Third, UII data from a data matrix is passed to an IT system. According to DOD officials, there are a variety of IT systems that have a requirement to use UII data, and some of these systems currently have the capability to store UII data. Examples include the Army’s Property Book Unit Supply Enhanced, the Navy’s Configuration Data Managers Database–Open Architecture, the Marine Corps’ Joint Asset Maintenance Integrated Support System, and the Air Force’s Automated Inventory Management Tool. DOD officials have explained that some of these systems operate in “pockets” within the components, and do not share UII data across the components or DOD-wide. For instance, the Air Force’s Automated Inventory Management Tool contains UII data that is specific to an Air Force installation, and does not have the capability to share these data with other installations. DOD’s goal is for the components to share UII data across each of their individual IT systems, and DOD-wide, between components. Within DOD, this type of data sharing is characterized as “enterprisewide.” In order to accomplish enterprisewide data sharing of UII data, the components intend to use certain IT systems referred to as Enterprise Resource Planning systems. These automated systems consist of multiple, integrated functional modules that perform a variety of business-related tasks, such as general-ledger accounting, payroll, and supply chain management. DOD officials have explained that certain Enterprise Resource Planning systems will provide the capability to share UII data enterprisewide, and in this report we are focusing on DOD efforts to integrate IUID with these systems.IT system, such as an Enterprise Resource Planning system, DOD intends to store UII data and share these data within and across DOD organizations. In addition, IT systems can use software to analyze these Once UII data is uploaded into an data to improve logistics processes, such as property accountability and maintenance, in DOD’s supply chain. Fourth, to achieve IUID technology’s potential benefits in many logistics processes, DOD personnel will have to periodically repeat the previous steps, including scanning the matrix on an item’s label; uploading the UII data into an IT system; and then storing, sharing, and analyzing the data as required by the specific logistics process. For example, in a property- accountability process that we observed, each time a weapon was checked in or out of an armory, personnel scanned the label’s data matrix; the matrix’s UII number was uploaded into an electronic property book; and software then matched the weapon’s UII number with data that identified the weapon’s owner. For many of the logistics processes in which IUID could be used, these steps would be repeated throughout an item’s life cycle. It is DOD’s goal for its components to share UII data departmentwide, and the components are to use these data for unique item tracking. The Office of the Deputy Under Secretary of Defense for Logistics and Materiel Readiness—under the Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics—is the focal point for implementing IUID capabilities for DOD’s supply chain materiel. As of July 2011,DOD-wide IUID implementation to the Office of the Deputy Assistant Secretary of Defense for Supply Chain Integration (ODASD). According to component officials, each component has multiple organizations carrying out IUID implementation tasks, such as creating policy and defining requirements; planning and budgeting for implementation of policy; and executing requirements. In addition, according to component officials, each component has an office that that office delegated the responsibility for programmatic lead of maintains the lead in IUID implementation policy. These respective offices are: Army—the Office of Life Cycle Logistics Policy, in the Office of the Assistant Secretary of the Army for Acquisition, Logistics and Technology; Navy—the Office of the Assistant Secretary of the Navy for Research, Development, and Acquisition; Marine Corps—the Office of the Director, Logistics Plans, Policies, and Strategic Mobility, in the office of the Deputy Commandant of the Marine Corps for Installations and Logistics; Air Force—the Directorate of Transformation, Deputy Chief of Staff for Logistics, Installations and Mission Support; and Defense Logistics Agency—the Office of Logistics Management Standards. Also, to facilitate intercomponent communication and collaboration, the components have established a number of working groups and other bodies to facilitate coordination on IUID implementation. The Joint Logistics Board determined that there were ambiguities concerning DOD’s IUID policy, requirements, and proposed value across DOD, as well as wide variation in the components’ implementation strategies, execution, and funding of IUID implementation. As a result, in 2009 the board chartered the task force, led by the Assistant Deputy Under Secretary of Defense for Maintenance Policy and Programs, and including representatives from the components and the Office of the Secretary of Defense. The task force had several goals, to include assessing the value of IUID within DOD’s supply chain, and recommending changes to policy and guidance to adequately align IUID implementation with the task force’s evaluation of IUID’s value. The task force issued a report with recommendations in June 2010 that estimated financial costs of IUID implementation, as well as financial and nonfinancial benefits.