The Department of Defence (DoD) will radically upgrade its worldwide logistics operations by undertaking a $20 million pilot project that will see RFID technology rolled out in more than two dozen locations around the globe.

Under the scope of the project, radio frequency identification (RFID) tags - which use wireless signals to write and read small amounts of data onto tiny microchips that can be stuck onto all kinds of items - will be attached to pallets the Defence Materiel Organization's logistics division uses.

As the logistics provider for the whole of the Australian Defence Force, DMO accounts for 32 percent of Australia's entire Defence budget.

Tasked with supplying everything from paper clips to missiles, the organization manages the movement of around $4 billion worth of inventory - and $2.5 billion worth of explosive munitions - across more than 50 physical locations in Australia and overseas.

Because of often tenuous supply chain links and delivery delays, multiple orders and poor visibility of the contents of shipping containers have made it a nightmare for troops to locate specific items in incoming shipments.

Wastage has long been a major problem among military forces: the US Army, for example, sent more than 42,000 containers of supplies to Gulf War troops - but half of those containers were unlabelled and many contained items that weren't even required by troops.

This kind of disorganization often stems from the haphazard and often spur-of-the-moment nature of military logistics, according to Malcolm McKeith, director of the visibility program within DMO.

"Often we've stuffed everything into one container, moved it as quickly as we could, and hoped that when we got there, we could find what we needed," he says. "One of the problems we have is that people don't have confidence in the supply chain, so they multi-order. We're very keen to apply the right technology to the task."

The DMO's pilot program will involve the testing of active RFID tags that will be attached to each transportation pallet. The tags will be programmed with the inventory numbers of each individual item loaded on the pallet, allowing a complete and accurate inventory to be acquired as laden trucks drive through a specially constructed scanning gantry.

Pallet data will be stored in DMO's core Mincom MIMS system, with constantly updated information letting logistics supervisors know exactly what goods are headed where, and when they'll arrive. When staff need a specific item, they'll enter that item's product code into handheld RFID scanners, then walk between stockpiles of containers. The scanner will query every RFID tag it can find until it locates the needed products.

The project was approved in June last year and went live this week.

Over the course of the trial, DMO will test various types of tags, including those incorporating sensors that can record shock, humidity, temperature and the opening of a container in transit. The pilot will also test interoperability with similar tags used by partners like the US and UK, which could further eliminate redundant shipments of goods to conflict areas.

This isn't DoD's first RFID pilot, but it is the largest.

Ultimately, the test will dovetail into a larger effort: the DMO's rewriting of its Australian Defence Force In-Transit Visibility system, which has recently encountered delays but will be adapted to operate using RFID data.