Planning for Source Data Automation in Government Industrial Activities: Coordination Needed

Published by the Government Accountability Office on 1977-09-23.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                         DOCUMENT RESUME

03390 - [A27239353

Planning for Source Data Automation in Government Industrial
Activities: Coordination Needed. LCD-77-441; B-175132. September
23, 1977. 27 pp. + 2 appendices (3 pp.).
Report to Executive Directcr, National Center for Productivity
and the Quality of working Life; Secretary, Department of
Defense; by Fred J. Shafer, Director, Logistics and
Communications Div.

Issue Area: Automatic Data Processing: social Impacts of
    Computer-Based Systems (109).
Contact: Logistics and Communications Div.
Budget Function: Miscellaneous: Automatic Data Processing
Organizticn Concerned: General Services Administration.
Congressional Relevance: House Committee on Armed Services;
    Senate Committee on Armed Services.
Authority: P.L. 89-306. P.L. 94-136, sec. 204.

         Source data automation techniques collect data in
computer readable form at the point and time of an activity. The
data are automatically transmitted to a central computer or
intermediate storage device where it is recorded ahd analyzed.
Properly applied in the industrial environment, source data
automation can increase productivity through improved data
timing and accuracy, improved production control, and reduced
inventories. However, a source data automation installation can
be expensive and its benefits, some of which are difficult to
identify or mec,)ure, must be carefully weighed against the cost.
The Department of Defense, with its complex of manufacturing and
repair facilities and its large purchases from the private
sector, would be a prime benefactor of properly applied source
data automation.     i ndings/Conclusions: Some Government
industrial-type activities have employed source data automation
systems to their advantage. Barriers to diffusion of this
technology include a lack of criteria for assessing source data
automation's potential, complexities involved in equipment
procurement, and poor use of pilot study results. source data
automation systems and pilot projects are not tracked or
sponsored beyond the command level within the Department of
Defense, and feedback on the desirability of source data
automat A,is lacking. Application of source data automation in
Governm at industrial activities is growing, and a central
source for information on installed systems would be beneficial.
Recommendations: The Director of the National Center for
Productivity and Cuality of Working Life should coordinate the
Government's industrial source data automation efforts and
designate focal poirts to encourage development of criteria for
identifying potential applications, diffuse technology, study
problems affecting systems development and use, define aspects
needing standards, and coordinate with industry on source data
automation technology, uses, and research. The Secretary of
Defense should designate a group modeled after its manufacturing
Technology Advisory Group to coordinate the services' use of
source data automation. (Author/SW)

    Planning For Source Data
    Automation In Government
    Industrial Activities-- Coordination
    National Center for Productivity
      and Quality of Working Life
    Department of Defense

    Properly applied in the industrial environ-
    ment, source data automation can benefit
    productivity by improving data timing and
    accuracy, and through control of production
    processes. Some Government and private
    industrial activities have successful systems;
    however, there are barriers to widespread use
    and thus unexplored opportunities. Coordina-
    tion of Government efforts by the National
    Center for Productivity and Quality of Work-
    ing Life would help the orderly diffusion of
    the technology.

    LCD-77441                                    SEPTEMBER 23, 1977
                               UNITED STATES GENERAL ACCOUNTING OFFICE
                                       WASHINGTON, D.C.   20548



   To the Executive Director of the
     National Center for Productivity and
     Quality of Working Life and
     the Secretary of Defense

        We have studied the growing use of source data automa-
   tion in the GovernmF,it's industrial environment. This re-
   port points out problems incurred by activities in exploring
   this technology and discusses opportunities to improve the
   diffusion process.

       This report contains recommendations to you on page
  As you know, section 236 of the Legislative Reorganization24.
  Act of 1970 requires the head of a Federal agency to submit
  a written statement on actions taken on our recommendations
  to the House Committee on Government Operations and the Sen-
  ate Committee on Governmental Affairs not later than 60 days
  after the date of the report and to the House and Senate
  Committees on Appropriations with the agency's first request
  for appropriations made more than 60 days afttr the date of
  the report.
       We are sending copies of this report to the Director,
  Office of Management and Budget, and to the Chairmen, House
  and Senate Committees on Appropriations and Armed Services,
  the House Committee on Government Operations, and the Senate
  Committee on Governmental Affairs.

                                           4   Fred J.,hafer
  TO THE SECRETARY OF DEFENSE               National Center For Produc-
                                            tivity and Quality of Work-
                                            ing Life
                                            Department of Defense
              Properly applied in the industrial environ-
              ment, source data automation can increase pro-
              ductivity through improved data timing and ac-
              curacy, improved production control, and re-
              duced inventories. However, a source data
              automation installation can be expensive and
              its benefits, some of which are difficult to
              identify or measure, must be carefully weighed
              against the cost.
              Source data automation techniques collect data
              in computer readable form at the point and
              time an activity occurs. The technology for
              collecting data includes optical character
              readers and printers, magnetic Ftrip encoders
              and readers, embossed badge systems, and voice
              input. The data is automatically transmitted
              to a central computer or intermediate storage
              device where it is recorded and analyzed.
              Source data automation can apply to many as-
              pects of industry: material tracking, work
              force management, tool issue and receipt, in-
              ventory control, machine use, inspection re-
              sults, work order tracking, authorized person-
              nel access, purchasing, and sensitive item
              control. Applications are highly diversified
              and are found in Government and private indus-
              trial facilities, as well as in such service
              sector activities as hospitals, schools, and
              retail stores.

              The concept of source data automation for item
              identification and tracking is the same whether
              the items are repair parts, books, people, or
              services. For example:

                   --A naval ordnance station installed multi-
                     media terminals and card/badge readers

.T.lCbM.J.   Upon removal, the report
cover date should be noted hereon.                           LCD-77-441
                                        i                    LCD-77-441
    for time and attendance, labor distri-
    bution, production planning and control,
    and direct material control and estimates
    it saved over $300,000 in 1976.   (See
    p. 15.)

  -- A hospital installed a color bar code sys-
     tem to record transactions faster and more
     accurately and has increased efficiency
     and reduced stock levels.   (See p. 6.)

The Department of Defense, with its complex
of manufacturing and repair facilities and its
large purchases of manufactured products from
the private sector, would be a prime benefac-
tor of properly applied source data automa-

In the opinion oF GAO,

  -- the technology is not systematically dif-

  -- source data automation systems and pilot
     projects a-e not tracked or sponsored be-
     yond the command level within the Depart-
     ment of Defense, and

  -- feedback on the desirability of source
     data automation is lacking.

While some Government activities are using
source data automation, there are unexplored
opportunities.  Some activities have had dif-
ficulty keeping up with technology and identi-
fying good applications.   Other barriers in-
clude a lack of criteria for assessing source
data automation's potential, complexities in-
volved in equipment procurement, and poor use
of pilot study results.   (See p. 16.)

Application of these techniques in Government
industrial activities is growing.  A central
source for information on installed systems
would enhance the expansion of source data
automation and help avoid uneconomical appli-
cations. More cooperation between Government
and industry would also help to make the tech-
nology better known and develop standards.
(See pp. 12 and 13.)

GAO recommends that the National Center for
Productivity and Quality of Working Life serve
as a focal point to encourage the development
of criteria to assist in identifying the po-
tential for applications, the diffusion of
technology, the studying of problems affect-
ing development and use, the definition of
aspects needing standards, and the coordina-
tion with industry.

GAO also recommends that the Secretary of De-
fense designate a g.oup, modeled after its
Manufacturing Technology Advisory Group, to
coordinate the services' use of source data
automation and to work with the National Cen-
ter for Productivity and Quality of Working
These issues were discussed with officials of
the National Center for Productivity and Qual-
ity of Working Life and the Department of De-
fense. They were in general agreement that
there is a need for a focal point to diffuse
source data automation. The National Center
officials told GAO that this report would be
useful to them in determining their priori-
ties in the area of industrial productivity.
Defense officials said that in designating a
group to coordinate the services' use of in-
dustrial source data automation, they would
consider other aspects of the concept to as-
sure the proper interface with nonindustrial
activities.   (See p. 25.)


     1      INTRODUCTION                                   1
              How SDA works                                1
              Elements of an SDA 'system
              Some SDA applications                        2-
              Growth of SDA                                4
                                                           7 "
     2     MAJOR ISSUES                                    8
             SDA's relationship to automated
             SDA's importance to Government activities     8
             Restraints to SDA growth                      8
             Standardization                               9
             Review objectives                            12
             Current applications                         14
             Unexplored opportunities                     14
             Barriers to diffusion                        15
             Recommendations                              23
             Ageincy comments                             24
  5        SCOPE OF SURVEY
 I         Examples of SDA applications being used or
             studied by DOD
II         Principal officials responsible for
             administering activities discussed in
             this report

ADP   automatic data processing
DOD   Department of Defense
GAO   General Accounting Office
GSA   General Services Administration
SDA   source data automation
                          CHAPTER 1
     "Source data automation" (SDA) is a term used to describe
various means of collecting data about an event in computer
readable form at the point and time of the event's occurrence.
SDA techniques are among several advanced data entry methods
that are currently being used in Government and private indus-
trial facilities, as well as in such service sector activi-
ties as hospitals, schools, and retail stores. Recent rapid
advances in computer technology, such as emergence of power-
ful minicomputers, have permitted more imaginative uses, and
with these uses has come a need for more efficient data entry
techniques. In a related study we are addressing various
advanced data entry techniques and the need for agencies'
data processing installations to consider these more effec-
tive techniques.

    Alchough the SDA concept applies to both the service and
industrial sectors, this report addresses the use of SDA in
the industrial environment because of the significant invest-
ment and cost of operating industrial facilities and the in-
creasing need for better and more accurate data to manage the
facilities. However, since the tracking of items in the serv-
ice sector and in industrial activities is similar, we refer
to several successful service sector applications in this

    Coupled with other advances in technology, such as uzing
computers to control manufacturing processes and- to automate
material handling, SDA techniques can benefit the entire in-
dustrial management environment.


    Where there is a need to track large numbers of objects,
persons, or processes, there is a potential for SDA. As an
example, employees can insert identification badges into ter-
minals and the computer can instantly tell management the man-
power size and profile for the workday. Also, from job order
entries, the system can monitor every job through production,
answer inquiries, and immediately inform management of mater-
ial shortages and inoperative machines. At the end of the
day, or during the work shift, the system can compute the pay-
roll, job status, job cost, department performance, and other
analyses. The employee badge also can automatically control
access to secure areas and monitor employee movements.

(2) bar code readers which associate a configuration of bars
with a character, and (3) mark sense readers which detect a
mark or absence of a mark in specific locations.  Scanning
with optical character readers is an efficient method for
directly reading typed, printed, or written numbers.  Bar
code readers cost less than character readers but have the
disadvantage of requiring a device to prepare the bar code.
Mark sense readers are usually low cost and highly reliable
but are inflexible due to the need for preprinted forms and
exacting data placement and design.

Magnetic readers

     Characters to be read have magnetic properties which are
sensed. Advantages of this class are more immunity to dirt
and ease of document changes.  A disadvantage is the require-
ment for a special set of high-quality printed characters.
Most current applications are for transportation tickets,
clothing identification, and bank checks.

Voice input

      This technique is the most revolutionary, in that a com-
puter recognizes human voice patterns.   Spoken words automat-
ically enter data and can trigger control mechanisms of pro-
duction equipment.   It is slower than some of the other
techniques but can be performed simultaneously with other

Direct hand data entry

     A special pen converts handwriting into nachine language
at the time the data is written. The technology is based on
recognition of up/down/left/right patterns, but it is
relatively new and few varieties are offered.

Mixed media

     Several data entry technologies can be integrated into
one device, or several devices can be connected to a minicom-
puter to collect and consolidate data.  Either combination
is called mixed media input.


     Within the industrial environment, people and materials
are brought together to produce or repair products, many of
which are used by Government agencies.   In the public sector,
the Army, Navy, and Air Force operate  facilities to repair
airplanes, ships, and guns or to manufacture  repair parts,
weapons, and ammunition. DOD  also maintains  large

inventories of supply items. Common to all types of indus-
tries and the related supply functions is the need to sched-
ule, control, and account for the-movement of people and
materials through the various processes. However, tracking
systems in manufacturing and repair facilities can be more
complex than those in supply operations because, in the
former, the resources being tracked, (people, raw materials,
energy, tools, and data) are of a dynamic nature and are
being combined and converted tc finished products.
     SDA can be applied to many aspects of industrial opera-
tions, including material tracking, work force management,
tool issue and receipt, inventory control, machine use,
inspection results, work order tracking, authorized personnel
access, purchasing, and sensitive item control. Some of
these applications are in use in private industry and at
Government installations.

     Through plant visits, phone contacts, and literature, we
identified a number of private companies and Government ac-
tivities using SDA. Included were:
1. An automobile manufacturer that was able to increase spare
parts inventory turnover from 17 to 22 times a year, which
reduced the required inventory level and, with union coopera-
tion, permitted the reassignment of 40 employees. This
enabled the company to pay for a $1 million SDA system in
less than a year. The system consists of 180 terminals on
the receiving docks, in warehouses, and in receiving offices.
The receiving clerk keys in data on the incoming orders and
obtains purchase order information, such as quantities, and
stock level requirements for verification. Warehouse assign-
ments are also g:ven. Those activities were previously time-
consuming manual operations.

2. An aerospace manufacturer that increased the average
metal cutting utilization of 16 numerically controlled
machine tools, valued at over $3 million, from 15 percent
to 50 percent over a 4-year period (1972-76). The machine
operator pushes 1 of 12 status keys on input terminals lo-
cated at each machine. This action feeds status data to a
computer and also activates a master display panel which
gives management a constant picture of the status of the
entire system. The investment in SDA equipment and software
at this plant was less than $75,000.  (See p. 18.)
3. A naval ordnance station that estimated a savings of over
$300,000 in 1976 because of an SDA system consisting of a
minicomputer and 40 terminals. The data obtained, whihi is
entered by shop employees, replaces information previously
gathered through manual preparation of job cards and other

production reports. The data collected concerns time and
attendance, labor distribution, production planning and con-
trol, and direct material control.  (See p. 15.)
4. A manufacturer of electromechanical devices that estimated
a savings of $750,000 annually after changing its financial
accounting oriented manual filing system to a 200-terminal
shop activity oriented system. Shop employees enter data into
shop floor terminals that contain a limited number of keys,
a card reader, and a badge reader. This captures information
permitting the real time tracking of such things as customer
order status, in-process inventory flow, status of work on
parts in process, and materials control.

5. A manufacturer of computer terminals that estimated net
dollar savings of $309,000 for 1976, 1977,and 1978 following
the installation of a shop floor in-process SDA production
control system that collects data on the varying requirements
and specifications of each customer's orders. The in-process
status of a job order is keyed in at each work station, giv-
ing management real time data on the work-in-process inven-
tory. Shop employees are also able to call up specification
sheets for each order, a task that previously required time-
consuming manual matching of records.
     Not all SDA installations can demonstrate cost effective-
ness as clearly as do these examples. The justification is
often difficult and the bases nebulous, since there are many
intangible, although real, benefits. For example, it is
difficult, if not impossible, to affix a direct dollar value
to improved customer relations when repair parts can be
delivered within 2 days rather than taking a week. Yet an
organization servicing oil rig operators claims to have
secured and held customers due to the prompt service they are
able to offer using their SDA system.

     Another example of intangible savings from SDA involves
a hospital that uses hand-held wands to read color bar codes
on patient charts and bar codes that represent each hospital
service rendered and to transmit this information directly to
a computer. The system provides faster and more accurate
information collection, which, in turn, results in more
efficient work schedules, reduced paper work, reduced admis-
sion time, and improved billing procedures. The hospital
staff feels sure that the system is worthwhile; however, it
is difficult to quantify all of the dollar savings.
     The fact that the amount of savings is difficult to
assign to SDA justifications is a key reason for caution.   If
a justification is weighted too liberally on the benefit

side, there can be a real economic loss; if too conserva-
tively, then true and substantial benefits may be bypassed.
SDA systems must be analyzed carefully. They can be ex-
pensive and complex, and they require substantial software
support. In some cases, the volume of work, number of
people required, or dollar value of resources involved in
the potential application may not justify the expenditure.


     "Data Entry Today"' estimated 1975 sales for all com-
puter data entry devices (including non-source keying devices)
to be over $2 billion and projected over $2.8 billion in 1978.
In 1975, there were 275 manufacturers with over 600 data
entry products. The article reported that the trend is to
use devices which capture data at the source but such devices
are still not widespread.

     Sales of devices designed for the industrial environment
are projected to increase from $55 million (2.63 percent of
the total data entry mrarket) in 1975 to $150 million (5.36
percent of the total data entry market) in 1978 and are
expected to exceed $300 million in the early 1980s.

     As has happened with hospital data collection, equipment
manufacturers are becoming more user oriented. More effort
is being spent to develop devices which the clerk, nurse,
salesman, and factory worker can use with no prior data proc-
essing experience.

     "Data Entry Today" also reports that data entry technol-
ogy to date far exceeds its use; only recently has its use
been accelerating.

1ManagementInformation Corporation, Cherry Hill, New Jersey,
vol. 2, p. 9-1, 9-2, 9-10, 9-12.

                        CHAPTER 2

                       MAJOR ISSUZS


     In a previous report, 1 we described the use of the com-
puter and computer systems in manufacturing, particularly as
applied to small-lot or batch-type production. Computer-
integrated manufacturing, as described in that report, brings
together the numerous requirements for production under the
central control and guidance of the computer. Instructions to
the shop, such as schedules, estimated costs, manpower re-
quirements, inspection procedures, and materials requirements,
may be automatically computed and transmitted directly by the
computer. Even the electronic commands for automatically
operating the machines may be calculated and transmitted di-
rectly by the computer.

     In this production scheme, one function of SDA is to
obtain the necessary results of the computer directions and
to promptly report them to management so that the necessary
changes and modifications may be made. This may be compared
to a feedback system that monitors the movements and opera-
tions of a numerically controlled machine. In addition to
process controls, SDA can generate timely data on such produc-
tion factors as material used, scrap generated, and staff-
hours expended. With this information, machine utilization
may be monitored; workloads may be adjusted; inventories may
be rapidly adjusted to account for actual production; actual
schedules may be compared with forecasts; and costs may be
readily compared against the estimates.
     SDA is one of the building blocks in the concept of com-
puter-integrated manufacturing and, eventually, the automated

     The Federal Government is the largest single purchaser
of manufactured products. Each year DOD alone spends over
$20 billion on supplies and equipment produced by private
manufacturing firms and distributes these items throughout
its supply system. DOD also spends $2 billion yearly in the
private sector for maintenance,. repair, and modification of
its equipment, and over $6 billion for research and develop-
ment of new equipment items. In addition, it operates over
100 major manufacturing and repair facilities and about 50

1 "ManufacturingTechnology--A Changing Challenge to Improved
  Productivity," (LCD-75-436, Jure 3, 1975).

major supply activities. Many of these activities could
benefit by the application of SDA.

      In recent years, improved productivity has been sought
in every segment of our economy. The establishment of the
National Center for Productivity and Quality of Working Life,
in November 1975, is evidence of this concern. In the
simplest terms, productivity relates to the amount of out-
put in relation to input, usually expressed in terms of
labor; however, other input, such as materials and energy,
also apply. Industrial productivity in the United States
has become an area of real concern.

     In the 1976 study noted earlier, we pointed out the
need to make manufacturing productivity, through technology,
a national priority. It has been generally agreed that
human behavior approaches can provide a small, one-time in-
crease in productivity, but any long-term sustained growth
would have to come from technology.


     SDA systems can be costly; therefore, managers need to
know cost/benefit relationships if they are to make the
proper decision. Unlike a more straightforward type of
justification, such as comparing the staff savings from using
a computer-operated machine rather than a similar conven-
tional type, SDA justifications are often intangible and are
difficult to quantify in traditional savings. For example,
it would be difficult to quantify improved customer relations
due to speedier deliveries resulting from better spare parts

     SDA systems, like most industrial computer systems, are
relatively new, and there is not a wealth of information
available to draw from. Because of the wide variety of sys-
tems and applications, it is difficult to predict benefits

     Many times, need for speci'fic data that could not be ob-
tained under conventional practices makes SDA mandatory, and
traditional dollar return on investment is not the primary
motivator. In some instances, only after a system has been
installed are cost savings recognized and appreciated.

     This is not to imply that tangible savings cannot be
estimated. One large manufacturer, for example, estimated
that machine tool utilization would increase by about 50
percent as a result of its SDA system, and the savings that
would be realized from this benefit alone were expected to

                                                   system im-
pay for the system. The fact that the installed          200 per-
proved the machine tool utilization  by approximately
                                                 was  a  pleasant
cent, in addition to providing other benefits,
                                                     there is
      Another restraint is that, to our knowledge,nor is there
no one source for information on SDA equipment,
a trade organization for SDA..
      Even information received directly from suppliers
 fragmented in that manufacturers of computers many product
 communication, and office equipment all offer
                                                There is no
 lines that can be used for SDA applications.
                                         of  a single   SDA sys-
 single automation industry.  Components
                                                 data   process-
 tem can fall under the definition of automatic
                                    and in some cases the
 ing (ADP) or production equipment, way,
                             either       depending on the
 same item can be classified

procurement by Federal agencies
                                                       ADP procure-
      Although different procedures could apply to
ment compared to industrial procurement, thesame.   Each indus-
management planning requirements   are  the
                                                   should approve
trial process should be planned and management acquired in
the formal plan. Automated systems     should be
                                                       a subsystem
consonance with that plan. SDA can be considered
from the viewpoint of automation   planning.
                                                     levels of
      Within 'hne Government, there are differing
                                                      which depend
approval and controls in the procurement process The criteria,
upon the definition of the procurement    channel.
however, should be prudent management practices--practices of the
 that will best achieve the planning goals, regardless
 levels of approval involved in a procurement
      To provide for economical procurement of ADP       Law 89-
 and contemplating free and open competition,
                                          Services    Administra-
 306 was enacted authorizing  the General
                                             acquisition of this
 tion (GSA) to coordinate the Government's
                                                  with manufac-
 equipment. GSA negotiates schedule contracts
                                      maintenance   of ADP equip-
 turers for the purchase, lease, and                types, models,
 ment, and publishes yearly catalogs showing Federal Property
 prices, and terms of equipment offered.   The
                                                place orders for
 Management Regulations authorize agencies to         contracts,
 lease or purchase of equipment from the  schedule
 within the constraints of maximum orders
       If a proposed procurement exceeds this limitation,
                                           GSA   is
 delegation of procurement authority from

'he maximum order limitation for initial acquisition of cen-
tral processing units is 1, and for peripheral units of the
same type and model, the limit is 10 unless the purchase
price of 2 or more exceeds $400,000. These limits can vary
among contracts.

     In addition, GSA authorizes-agencies to enter into sep-
arate contracts with schedule contractors if they obtain
terms or conditions better than those in the schedule con-
tracts. Agencies are authorized to procure equipment not
available under a schedule contract only if its cost does
not exceed $50,000. When the cost of such equipment exceeds
$50,000, a delegation of procurement authority from GSA is
needed before acquisition. When GSA receives a reque:, for
a delegation of authority, it &an'elect to (1) grant acthor-
                           '   (2) participate with the agency
ity to the requesting agen>y.
in the procurement, or (3) procure the equipment for the
agency. It is required that, prior to any procurement, exist-
ing excess equipment be screened for available items that
could fill the needs.

     Agencies issue their own implementing regulations on ADP
equipment procurement. Within DOD full authority has been
delegated to the military services. As discussed in a previ-
ous report, 1 the military services regulations include addi-
tional reviews and approvals. For example, Navy regulations
require its various components to seek approval from the
Chief of Naval Operations for procuring from schedule con-
tracts ADP equipment exceeding $25,000 annual lease or
$100,000 purchase cost or for any nonschedule purchase of a
central processing unit, even though it'is within the GCA
blanket authority.

     Procurement of other types of equipment by Government
agencies does not fall under the control of a single Govern-
ment-wide manager. There is a screening process required,
similar to the ADP-equipment-screening process, to identify
available Government-owned equipment which could satisfy the
need. Actual procurement, however, is more decentralized.
The services, within the guide'lines set forth by DOD, have
authority to establish their own regulations for procuring
such industrial equipment as material handling or manufactur-
ing equipment. In general, the services must submit to DOD
for final approval those industrial projects exceeding $5
million and any project over $1 million that was not included
in a budget or apportionment submission to DOD.

1 "Usesof Minicomputers in the Federal Government: Trends,
  Benefits, and Problems" (FGMSD-75-53, Apr. 22, 1976).


     Public Law 89-306 gives to the National Bureau of
Standards the responsibilitiy to make recommendations for
establishing uniform ADP standards. If SDA systems are to
be used efficiently, it may be desirable to develop such
standards for hardware, software, and item identifiers. For
example, it may be beneficial to develop standards for item
identifiers when items are widely used. Some items have
potential for tracking by SDA and are used by several activ-
ities, both industrial and nonindustrial. Standards could
reduce the number of times item identifiers have to be devel-
oped and applied and thus could reduce sy.stem costs. For
example, a scanable bar code identifying the characteristics
of specific major reparable parts could help track a part
through industrial repair facilities, monitor its distribution
in the subsequent supply channels, and reclord use data during
its functional life. These standard codes could benefit all
users of an item, not just Government facilities.   In addition,
involving manufacturers of the items and the equipment might
encourage manufacturers to apply the code at the time of

     Standards for item identifiers should be coordinated be-
tween Government and industry. The commercial distribution
industry selected a standard bar code symbol for shipping con-
tainers in December 1975 and issued a manual for the symbol in
June 1976. The distribution code is compatible with the uni-
versal product code used by the grocery industry and with the
European article numbering symbol used by countries in Europe.
The distribution codes uniquely identify thousands of differ-
ent suppliers and millions of different items that are ware-
housed, sold, delivered, and billed through commercial distri-
bution channels.

     DOD has organized a Joint Steering Group for Logistics
Applications of Automated Marking and Reading Symbols to rec-
ommend a standard Defense-wide symbology for automated mark-
ing and reading of data on supply items. Current milestones
call for recommending a standard by 1978. DOD's symbol and
code should be compatible with that accepted by the distribu-
tion industry. DOD's study seems to be a feasible mechanism
for bringing the services together before large investments
in dissimilar systems make standardization impractical.
     There is widespread belief, however, that standards
might stifle initiative and inhibit technological progress.
We have previously studied the effects of ADP standards and
found that this generally is not the case. Although stand-
ards could have inhibiting effects if they are developed
prematurely or are not maintained, the timely development of

standards would afford a more economical use of resources
while allowing for initiative and technological progress.
In a current study, however, we have found that the develop-
ment of ADP standards has not been timely. This slow
development cycle, coupled with a long Federal procurement
cycle, makes some standards costly to implement because, by
the time they are published, agencies have a heavy invest-
ment in the nonstandard approach.

     In our 1976 study on manufacturing technology, we noted
a concept of standards emerging which could stimulate diffu-
sion of technology. The concept calls for a framework within
which companies can pursue the development of individual com-
ponents that will fit into systems with other manufacturers'
components. Standards usually denote an agreement on a
product or practice after they have been developed and mar-
keted, whereas the new concept would require a standard frame-
work within which products can be developed. This approach
can be an incentive to further development if the standards
are set by a truly representative group of supplier and user
industries with participation from Government to protect the
public interest.

     According to the National Bureau of Standards, this is
a powerful concept that could allow creating a system from
modular components purchased from competitive manufacturers,
without special engineering or software development. Compu-
ter-Aided Manufacturing--International and Brigham Young
University sponsored e meeting at Brigham Young in February
1975 of standards organizations working on aspects of compu-
ter-aided manufacturing. This group concluded that interface
standards or guidelines were desirable as a stimulus to the
further development and diffusion of this technology. How-
ever, it was recognized that there were obstacles and that
the practicality of such standa: is was not yet clear.


     From all indications, SDA can be an important step in
advanced industrial technology. The Federal Government would
benefit from the orderly growth of its use. During this re-
view we identified some restraints to this growth which must
be dealt with before SDA can obtain maxiium benefits--such as
the difficulty an activity has in recognizing and justifying
potential applications,in obtaining the most suitable equip-
ment, and in assuring the maximum use of previously acquired
knowledge of SDA technology. These concerns are discussed
in chapter 3.

                         CHAPTER 3


     An increasing numbe£ of Government industrial activities
are using SDA technology to improve their operations, and
many activities are beginning to study the technology and
examine its applicability. DOD has been one of the primary
Government users. (See app. I.) Advancements in SDA tech-
nology are rapidly emerging, creating new potential and
unexplored opportunities. As with the expansion of any new
technology, there are some problems. Some activities have
had difficulty in keeping up with the technology and in iden-
tifying good areas of application. Other problems we noted
concern lack of criteria for assessing SDA's potential,
complexities involved in equipment procurement, and poor use
of pilot study results.
     We believe that the orderly diffusion of SDA would be
enhanced by establishing overview responsibilities, which
could provide direction to the development and application
of systems.

     Some Grvernment industrial activities have successfully
applied SDA techniques and are realizing benefits. For

     -- Lawrence Livermore Laboratory's mechanical shop needed
        a more accurate, timely system to obtain operating
        reports on parts movement, labor cost, and machine use.
        SDA equipment was selected to record shop transactions
        as they occurred. The input includes an employee iden-
        tification badge and two pre-punched cards (one to
        identify the part and one to identify the machine) and
        a keyboard for variable data. The badge and cards are
        inserted into readers by the machine operator when a
        part is loaded into the machine and again when it is
        removed. Information is transmitted to the computer
        to update the shop's master files and generate reports
        which are available to shop managers and supervisors
        each morning. This system allows for simple, quick
        capture of data without taking valuable time from shop
        workers. Capturing information quickly allows manage-
        ment to better match personnel and equipment to work
        priorities. Also, data accuracy has increased.

     -- The Louisville Naval Ordnance Station installed an SDA
        system in September 1972, that consisted of a minicom-
        puter and 40 terminals (some multimedia and some badge/
        card readers). By means of badge or card insertion or
        key depression, employees on the shop floor enter data
        into the terminals which describes actions as they
        take place. Data is collected concerning employee ac-
        tivities, job status, and materials in use. This in-
        formation is used by management for labor distribution,
        production planning and control, and direct material
        control. Louisville estimates it saved over $300,000
        in 1976 from increased efficiency, elimination of
        work scheduling meetings and manual preparation of
        reports, and reductions in personnel.

       Other examples of existing and proposed systems are
noted in appendix I.

     It is important to point out that, even though there
have been some notable successes with SDA, many opportunities
have not been explored. Identification of SDA opportunities
requires a sound knowledge of the operations at the industrial
activity, as well as knowledge of available equipment which
might improve the operation and increase productivity. This
places the burden for exploring SDA use with each individual
industrial activity.  It would be helpful to these activities
if SDA experiences could be shared.

     We observed, however, that diffusion of the knowledge
gained from SDA experiences has been limited. Some activi-
ties have not used SDA although other activities with similar
operations have benefited from this technology. For example:

     --The Naval Air Rework Facilities have had employee
       badge and punched card readers in their shops for over
       14 years. They are being replaced by an updated SDA
       system which will provide more timely, as well as
       additional, information. The Naval Air Systems Com-
       mand's 1975 study estimated that the SDA system would
       cost $4.1 million and that a manual (keypunch) system,
       even if it could be timely, would have cost over $7
       million. In contrast, Naval shipyards, with similar
       operations in industrial shops, still have manual
       systems. Although SDA was studied by the Philadelphia
       Naval Shipyard 10 years ago and found to be practical
       and cost effective, it was not implemented. Naval
       Sea Systems Command officials said SDA had not been
       implemented in shipyards because computer memory ca-
       pabilities needed to be increased and, after that was

      accomplished, correcting problems with the system took
      priority over additional system capability.

     Many other Government activities have manual data entry
systems with long waiting times between an event's occur-
rence and management's notification of the event.  For example:

     -- Warner Robins Air Logistics Center personnel estimated
        their average inventory to be $1.8 billion and their
        daily receipts to be $1.5 million. When an item is
        received, the shipping documents must be processed
        and keypunched so the computer can issue the item or
        assign it to storage. Material sits on the receiving
        dock an average of 2 days before personnel are noti-
        fied what to do with it.  Using SDA to record material
        receipts faster could help reduce inventory pipeline
        time and thereby reduce stock levels.

     -- Norfolk Navy Shipyard operates about 37 tool rooms
        with about 20,000 different tools valued at approxi-
        mately $15 million. About $112,000 was spent from
        August 1974 to August 1975 to replace lost tools.
        Using a manual system makes it difficult to determine
        who has which tools or whether another tool room has
        the tool a worker requests. Officials recognize a
        need for an SDA system and are studying alternatives.

     Numerous potential SDA applications exist within the
Government's industrial complex; greater investigative ef-
forts on the part of Government industrial activities and
improved diffusion of experiences on the part of activities
using SDA are required.


     In analyzing the concern for unexplored opportunities,
we looked at some of the primary factors affecting diffusion.
We noted that a lack of a centralized source of knowledge,
unclear criteria for assessing SDA's potential, problems
with equipment procurement, and poor use of pilot study re-
sults all act as barriers to diffusion.

Need for central source of information

     Source data automation is accomplished through such a
range of diverse technologies and applications that it is
almost impossible to define a "source data automation indus-
try" to which the prospective user can turn. For example,
manufacturers of highly diversified lines of computers,
computer peripherals, and communication equipment all con-
tribute to SDA systems.  The Federal Council for Science and

 Technology reported that the lack of a structured
 industry hampers the coupling of suppliers to     automation
 puts the burden of managing automation on users          and
 suppliers. 1 Similar circumstances surround     rather  than
                                             SDA--a segment
 of the automation industry.
      Today's SDA users are confronted with a proliferation
of input devices, system options, and software.
vate research companies, such as Management       Some pri-
Corporation and Datapro Research Corporation,Information
                                               prepare re-
ports on various classes of equipment. The
                                             General Services
Administration, which has responsibility for
                                              automatic data
processing equipment, tracks central processing
broad categories of data entry equipment being units and
                                                used by the
Federal Government but does not track computer-controlled
industrial equipment or the associated
devices. Nor is information maintained advanced  data entry
                                         on the types of ap-
plications in the industrial environment.

     The primary barriers to diffusion of SDA cited
dustrial activities illustrate                       by in-
                               this fragmentaticn.   Poten-
tial users usually lacked knowledge of equipment
ware requirements or believed no equipment was    and soft-
their environment. Some activities recognized  suitable  for
                                               problems  with
manual systems but did not know enough about
                                             SDA to know if
it was feasible.

      Personnel we contacted at various activities
us they generally keep abreast of technology        informed
trade journals and by attending equipment shows; reading
                                                   but with
few exceptions they said a data bank on available
and equipment in use by type of application         equipment
                                             would help them
understand and evaluate the potential for SDA
tivities. Without this type of information, in their ac-
                                              it is difficult
to appreciate the benefits which could be gained
                                                   from SDA.
These concerns are not unique. Our 1976 report
turing technology contained the results of a     on  manufac-
attitudes and perceptions of U.S. manufacturers       of the
nology. We reported at that time that the primarytoward  tech-
to diffusion were the cost of the systems, and       barriers
                                                lack of under-
standing of computer capabilities in manufacturing
ments.                                               environ-

1 "Automation
            Opportunities in the Service Sector," report
 the Federal Council for Science and Technology,         of
 on Automation Opportunities in the Service
                                            Areas, May 1975.

Need for criteria
      Because SDA technology can be costly and the state of
the art has not advanced to the point where clear economic
criteria can always be established, the expected benefits,
although somewhat intangible, should be clearly stated so
they can be considered in relationship to system cost. A
clear statement of the benefits expected is important also
because it should be the basis for evaluating the success of
the system. This is especially true since it is not unusual
that the need for SDA is related to such benefits as the
need for tighter control, security, or more timely, accurate
data--not always quantifiable--rather than strictly economic
benefits. For example, one large aerospace manufacturer
noted that the chief reason for installing an SDA system was
to be able to pinpoint problems in a timely manner and assign
responsibility for correcting these problems. Prior to the
SDA system, it was difficult to determine the extent or seri-
ousness of a problem because manual collection of the neces-
sary data was a costly time-consuming process. The SDA sys-
tem now quantifies the amount of time required for such inef-
ficiencies as waiting for material, waiting for a maintenance
man, absence of an operator, or lack of tooling and gives man-
agement access to this information on a real time basis. The
company has been able to set priorities and concentrate on
the most serious problems. The results have been significant.
As an example, parts loading and machine setup are reported
 to have been reduced from 20 percent of the overall time to
10 percent by installing improved overload handling devices
and improved fixturing. The absence of an operator has been
 reduced from 25 percent to 5 percent, resulting in increased
use of the equipment from 15 percent to 50 percent over
4 years and, consequently, tangible savings. However, not
 all areas for improvement, and the extent to which they could
 be improved, were discernable prior to the installation and
 thus the justification could not be based solely on a
 predictable cost-effective basis.
     Because of the changing nature of SDA and the wide range
of applications, there are no cost models or other criteria
available for activities to uniformly assess potential and
assure that all costs and benefits are considered when in-
vestigating SDA and preparing a justification. We believe
that, at a minimum, the following points covering costs and
potential savings should be considered in any industrial SDA

      -- Data entry devices are located at the source and may
         be operated through such methods as optical or mag-
         netic readers and voice control.
-- Connecting lines between the input devices and the
   computer could be expensive, especially if coaxial
   cables are required.
 -Computer requirements could be met either by a mini-
  computer which costs as little as $15,000 or through
  a shared arrangement using part of the capabilities
  of a larger more expensive computer.

-- Software programs that are especially prepared
   for the particular application and enable the
   system to interpret, assimilate, and develop the
   required reporting data are a necessary part of
   the system and frequently are a major portion of
   the total system cost.

Potential areas of savings

-- Reduced storage inventory would reduce the overall
   inventory cost. Due to more accurate and timely ac-
   counting, it may be possible to maintain lower levels
   of inventory awaiting processing.
-- Reduced in-process inventory is possible. An up-to-
   the-minute accounting is maintained for work in proc-
   ess and affords closer control, so that the amount
   of inventory that is normally kept as a buffer be-
   tween operations may be reduced.
-- Ordering of supplies and materials can be an almost
   automatic process with the purchase orders being pre-
   pared by the computer based on preestablished mini-
   mum stock levels.

-- Accountability for tools and operating hardware can
   be greatly improved.

-- Determination of cause and extent of operating prob-
   lems can be simplified. With an SDA system it is
   possible, for example, to determine precisely the
   downtime on specific equipment and to take measures
   to improve uptime.
-- More readily available cost data could result in im-
   proved estimates of both materials and manpower.

-- Better use of supervisory personnel could reduce the
   number required. The time a foreman spends on the
   shop floor taking expediting actions can be reduced
   since he would be provided with timely status reports.

    -- Management can respond and correct adverse situations
       more quickly and thus can reduce the cost effect of
       the problem.
     -- Quality control is   enhanced. Permanent records can
        be prepared almost   simultaneously with the inspection
        procedure, thereby   reducing data transcribing which
        is a common source   of error.

     In addition, the National Bureau of Standards is plan-
niag to publish the results of a project, "Guidance on
Evaluation of Data Acquisition Technology." While it does
not specifically address the industrial environment, it may
be useful to industrial activities.
Procurement problems
     Another concern facing an activity in obtaining an SDA
system is found in the procurement process. As discussed
in chapter 2, SDA equipment can sometimes be classified
either as ADP or industrial equipment, and procedures for pro-
curing ADP equipment are more stringent than for the other
types.  In some instances, agencies obtained a more expensive
alternative system because avoiding data processing procure-
ment channels was simpler and faster.
     Similar problems on procuring data processing equipment
were also disculssed in our April 1976 report to the Congress.
(See footnote, p. 11.) Just as in our current observations,
this report noted chat agencies said data processing pro-
curement regulations were too complicated and caused agencies
to incur excessive administrative costs and delays.
     Procurement through several channels also makes it more
difficult for an activity considering SDA to obtain infor-
mation on existing systems and the types of equipment most
suited to various applications. Selection of data entry
devices is a particularly important process in the industrial
environment because of the need for input stations designed
for ease of use to minimize errors of operators not trained
in ADP techniques. Many times equipment typically for the
office environment, such as remote terminals with a keyboard,
would be a poor choice in a shop. Too often the process of
examining available equipment is cut short because equipment
choices are limited to that easiest to get. For example,
     -- Mare Island Naval Shipyard is installing 27 key-to-
        disc terminals costing $97,000 annually to provide
        information on status of ship repairs. Officials
        said they did not evaluate other types of SDA equip-

     ment, which might have been better, but chose equipment
     that could be obtained under local authority in order
     to reduce the lengthy procurement process associated
     with data processing equipment.
Poor coordination and followup

     The large number of ongoing SDA studies (see app. I)
indicates there could be benefits in having an entity over-
seeing the direction of these efforts. Some duplication in
study effort is unavoidable and even desirable but, without
an overview, it can become counterproductive.  For example:

     --Naval Air systems Command authorized $44,000 for the
       Pensacola Naval Air Rework Facility to develop an
       automated tool control system. Naval Sea Systems
       Command tasked the Norfolk shipyard to study tool
       control using an embossed badge and optical character
       reader system. Meanwhile, Charleston Naval Shipyard
       tried two systems, one optical character reader and
       one keyboard; and the Norfolk Naval Air Rework Facili-
       ty is considering a study of the use of a light pen-
       cil.  Additionally, an option for automated tool con-
       trol using keyboards is included for all Naval Air
       Rework Facilities in their standard system. Each
       activity has similar tool control problems which in-
       dicates that some of the overlap in studies may have
       been unnecessary.

     Several commands have internal mechanisms, such as the
Naval Air Systems Command's Workload Control Teams, for
sharing ideas and problems.  These can be valuable vehicles
for identifying good applications and monitoring study ef-
forts. Most of the activities we visited were aware of
studies or installed systems within their commands. Also,
most services have a headquarters group that monitors in-
dustrial activities of similar types, such as (1) the Naval
Air Systems Command's Depot Management Division for all
naval air rework facilities and (2) the Air Force Logistics
Command for all air logistics centers.  However, of the
activities included in our review, few were knowledgeable
of SDA studies outside their commands even though the poten-
tial sharing could go beyond command levels.  A higher level
mechanism could be used by DOD to foster interchange of SDA
information among services; however, to date, no DOD group
has emphasized industrial uses of SDA.

     When agencies do procure SDA equipment for tests and
ongoing operations, they should follow up periodically to

determine whether the equipment's use is effective and ef-
ficient. Sometimes studies are initiated by headquarters
groups but progress is not monitored.
     -- At the Defense Logistics Agency depots in Mechanics-
        burg, Pennsylvania, and Memphis, Tennessee, voice-
        activated SDA equipment valued at $77,000 was pur-
        chased for automatic sorting. According to Defense
        officials, technical problems and rejection by employ-
        ees caused depot commanders to discontinue its use.
        Headquarters officials did not become aware of this
        until a year later when Mechanicsburg requested to
        excess the equipment. These officials said staff
        shortages and a desire to allow depot commanders free-
        dom of operation limited the amount of followup and
        involvement in the test.
     Knowing the results of SDA in use can help determine
future equipment selections and provide valuable information
which can affect the success of other operations.

                            CHAPTER 4

      Properly applied in the industrial environment,
 offers many benefits, including increased utilization SDA
 facilities and manpower, improved data timing and      of
improved production control, and inventory reduction--all
 leading to increased productivity. However, because
ence is lacking, potential applications have to be     experi-
analyzed to insure that maximum benefits will be    carefully
      Some Government industrial-type activities have
SDA systems to their advantage; but there are barriersemployed
diffusion of this technology and, thus, unexplored       to
nities. Some activities have had difficulty keeping opportu-
                                                       up with
the technology and in identifying good applications.
others, problems occurred with (1) the criteria for     Among
SDA's potential, (2) equipment procurement, and (3)   assessing
lowup of pilot studies. More coordination is needed the fol-
agencies to draw on the experience of others and to to allow
together to solve common problems.

      The Federal Government should plan for an increase
industrial SDA activity. Assignment of overview          in
ities for monitoring SDA development and use and  responsibil-
                                                  for maintain-
ing a central source of information on installed systems
enhance its orderly expansion within industrial-type      would
ities. Greater cooperation between industry and       activ-
would also be beneficial in diffusing technology Government
ing standards.                                    and develop-

     We believe the Department of Defense is in a key
to help this expansion because it has a large industrial
supply complex and would be a primary beneficiary        and
                                                  of improved
use of SDA techniques.
     The National Center for Productivity and Quality of
ing Life, by authority of section 204 of Public
                                                 Law 94-136,
should encourage the diffusion of SDA by coordinating
Government's efforts to use SDA in its industrial
The Center should encourage active participation
the National Bureau of Standards, and other Federal DOD, GSA,
having responsibility for, or interest in, the future
in industrial activities. The Center should also        of SDA
                                                   work with
industry to further the development and diffusion

appropriate applications. The Center's responsibilities
should include designating a focal point to

     -- serve as a source of information on SDA systems being
        used or studied in the industrial environment,
     -- serve as a mechanism to systematically diffuse technol-
        ogy, including training and indoctrination where
     -- study whether criteria could be developed to assist
        activities in identifying appropriate SDA opportunities
        and avoiding unwise investments,
     -- monitor systems to assure that benefits are being
        achieved and to provide more knowledge to ongoing and
        future endeavors,

     -- study the extent to which procurement problems ad-
        versely affect SDi, systems and make recommendations
        to GSA and/or the services to assure that procurement
        practices are not a disincentive to obtaining the most
        productive equipment,

     -- explore problems common to industrial and nonindustrial
        uses of SDA,
     -- define aspects of systems needing standards and en-
        courage the National Bureau of Standards to develop
        such standards, considering those existing for
        private industry, and

     -- serve as a communication link between the Government
        and industry, especially when defining areas where
        research is needed and identifying aspects of systems
        needing standards.


     We recommend that the Director of the National Center
for Productivity and Quality of Working Life coordinate the
Government's industrial SDA efforts and designate focal
points to encourage development of criteria for identifying
potential applications, diffuse technology, study problems
affecting SDA systems development and use, define aspects
needing standards, and coordinate with industry on SDA
technology, uses, and research.

     We also recommend that the Secretary of Defense des.g-
nate a group modeled after its Manufacturing Technology Ad-
visory Group to coordinate the services' use of SDA. Such a
group could materially assist the National Center for
Productivity and Quality of Working Life to diffuse the
technology, assuring more efficient use of resources.


     We discussed this report and our recommendations with
officials of the National Center for Productivity and Quality
of Working Life and the Department of Defense. They agreed,
in general, that there is a need for a focal point to facili-
tate SDA diffusion.

     The National Center officials agreed that diffusion of
technology through encouraging active participation of execu-
tive agencies was a proper role for the Center and that our
recommendation would be useful to them in determining prior-
ities in the area of industrial productivity.

     DOD officials indicated they were interested in assuring
that the services coordinate their industrial SDA activities
and would consider the appropriateness of designating a focal
point to provide an overview on all SDA aspects, assuring the
proper coordination with nonindustrial SDA activities.

                         CHAPTER 5

                      SCOPE OF SURVEY

     At the military services' headquarters in Washington,
D.C., we reviewed policies, procedures, and reports pertain-
ing to the present and planned use of SDA equipment.  We vis-
ited or contacted the following DOD activities and inter-
viewed officials concerning the progress and problems encoun-
tered with the design, acquisition, and management of SDA

U.S.   Air Force:

       Ogden Air Logistics Center, Ogden, Utah
       Sacramento Air Logistics Center, Sacramento, California
       Warner Robins Air Logistics Center, Atlanta, Georgia

U.S. Army:

       Anniston Army Depot, Anniston, Alabama
       Corpus Christi Army Depot, Corpus Christi, Texas
       Letterkenny Army Depot, Letterkenny, Pennsylvania
       New Cumberland Army Depot, New Cumberland, Pennsylvania
       Sacramento Army Depot, Sacramento, California
       Tobyhanna Army Depot, Tobyhanna, Pennsylvania

U.S.   Navy:

       Central Naval Ordnance Management Information Systems
         Office, Indian Head, Maryland
       Charleston Naval Shipyard, Charleston, South Carolina
       Computer Applications Support and Development Office,
         Kittery, Maine
       Little Creek Amphibious Base Commissary, Norfolk,
       Management Systems Development Office, San Diego,
       Mare Island Naval Shipyard, San Francisco, California
       Naval Air Rework Facility, Alameda, California
       Naval Air Rework Facility, Norfolk, Virginia
       Naval Air Rework Facility, Pensacola, Florida
       Naval Resale Service Office, Brooklyn, New York
       Naval Supply Center, Norfolk, Virginia
       Naval Supply Center, Oakland, California
       Naval Weapons Station, Yorktown, Virginia
       Norfolk Naval Shipyard, Portsmouth, Virginia
       Norfolk Naval Station Commissary, Norfolk, Virginia

Defense Supply Agency:

     Defense General Supply Center, Richmond, Virginia
     Other Federal activities contacted during our survey
included the National Center for Productivity and Quality of
Working Life, the Library of Congress, the National Bureau of
Standards, the United States Postal Service, and the General
Services Administration.

     We also visited libraries, hospitals, private and city
government warehousing operations, and private manufacturing
concerns which had installed SDA systems. In addition, we
visited several manufacturers of SDA equipment, a private
research company, and studied literature on SDA technology
and applications.

                                                                                                                                                                                                                                       APPENDIX I

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APPENDIX II                                                     APPENDIX II

                          PRINCIPAL OFFICIALS



                                                   Tenure-of office
                                                   From          To

                      AND QUALITY OF WORKING LIFE

     Vacant                              Jan. 1977                Present
     Nelson A.   Rockefeller             Nov. 1975                Jan. 1977

     George H. Kuper                     Nov. 1975                Present

                         DEPARTMENT OF DEFENSE

     Dr. Harold Brown                    Jan. 1977               Present
     Donald H. Rumsfeld                  Nov. 1975               Jan. 1977
     James R. Schlesinger                July 1973               Nov. 1975
     William P. Clements, Jr.
        (acting)                         Apr.    1973            July 1973
     Elliott L. Richardson               Jan.    1973            Apr. 1973
     Charles W. Duncan, Jr.              Jan.    1977            Present
     William P. Clements, Jr.            Feb.    1973            Jan. 1977
     Dr. John P. White                   May     1977            Present
     Carl W. Clewlow (acting)            Apr.    1977            May  1977
      Dale R. Babione (acting)           Jan.   1977             Apr. 1977
      Frank A. Shrontz                   Feb.   1976             Jan. 1977
      John J. Bennett (acting)           Apr.   1975             Feb. 1976
      Arthur I. Mendolia                 Apr.   1973             Mar. 1975
      Hugh McCullough (acting)           Jan.   1973             Apr. 1973

     (947221)                       30