Velocity Management: The Business Paradigm That Has Transformed U.S. Army Logistics

Velocity Management: The Business Paradigm That Has Transformed U.S. Army Logistics

Velocity Management: The Business Paradigm That Has Transformed U.S. Army Logistics

Velocity Management: The Business Paradigm That Has Transformed U.S. Army Logistics

Synopsis

Velocity management brings a new way of doing business to U.S. Army logistics, with a renewed focus on the army customer and a powerful approach for process improvement that cuts across three critical performance dimensions: time, quality and cost. The goal of velocity management is to reduce the need for massive logistics resources by increasing the speed and accuracy with which materials and information are delivered. Key logistics processes are defined, measured, and improved, continuously, so customers--army units in garrison and deployed worldwide--get what they need, when they need it and at minimal cost.

Excerpt

Suppose you heard that your favorite restaurant had improved its business processes. It had streamlined its ordering process, improved delivery of needed food products, and sped up food handling, meal preparation, table service, and payment processing. As a consequence of these improvements, the owners of the restaurant presumably increased its profitability. Yet you might still reasonably wonder whether you would notice a difference as a customer. Would the food be better?

The customers of the Army's logistics system are in a similar position. What they want is for their vehicles and other equipment to be in good working order and available for their missions. It is all well and good that Velocity Management is achieving its goals of making Army logistics processes measurably faster, better, and cheaper. But have these improvements actually helped equipment readiness? It could be, for example, that spare parts are now supplied to maintainers more quickly, but other aspects of the process have not changed to capitalize on this improvement. Or perhaps the need to reorder parts because an initial diagnosis of the problem was faulty or incomplete has diluted the benefits of improved inventory management and distribution.

As Figure 14 showed, when the Army implemented the Velocity Management initiative, it anticipated that equipment readiness would ultimately benefit. Yet it was unable to measure the connection between equipment readiness and the performance of individual logistics processes. For instance, when a weapon system was unavailable or “down” for a period of time, the Army lacked the capability to determine how much of the downtime was due to delays in getting spare parts, how much to the performance of local inventories, how much to the diagnosis of the broken vehicle, and so forth. Conversely, the Army could not estimate the degree to which improvements in any of these areas might benefit equipment readiness. Such knowledge would help the Army to better target and prioritize its process improvement efforts.

What the Army needed was a tool analogous in intent to the activity-based cost systems that some corporations use to assess the . . .

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