Integrating the Department of Defense Supply Chain: Techincial Report

By Eric Peltz; Marc Robbins | Go to book overview
chain affecting a large number of processes over several years, creating inefficiencies and performance problems as each change was made in isolation.

Review of DoD Supply Chain Policy
The study reviewed the 2003–2004 DoD supply chain policy and regulations in effect when this study was conducted and when the case studies occurred.3 The review suggested that gaps in supply chain integration have been rooted in DoD supply chain policy. During the writing of this report, from December 2011 through May 2012, though, a new DoD supply chain materiel management policy instruction, informed by this study, was released and the accompanying detailed manual was in the coordination and release process. Both of these were reviewed in the course of the study as well. However, to help illuminate some of the underlying factors and thinking that has hindered supply chain integration and produced the opportunities for improvement discussed in this report, we list the major gaps that have existed in policy:
absence of an overall supply chain objective that integrates readiness and total cost
lack of an overarching supply chain framework that clearly articulates the roles of each organization and how each process or function affects the others
overemphasis on customer responsiveness and inventory minimization versus total cost and meeting customer needs by employing the best standard approaches
limited linkage of stock positioning to minimize total supply chain costs by integrating inventory, materiel handling, and transportation planning
limited guidance on when to use different distribution methods, which integrate transportation, materiel handling, and stock positioning planning
no requirement for collaborative planning with suppliers to enable better management of lead times, order quantities, and costs.

The authors provided overarching and detailed recommendations to address these gaps and to add new policies to engender supply chain integration, in addition to making specific recommendations for the new policy documents. All but the second have already largely been addressed in the new policy instruction and the draft policy manual.4


A DoD Supply Chain Framework

The supply chain objective and principles lead to a framework for the DoD supply chain that can provide a common understanding of the design, the roles of each function and process, and dependencies to factor into planning and decisions. Each function and process in the framework has defined, dependent roles as shown in Figure S.1. The framework is described in depth in Chapter Four.

3 Deputy Under Secretary of Defense for Logistics and Materiel Readiness, “DoD Supply Chain Materiel Management Regulation,” DoD 4140.1-R, May 23, 2003; Deputy Secretary of Defense, “Supply Chain Materiel Management Policy,” DoD Directive 4140.1, April 22, 2004.

4 Under Secretary of Defense for Acquisition Technology and Logistics, DoD Supply Chain Materiel Management Policy, DoD Instruction 4140.01, December 14, 2011; Assistant Secretary of Defense for Logistics and Materiel Readiness, DoD Supply Chain Materiel Management Procedures, DoD Manual 4140.01, Volumes 1 through 11, draft as of March 2012.

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