Integrating the Department of Defense Supply Chain: Techincial Report

By Eric Peltz; Marc Robbins | Go to book overview

CHAPTER ONE
Introduction

In the mid-1990s, spurred by major shortfalls in logistics processes in Desert Shield and Desert Storm and in the private-sector lean revolution, the Department of Defense (DoD) began a sustained supply chain operations process improvement journey with a substantial emphasis on lean thinking and Six Sigma–oriented programs through initiatives such as the Air Force’s Lean Logistics, the Army’s Velocity Management, the Defense Logistics Agency’s (DLA) and U.S. Transportation Command’s (USTRANSCOM) Strategic Distribution Management Initiative (SDMI), and Lean Six Sigma–oriented initiatives in maintenance depot operations.1 DoD’s tackling of new issues that emerged at Operation Iraqi Freedom’s (OIF) start and then demands to reduce wartime support costs further fueled these efforts. Rigorous process management, particularly the use of metrics for monitoring and control, became much more prevalent and ingrained in the culture and led to new initiatives, such as the Distribution Process Owner Strategic Opportunities.2 Much of this was made possible by improved databases and metrics development from earlier efforts—particularly SDMI, along with increasing supply chain visibility with the growing use and effectiveness of radio frequency identification data on shipments. With this sustained business-oriented perspective, the DoD supply chain community has increased performance and harvested significant efficiencies, most notably in the realms of stock positioning to better utilize the distribution network, transportation management, and depot maintenance.

Still, recent analyses and reports indicate that some initiatives offer room for further benefits and that untapped opportunities remain. For example, inventory of repair parts and other secondary items for sustainment is often considered excessive. While there has been significant rationalization of activities within processes and functions across organizations, such as warehousing, accelerated by the Base Realignment and Closure (BRAC) 2005 changes, there appears to have been less progress in integrating the supply chain across functions, both within DoD and with its external partners. One cannot point to existing metrics of supply chain integration or specific performance or cost measures to show supply chain integration

1 For example, see John Dumond, Marygail K. Brauner, Rick Eden, John R. Folkeson, Kenneth J. Girardini, Donna J. Keyser, Eric Peltz, Ellen M. Pint, Mark Y. D. Wang, Velocity Management: The Business Paradigm That Has Transformed U.S. Army Logistics, Santa Monica, Calif.: RAND Corporation, MR-1108-A, 2001; Marc Robbins, Patricia Boren, and Kristin J. Leuschner, The Strategic Distribution System in Support of Operation Enduring Freedom, Santa Monica, Calif.: RAND Corporation, DB-428-USTC/DLA, 2004; Department of the Army, “Depot Maintenance Initiatives,” 2011 Army Posture Statement, July 11, 2011; Paul G. Kaminski, “Lean Logistics: Better, Faster, Cheaper,” speech, Leesburg, Va., October 24, 1996; Richard W. Branson, “High Velocity Maintenance Air Force Organic PDM: Assessing Backshop Priorities and Support,” Air Force Journal of Logistics, Volume XXXIV, Numbers 3 and 4, June 2011, pp. 16–25.

2 U.S. Transportation Command, Distribution Process Owner Strategic Opportunities (DSO) Submission for: Supply Chain Operational Excellence, 2009.

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