Integrating the Department of Defense Supply Chain: Techincial Report

By Eric Peltz; Marc Robbins | Go to book overview

CHAPTER THREE
Policy Review

In DoD, policy sets the overall tone by providing goals and guidance that set the bounds within which to operate. A review of policy and regulations that were in effect when this study was conducted and when the case studies occurred suggests that gaps in DoD supply chain integration have been rooted in DoD supply chain policy. As of the writing of this report, DoD Supply Chain Materiel Management Procedures (Assistant Secretary of Defense for Logistics and Materiel Readiness, DoD Manual 4140.01, Volumes 1 through 11, draft as of March 2012), which was informed by this study, was in the approval and release process. The rest of this chapter reviews the policy that has been in effect to help illuminate some of the underlying factors and thinking that have hindered supply chain integration and produced the opportunities for improvement discussed in Chapters Six through Ten. In addition, this review, along with a detailed review of the initial draft of the new policy, produced the policy recommendations proposed in the next chapter and to DoD as it refined the forthcoming policy.

First, policy embodied in DoD Directive 4140.1, “Supply Chain Materiel Management Policy,” 2004, and DoD 4140.1-R, “DoD Supply Chain Materiel Management Regulation,” 2003, lacks a clear articulation of the overarching supply chain objective that integrates readiness and total cost and that succinctly defines what readiness means from a sustainment perspective. Second, there are gaps in the guiding principles for DoD supply chain design and decisionmaking. Third, and perhaps most importantly, there is not a delineated, overarching structure or framework that provides a broad understanding of the roles of the major DoD supply chain components or elements, the dependencies among them, and how the individual elements, different functions, and different processes should be integrated. Throughout, policy is written from a process or functional view, without clear articulation of how each process or function affects the others and thus how effects on downstream processes should be considered. The interdependencies among processes are not described, and policies do not ensure these are taken into account. Fourth, in some areas there is no condition-based guidance on when to use the array of different standard approaches or process options, particularly with respect to approaches that require different processes to act in concert and ensure the standardized use of best practices. These could be thought of as rules that, when followed under the specified conditions, would ensure using the best approach for supply chain integration. While policy by itself cannot ensure effective execution, it lays the groundwork for how the system should work, and in terms of supply chain integration, it should describe how the different processes and functions should interact. With policy in place, enabling mechanisms, such as metrics aligned with overall outcomes, can then be used to drive toward optimal execution.

Besides not clearly integrating total costs and readiness in a combined objective statement at a high level, DoD policy has overemphasized customer responsiveness and inven

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