Partnership on the Table

MLF 2011 Volume: 5 Issue: 5 (June)

Vice Admiral Alan Thompson’s interview in this issue of Military Logistics Forum keenly describes the movement of the Defense Logistics Agency into a new era. Continuing to be sharply focused on support for the warfighter and contingency operations the DLA is working to drive costs even lower than it has historically. While always keeping costs in check, the past decade the emphasis has leaned more to the support side, current budget realities now require a sharp eye on both.

Military Logistics Forum reached out to several key DLA industry partners and asked their view on how they can best dovetail their capabilities with the DLA’s to fulfill the need to reduce cost, improve efficiencies and continue to deliver everything the warfighter needs when they need it.

Mark Hitch
Senior Business Development Director
AAI Logistics & Technical Services

AAI Logistics & Technical Services (AAI LTS) provides award-winning systems and component-level sustainment support to the U.S. Army, Navy, Air Force and Marine Corps. Today, AAI LTS works effectively with the Defense Logistics Agency on our performance based logistics (PBL) partnerships.

A successful DLA partnership centers on two areas: effective communication and a credible forecast. Effective communication establishes a rapport and common goals. Both DLA and the contractor have the same goals, so as a result we work together to deal with the issues and solve the problems. The ability to accurately forecast enables the right mix of components and parts at the most economical cost point, which maximizes efficiencies in the quantity of repair parts and promotes cost efficiencies at the repair center in terms of turnaround time.

Our largest partners are military depots, which thrive on having the right parts at the right time for their repairs. Our successful military depot PBLs address parts and equipment issues collaboratively and devise new methods of reducing costs and lead times while maintaining high quality. Working together, we are able to trim turn times and deliver to the warfighter more quickly. This is a major reason we are able to meet our availability objectives on our partnership programs. AAI LTS integrates its supply chain process with DLA, enabling increased availability at lower cost.

Tomorrow will present some interesting opportunities with DLA. DLA has already assumed the depot-level repairable, or DLR, lead. With that, there is opportunity to create cross-service savings on similar components. AAI LTS is positioning itself to be one of the contractors DLA chooses to deliver cross-service component availability. We will accomplish this through utilization of centers of excellence across the military depots, which will reduce cost and increase organic repair output.

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Jeffrey Miller
Vice President, Defense Supply Chain Solutions
Accenture

The Defense Logistics Agency is challenged with balancing cost-cutting and efficiency initiatives with supporting warfighter readiness. DLA must urgently reduce logistics support costs without sacrificing superior logistics services—getting warfighters what they need, when they need it.

Accenture believes that focused analytics can help solve the root causes of today’s highcost logistics problems, such as:

• Organizations sometimes assume that problems with integrated logistics support (ILS) elements are parts problems.
• There are a host of ILS elements that impact total ownership cost (TOC), making it difficult to identify which is driving the cost problem.
• Organizational and data boundaries make it difficult for logisticians to see the whole picture.
• Organizations lack the specialized skills and tools to solve TOC problems using all of the data available or all the techniques possible.

Advanced analytics is the scientific application of quantitative and statistical techniques to drive business value and cost savings. Focused analytics initiatives can help DLA identify and solve problems related to total cost and efficiency.

When properly implemented, analytics allow organizations to drive insights back into the business or mission to realize new outcomes. By applying advanced analytics to total logistics support cost problems, DLA can:

• Drive immediate and rapid TOC savings.
• Understand actionable outcomes.
• Bring together data owned by multiple stakeholders.
• See the big picture of TOC cost drivers.
• Make more informed decisions.
• Create an opportunity for a valuebased arrangement to reap the savings.

Taking a seven-step approach is the first part of a strong analytics strategy: determining the business problem; identifying the right business data; collecting, storing and cleansing the data; solving the business problem; developing the business case; incorporating solutions; and monitoring performance.

An effective analytics approach rests on a common sense premise: focus on a highcost logistics support problem to move past the theoretical to realize actionable outcomes.

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Carey Smith
Vice President, Technical Services
Lockheed Martin Global Training and Logistics

Military logistics inevitably requires getting supplies to places that are inhospitable—whether it’s due to damaged or nonexistent infrastructure, physically daunting terrain or the real possibility of hostilities. It is the lifeline for the frontline— from the parts to maintain armored vehicles to materials required for a forward operating base to the very food warfighters eat. For the past 50 years, that’s what the Defense Logistics Agency has done for warfighters around the world—and Lockheed Martin has been proud to support its efforts.

Along the way, our experiences taught us lessons that have helped us serve the DLA in that mission.

• Adopt a partnering mindset: Whether it’s the DLA, our teammates or vendors, we approach the task at hand collaboratively and the results show. For example, the DLA/Michelin/Lockheed Martin initiative to deliver military aircraft tires worldwide has a 98 percent on-time delivery rate—in some cases, in as little as two days. This efficiency reduced inventory and costs to the DLA. It’s made it clear to us that a “one team” mindset, especially when confronted with challenges, gets the job done every time.
• Take advantage of robust, adaptable technologies: In logistics, efficiency is the name of the game—and asset visibility and tracking systems give you the edge, reducing waste and achieving a seamless operation. That’s why we use our SCM+ technology, which integrates two affordable, off-the-shelf products to create one system that manages the whole process from soup to nuts, from overseeing orders and inventory to forecasting demand based on DLA’s historical data.
• Look at the big picture: We’re always examining ways we can enhance our support of DLA’s big-picture goals. One method we’ve used is to internally connect the dots—looking across our business at how we help the DLA through the Industrial Prime Vendor program, preventing downtime by keeping Air Force logistics centers stocked with parts, or ensuring vehicle repair parts get where they’re needed through the Fleet Automotive Support Initiative – Global (FASI-G) program, and even providing RFID tags and sensors through our Savi business. A large-scale understanding of our resources and program best practices enhances our ability to support the DLA.

As the DLA celebrates the 50-year mark, we know their record of support to warfighters will remain strong—and we welcome the opportunities to apply our lessons in partnership.

Glen San Giacomo
Senior Vice President/Business Unit General Manager,
Logistics and Engineering Solutions Business Unit
SAIC

Science Applications International Corporation (SAIC) is aware of the necessity to reduce costs and improve efficiencies, consistent with recent guidance from DoD leadership. SAIC’s role is in providing DLA and DLA’s customers with a wide range of services—supply chain management, IT development/sustainment, help desk management and environmental support—and SAIC provides supplies/ services to DLA clients around the globe. Our offering gives us visibility to countless customers, teammates, suppliers and their issues, insights and ideas, positioning us to play an important role in assisting DLA in their mission to meet these objectives. In supply chain management, it’s essential to collaborate across the entire supply chain to ensure that requirements make operational and business sense and to communicate to stakeholders when they don’t. Two areas that offer potential for savings are business processes and use of technology.

1. DLA continuously seeks to obtain fair and reasonable prices for all products and services procured. Industry’s business processes must align closely to this objective as greater emphasis is placed on price reasonableness. Use of a Defense Contract Management Agency (DCMA)-approved purchasing system helps reduce risk and improve customer confidence that every buy is performed properly. We must also place greater importance on maximizing competition and obtaining negotiated savings. This begins with continuous training of our procurement staff, arming them with the tools needed to successfully perform these tasks. It also involves open dialogue with customers and our suppliers, many of which are small businesses, to ensure requirements are properly interpreted.

2. Use of commercial technology offers numerous benefits. Automated processes reduce touch labor, lowering infrastructure costs and risk of mistakes. Integrated systems with collaboration functionality enable more accurate demand forecasts, resulting in optimized procurement actions and inventory levels.

Together, DLA and industry have the potential to recognize tangible savings. While we work to reduce costs, eliminate non-essential requirements and improve the way we operate, these efforts cannot negatively impact readiness or quality. We need to maintain proper balance. We must be fiscally responsible, while remaining focused on a key reason we exist—support of our nation’s warfighters.

Robert T. Dail
President
Supreme Group USA LLC

Supreme is a global market leader in customized supply chain management and associated logistics service solutions in the world’s most remote and challenging regions.

For more than 50 years, Supreme has successfully supported military customers in developed and developing markets. Alfred Orenstein, a former U.S. Navy petty officer and Army non-commissioned officer who served in the European theater of operations during World War II, founded Supreme in 1957 after being honorably discharged from active duty in Germany.

Supreme has evolved and grown significantly over the years and presently employs a multi-ethnic and multi-cultural workforce of nearly 10,000 employees from more than 40 countries. Supreme operates in more than 20 nations and supports a customer base that includes the world’s leading military and commercial entities.

With a wealth of in-house capabilities and wholly-owned resources, Supreme is able to function as a standalone service provider with vast experience executing complex logistics operations. Supreme’s services include aviation, transportation, warehousing and distribution, base camp services, and bulk and retail fuel support.

Supreme Group, USA is the US subsidiary of Supreme. Formed in March 2009 and with headquarters in Reston Town Center, Fairfax County, Va., Supreme Group USA has already demonstrated that it is a leader in developing innovative solutions to the toughest challenges and in coordinating unparalleled logistics support for the United States military. It is a proven partner of leading American defense companies.

Supreme Group USA is proud to support the Department of Defense and is a strong advocate of the men and women of the United States armed forces. ♦

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