Q&A: Lieutenant General Robert T. Dail
LOGISTICS STEWARD:
Extending the Logistics Enterprise
Lieutenant General Robert T. Dail
United States Army
Director of the Defense Logistics Agency
Lieutenant General Robert T. Dail has commanded logistics and transportation units at every level, from platoon to corps, across the full range of Army combat capabilities. He also has experience in operational and strategic level logistics.
Prior to joining DLA, Dail was the deputy commander of United States Transportation Command, Scott Air Force Base, Ill.
His operational commands include the Division Support Command, 82nd Airborne Division, Fort Bragg, N.C.; the 324th Support Battalion (Forward), 24th Infantry Division (Mechanized), Fort Benning, Ga.; the 598th Transportation Company (Medium Truck), 37th Transportation Group, Mannheim, Germany; and the 309th Transportation Company (Heavy Amphibian), 7th Transportation Group, Fort Eustis, Va. Dail was a charter member of the 75th Ranger Regiment Headquarters staff, serving as the first movement control officer and later as regimental S4. He also served tours as special assistant to the chief of staff, United States Army; and executive assistant to the deputy chief of staff for logistics, United States Army, the Pentagon.
His early years included duty as a platoon leader, company executive officer; and battalion staff officer at Fort Story, Va.; and duty as a major in the 24th Infantry Division (Mechanized), Fort Stewart, Ga., including assignment as S3, 24th Infantry Division Support Command during Operations Desert Shield and Desert Storm.
Dail graduated from the University of Richmond in 1975 with a Bachelor of Science degree in business administration. He also holds master’s degrees from Boston University, the National Defense University, and the United States Army Command and General Staff College. His military education includes the transportation officers’ basic and advanced courses, the United States Army Command and General Staff College, School of Advanced Military Studies and the Industrial College of the Armed Forces.
His awards and decorations include the Distinguished Service Medal, Defense Superior Service Medal, the Legion of Merit, the Bronze Star Medal, the Meritorious Service Medal, the Army Commendation Medal, the Army Achievement Medal, the Ranger Tab, the Master Parachutist Badge, the Australian Parachutist Badge and the Army Staff Identification Badge.
Dail was interviewed by Dawn S. Onley, MLF editor.
Q: What are your focus areas and goals this year?
A: When I was assigned as the director of Defense Logistics Agency, I established four focus areas that guide all of our efforts. The first and always our foremost focus is on the warfighter—all that goes into providing warfighter support, including managing our eight supply chains and managing our supplier network. Wherever I go, our customers, the military services, want DLA to take on more of the logistics mission for them. They don’t want to duplicate our efforts and they don’t want to use their working capital to pay for things that DLA can do for them, whether it’s overseas or in the continental United States.
The next focus area is leadership. We provide the leadership that our professionals deserve to enable and empower them. We share our expertise throughout DoD to lead transformation and provide logistics solutions through our integrated supply chains. And while doing that, we must continually improve processes to reduce cost, increase logistics capability and link our customers’ demand with our supply chains.
I listed learning and growth as a focus area to constantly remind us that we need a diverse, enabled, empowered and motivated work force to provide supply chain excellence and warfighter support.
The fourth focus area is stewardship. We must manage DLA resources for best customer value. The military services and the American people deserve nothing less.
Supporting these focus areas are five priorities for 2008. They are warfighter support, Base Realignment and Closure [BRAC] 2005, Joint Regional Inventory and Material Management, and two priorities that we have partnered with the U.S. Transportation Command to implement—Defense Transportation Coordination Initiative and Integrated Data Environment/Global Transportation Network Convergence.
These will all support the agency’s vision to extend the enterprise forward—linking warfighter demand with the DLA supplier network.
Q: What is DLA doing to “extend the enterprise” farther forward in the supply chain?
A: DLA has identified three strategic thrusts to achieve this vision, each designed to move the agency beyond its traditional wholesaler responsibilities.
Extend the Enterprise—DLA resources will geographically align with supported activities far more than today. While agency supply and distribution centers will remain activity hubs, DLA employees, inventories and logistics capabilities will be located forward, beyond traditional agency borders to capitalize on best value opportunities to improve warfighter readiness. This will allow DLA to extend processes, capabilities and effects deeper into customer and supplier operations, as well as expand business operations through BRAC efforts.
Connect Warfighter Demand with Supply—DLA will transform the DoD demand planning capabilities and the processing of demand signals throughout the supply chain, placing demand-planning capabilities from DLA’s Enterprise Business System at the respective production and operational force locations. Building on the agency’s recent evolution from managing supplies to managing suppliers, DLA will establish and manage seamless business process links between the services’ materiel requirements and the source of their materiel—the American industrial base. This will enable DLA to improve forecast accuracy through collaboration, improving supplier performance and reducing delivery time to the customer through collaborative supply planning and strategic material sourcing.
Deliver Supply Chain Excellence—Recognizing that warfighter support diminishes if a supply chain fails to perform, DLA will forge end-to-end logistics solutions that strike the targeted balance between effectiveness, agility, reliability, speed, visibility and cost. DLA stewardship responsibilities extend beyond the agency to effective and efficient logistics processes for the entire DoD enterprise. In every case, DLA will exercise responsible leadership by proactively collaborating with national supply chain partners in developing solutions that best support the warfighter. This will empower DLA and develop the work force with improved tools and information.
While DLA has been working closely with the warfighters for the past decade, we will go farther forward in the future. Some examples include programs or initiatives I mentioned in my priorities.
First is Joint Regional Inventory Materiel Management, [JRIMM]. The JRIMM program is built on a couple of fundamental principles—minimizing storage sites within a region, thus reducing “touches” and handling of material and eliminating duplicate inventory.
In March 2007 DoD designated DLA as the lead in the worldwide implementation of JRIMM starting with the Pacific Command area of responsibility. PACOM participated in both a leadership role and in functional roles including participation in oversight, policy and procedures, financial, information technology and change management. DLA implementation of JRIMM includes a phased approach with Phase I moving service-owned assets to Defense Distribution Depot Pearl Harbor [Oahu, Hawaii] in October 2007. Phase II consists of ownership changing from the services to DLA during January 2008. JRIMM is the way ahead and DLA is out in front.
Next we will position our distribution depots closer to our customers. To further expand the DLA Enterprise, we will begin using current warehousing at Camp Kinser [Marine Corps base in Okinawa, Japan] to support all joint commands on Okinawa until a permanent DLA depot is established there. Creation of a permanent distribution depot on Okinawa will result in a savings of $4 million per year in transportation costs and a reduction of average customer wait time to three days rather than the average 10 or more days for material sent from the Defense Distribution Depot in San Joaquin, Calif.
Another example is also one of my top five priorities for 2008. The BRAC 2005 supply, storage and distribution recommendations created four continental United States support regions, with each having one strategic distribution platform and multiple forward distribution points. This realignment provides dedicated receiving, storing and issuing functions, solely in support of on-base military service industrial customers such as maintenance depots, shipyards and air logistics centers.
This serves to create a smoother materiel flow for all the components within a region in order to achieve inventory investment savings for the DoD. In addition, customer wait time is reduced as DLA leverages its distribution network to support timely deliveries using a concept of operations that maximizes surface transportation to meet customer requirements.
We have begun to implement BRAC 2005. We started at Warner Robins Air Logistics Center with the BRAC supply, storage and distribution consolidation mandate. In October 2007, 240 great Americans were “transferred in place” from the Air Force to DLA. In February 2008, 365 jobs transferred in place to DLA with the activation of DLA Oklahoma City, the second Air Force Materiel Command Air Logistics Center to implement the BRAC mandate. A similar transition will take place with the Ogden Air Logistics Center at Hill Air Force Base, Utah, this spring.
The BRAC decision also realigns or relocates the procurement management and related support functions for the acquisition of depot level reparables to the Defense Logistics Agency, with the goal of saving DoD money by leveraging all depot level reparables acquisitions and managing them within a single agency. Accomplishing this will not only allow DoD to present a single face to industry, but will also provide many other cost-reducing benefits to the department through more effective strategic sourcing, leveraged buying power and reduced inventory and lean processes.
People ask me what I want out of BRAC. I tell them I want to get visibility of those inventories of material at depots that, over the years, have been issued by our distribution centers to the respective services to support their production lines. Some of that material was not used due to changes in priority by maintenance managers responding to changing operational requirements. I want to see the material that is out there and integrate that into our Enterprise Business System to influence our procurement decisions at the national level. We need to take down the wall between retail and wholesale logistics.
We are also putting our personnel forward at every opportunity in every location. Today, DLA is embedded with U.S. Central Command [USCENTCOM] at every command level. Our military members and civilians work side by side with the USCENTCOM and service component staffs from the major logistics hubs to the front lines, providing critical “reach-back” capability to DLA. We are on the ground, providing logistics advice while anticipating and resolving logistics problems before they occur. Service logistics commands have integrated our capabilities into their planning procedures. We have enabled them with joint department capabilities. Again, all of these contribute to greater warfighter support.
There is another aspect to this effort as well. Extending the enterprise not only encompasses embedding personnel with our customers to better understand their requirements, but also includes translating those requirements into meaningful acquisition strategies with industry. Our extension of the enterprise with our suppliers takes shape in many forms, to include supply and process collaboration with our strategic suppliers.
Through our strategic supplier alliances [SSA] and supply chain alliances [SCA], we continuously receive feedback from our strategic business partners to constantly improve our logistics processes and to extend our partnerships to the next level of performance. We sponsor lean events with our suppliers that result in reduced lead times and processing efficiencies. We also collaborate in supply planning, linking the demand from our customer planning activities with our suppliers.
I host the annual Strategic Partners’ Conference, which will be held in March, where we bring in our SSA and SCA business partners. In this venue, I share DLA’s vision in supporting the warfighter along with the challenges we face and the successes we’ve had. We also invite senior leadership from the Office of Secretary of Defense so our strategic partners gain an opportunity to hear DoD’s perspective from the top decision-makers. We discuss the integral part our vendors play in supporting and ensuring the men and women in uniform receive the supplies they need.
DLA has transformed its information technology infrastructure and now has the capability to extend further across the supply chain. We have replaced our legacy environment — processes and systems — with an Enterprise Business System [EBS]. EBS includes our Business Systems Modernization Enterprise Resource Planning platform for supply chain management, which enables the continued transformation of DLA’s business processes. This ERP capability works closely with other aspects of our system such as customer relationship management and our Distribution Standard System to support both current needs and improved capabilities. Ultimately, it’s about how we can improve our supply chain practices to “extend the enterprise” even further.
Q: Can you talk about the establishment of the new DLA Staff Directorate—the J-7 Acquisition Management? How did this office come to be and what is its mission?
A: DLA has two essential core competencies: supply chain management and acquisition/contracting management. When I arrived, we did not have a primary staff office responsible for acquisition and contract management. Instead, acquisition management at that time was a subset of the Logistics Operations Directorate within DLA.
In order to manage and deliver the 5.2 million items we handle, we work closely with America’s industrial base to acquire supplies and services in a timely fashion. We develop and craft strategies that must be best value, suitable and effective. We needed to focus responsibility and accountability for acquisition management into a new directorate at DLA. The creation of the Acquisition Management Directorate [J-7] makes obvious the significance of acquisition to our mission in DLA and to the external customers and organizations with whom we work and support. This new alignment is essential to ensuring an acquisition system that always maintains integrity through a program of oversight, centralized policy, acquisition workforce development and continuous improvement.
To further emphasize the importance of acquisition management, we also placed senior executive service members to serve as heads of contracting activities at each of our major field activities. We have filled the positions in Defense Supply Center Philadelphia and Defense Supply Center Richmond, Va., and are in the hiring process for Defense Supply Center Columbus, Ohio, and Defense Energy Support Center, Fort Belvoir, Va., now. The addition of these key acquisition executives will further ensure acquisition integrity is maintained in the field and better align acquisition programs at the supply chains with the overarching strategy of the agency. Finally, we have established a Center for Pricing Excellence in DLA. This center will ensure that best processes produce best value for our service customers.
Q: What were some of DLA’s biggest successes over the past year? What remain some of the biggest challenges?
A: The advances we have made in extending the DLA Enterprise to better support the warfighter I spoke about before are all good examples of successes.
Another great success story was DLA’s information technology and reengineering efforts in the successful replacement of legacy materiel management systems with commercial-off-the-shelf software. I mentioned this earlier, but it bears repeating. Our Business Systems Modernization program introduced an enterprise resource planning and supply chain management system that replaced legacy systems with state-of-the-art business processes and technology linking the entire supply chain from customer to supplier. We completed this major reengineering effort in July 2007.
Future enhancements to the system, now referred to as the Enterprise Business System, will allow DLA to extend our supply chains further into the “retail” support aspects, enhance financial integrity, and begin an energy convergence initiative. Deployment of our ERP this past year also allows us to begin an initiative to replace our legacy procurement system with an ERP module we call eProcurement. All these initiatives will bring additional capabilities to our foundational system, allowing us to improve demand/supply planning, order fulfillment, procurement and financial management.
The biggest challenges are to capitalize on the added roles we have undertaken via BRAC 2005 and, in response to our customers’ desires, truly extend the enterprise as far as we can on behalf of the warfighters and maintainers. Some of these challenges are already showing signs of success.
BRAC 2005 charged DLA with the responsibility for privatizing DoD’s entire logistics process for three commodity lines: tires; chemicals, petroleum oils and lubricants; and compressed gases. This mandate has been one of our biggest challenges. Specifically, the BRAC statute requires that DoD disestablish the supply, storage and distribution functions previously performed by the government and rely on private industry to perform them. In executing this mandate, DLA assumed responsibility from the military services and awarded four privatization contracts [two for tires], each with a base period of five years and an available five-year option, as follows:
Land Tires: Awarded to Michelin North America January 25, 2007, a requirements contract with an estimated value of $1.66 billion over 10 years, with full implementation achieved in November 2007.
Aircraft Tires: Awarded to Michelin Aircraft December 29, 2006, a requirements contract with estimated value of $720 million over 10 years, with full implementation achieved in October 2007.
Compressed Gases and Cylinders: Awarded to Haas TCM April 30, 2007, maximum value $2 billion over 10 years, with full implementation scheduled for May 2009.
Chemicals and Packaged Petroleum, Oils and Lubricants: Awarded to SAIC May 2, 2007, maximum value $6.25 billion over 10v years, with full implementation in May 2009.
Additionally, in July 2007, DLA modified the land tire contract to add a tire not previously covered that was required in support of the mine resistant ambush protected [MRAP] vehicle. DLA also authorized the MRAP original equipment manufacturers to order tires under its contract in order to ensure that production of the vehicles would not be impacted by a shortage of tires.
Other challenges where we are making great progress include the DLA and U.S. Transportation Command partnership initiatives including the Defense Transportation Coordination Initiative and the Integrated Data Environment/Global Transportation Network Convergence initiative.
Through DTCI, USTRANSCOM will move continental U.S. military government freight and equipment from DLA distribution centers to our customers using a third party logistics transportation provider. In August 2007, a contract was awarded to Menlo Worldwide Government Services to perform those functions. The Defense Distribution Center has done a great job of planning ahead and coordinating with the program management office at Scott Air Force Base. I’m certain it’s going to be an overwhelming success. It should lower the services’ cost and substantially improve distribution efficiency. I’ve been very proud of the way the Defense Distribution Center employees in places like San Joaquin, San Diego, Oklahoma City, and New Cumberland have embraced this great partnership with USTRANSCOM.
The Integrated Data Environment/Global Transportation Network [IDE/GTN] Convergence initiative is another joint partnership between USTRANSCOM and DLA that involves the convergence of in-transit and asset visibility information. In partnership with USTRANSCOM and DISA, we delivered the first capability under IDE/GTN Convergence, where mission-critical applications are being hosted on a Defense Information Systems Agency portal, providing a single sign-on and common operating picture for deployment and distribution, all using DLA’s service-oriented architecture.
We want to put this information into the hands of warfighters. It will allow them to log on to a global support network where the asset and in-transit visibility data is integrated so they can make informed tactical decisions. Today, for the first time, we can sit in places like USTRANSCOM and DLA and our distribution depots and track the performance, in real time, of our national motor carriers and how well they are moving material from our warehouses out to supported locations. IDE/GTN is about empowering the work force and our customers to get solutions, get data and solve problems.
Node Management and Deployable Depot [NoMaDD] is a capability that many of you may just be beginning to hear about. A chief concern of senior logisticians and the warfighter has been the lack of a deployable joint theater distribution capability. Early entry Theater Distribution Center capability has been ad hoc or improvised at best over the past decade. Under the oversight of the under secretary of Defense, Acquisition Technology & Logistics, and the sponsorship of USTRANSCOM and United States Pacific Command, NoMaDD is in its third year of an advanced concept technology demonstration. [ACTD] The Deployable Distribution Center [DDXX] concept will be assessed during its joint military utility assessment in Okinawa, Japan, from March 24 to April 16. We expect this initial capability in Okinawa to continue to perform well and transition to a full capability over the next few years. Through this development process we are creating a deployable distribution center model for the future that will link DLA closer to the warfighter.
Q: What do you think people might find surprising about DLA either in its mission or the way it conducts business?
A: I think first is just the sheer magnitude of the mission. The Defense Logistics Agency is DoD’s only logistics combat support agency. We manage more than 5.2 million items supporting over 1,300 air, land and maritime weapons systems—eight separate supply chains. We process more than 50,000 requisitions and make more than 8,000 contract actions each day. We will provide nearly $35 billion worth of supplies and services to the military services and our other customers this year. If you were to put DLA on the Fortune 500, at approximately $35 billion in annual business value, it would be Number 59, right up there with Caterpillar, Motorola, Lockheed Martin and Sprint Nextel.
What also surprises many is the breadth and depth of the supply chains we support, ranging from weapons systems spares, to food, clothing and textile, petroleum, construction, medical supplies, pharmaceuticals, etc. All of the food, clothing, medical equipment and fuel, and most of the repair parts and general construction material used by Army, Navy, Air Force and Marine Corps personnel come from DLA.
We say “If America’s forces eat it, wear it, apply it, maintain equipment with it, or burn it as fuel, DLA probably provides it.”
Another thing I think surprises people is how we go about meeting these mission needs. We are no longer amassing vast inventories at rear echelons, based on past demand history, to try to replenish customers who often had lots of their own stocks too. Now we establish sources of supply to meet customers’ needs wherever they are so that both our customers and DLA can minimize inventories and are as agile as possible in how we do business. Thus, we are much like a supply chain in industry. We use best business practices that are often enabled by commercial software, including direct collaboration with our customers to assess future demand. And, because our customers don’t want to hold inventory, we are increasingly reliant on direct delivery to customers by our suppliers based on long-term contracts.
Q: How are technologies assisting DLA in transforming supply chain processes and what are some of these technologies?
A: DLA has been transforming for years and technology has been a key enabler of this process. We have implemented a portfolio of modernized systems that are critical to our success to date and our plans to further extend DLA’s capabilities forward. These systems enable DLA to use the best public and private sector practices to fulfill its mission. This portfolio includes several key elements:
Enterprise Business System: The EBS, essentially our enterprise resource planning platform for supply chain management, was developed and introduced into DLA operations through the Business Systems Modernization program. BSM incorporates enterprise resource planning and JDA/Manugistics software suites. These capabilities provide integrated financial, procurement, technical/quality, order fulfillment, product data management, and supply planning and collaboration capabilities. Together with a contract-writing capability we are developing, we are completing a world-class, fully integrated supply chain and financial management solution.
Integrated Data Environment [IDE]: We also recognized the need for a capability to share and integrate timely logistics data; systemically and broadly improve the quality of that data; reduce cycle times in fulfilling data requirements; and facilitate the ability to improve business processes. IDE is addressing these requirements as a service-oriented architecture for the brokering and discovery of DLA data and data services.
IDE/Global Transportation Network Convergence: This is fundamental to our enterprise data capability and will help resolve DoD-wide gaps in integrated, networked, end-to-end asset visibility, deployment, and distribution capabilities.
DLA’s enterprise infrastructure IT capability is based on DoD’s Global Information Grid principles and is in partnership with the Defense Information Systems Agency in key elements, such as data center operations and networking.
As our Enterprise Business System continues to evolve, expansion of the capabilities and benefits introduced under the Business Systems Modernization program will be added through investments such as the Enterprise Operational Accounting System, eProcurement, Energy Convergence, and the Retail Integration efforts required by BRAC.
Q: You mentioned a year ago that you are shifting DLA from wholesale supply and acquisition processes to a full supply chain and end-to-end acquisition process. How is that work coming along and what does it entail?
A: DLA is constantly working with the services to improve wholesale supply and the end-to-end acquisition process. This entails transforming the ways we’ve done business in the past.
For example, Hesco Bastion barriers have been widely used in Southwest Asia under a sole-source arrangement. DLA needed to establish an open and competitive process for barriers, to get some competition, improve the price, and improve the responsiveness to the customer. DLA, as the executive agent for Class IV [construction materials], took the lead for this effort. We developed a performance specification for “expeditionary earth-filled protective barriers,” which replaced the sole source Hesco Bastions. Price was improved, responsiveness was improved, and our supply posture was improved. The task was completed in less than three months.
Another successful example is in the military clothing area. We faced issues of less than 100 percent fill rates at the new recruit clothing initial induction points for all of the services. These points are run by the services in conjunction with the Installation Management Command [IMCOM]. We’ve been working Lean Six Sigma exercises with the services and IMCOM to improve the process. We’re looking at the overall end-to-end process and not just those processes belonging to DLA. We’re improving the forecasting, the inventory control process, the systems that track what’s on the shelves and replenishment rates. These areas are not normal DLA operations but we have a responsibility to assist the customer even in non-traditional areas and improve the end–to-end acquisition process. Some of these improvements have resulted in improved fill rates, allowing more recruits to get 100 percent fill the first time through in all stages of the induction process.
In the subsistence arena, we’re developing the Common Food Management System. CFMS will enable DLA to forge end-to-end logistics support for Class I [subsistence] items by providing a common solution to retail food management and a seamless link to our Enterprise Business System. DLA, along with the services, realized the need to replace obsolete individual service feeding systems. CFMS will provide a secure and fiscally compliant system to meet the food management needs of our customers. This pilot program is scheduled to begin this summer.
Q: How does DLA work/partner with industry and bring their best of breed logistics technologies to the logistics warfighter?
A: This can be answered on several levels. One is how we ensure best of breed technology is incorporated as appropriate for the items we obtain for use by the warfighters. I’ll address that in a moment. But first I want to note how we stay on top of developments regarding technologies used by logisticians themselves in support of the warfighter.
We do this in several ways. One that I have already discussed is by modernizing our key IT systems to capitalize on best of breed commercial software, and their embedded business practices, in our Enterprise Business System. As we continue transforming by enhancing and expanding the EBS, we will continue this approach.
Another is that we are actively engaged with various organizations that provide insight into technological developments and capabilities, including advice concerning who is best of breed in various aspects of IT, especially those most directly related to logistics and supply chain support.
In addition we participate in various DoD and industry events and association gatherings that expose us to current and potential technology developments.
And we also seek out information from various commercial supply chain practitioners regarding innovative ways to perform our mission, which often involves potential technology solutions. ♦