Q&A: Rear Admiral Michael J. Lyden
Written by Christian Sheehy
Extending the Reach of the Joint Force Commander to Distant Shores
Rear Admiral Michael J. Lyden
Commander
Naval Supply Systems Command
Rear Admiral Michael J. Lyden became commander, Naval Supply Systems Command and the 45th Chief of Supply Corps, in October 2008.
Prior to assuming his current position, Lyden was the director of supply, ordnance and logistics operations in the Office of Chief of Naval Operations (OPNAV N41). He came to OPNAV from Headquarters United States European Command, Stuttgart, Germany, where he served as the director, logistics and security assistance (ECJ4).
Lyden earned a Bachelor of Science degree in management engineering from Rensselaer Polytechnic Institute and was commissioned through the Navy ROTC program in 1978. He also earned a Master’s in Business Administration degree from Harvard University’s Graduate School of Business Administration and is a graduate of the Advanced Management Program at the Kellogg School of Management, Northwestern University.
Afloat, he served as supply officer aboard the frigate USS Valdez (FF-1096), and later as stock control officer in the initial crew of the combat stores ship USNS Sirius (T-AFS-8). Lyden completed his sea assignments as supply officer of the aircraft carrier USS Carl Vinson (CVN-70).
His shore and staff assignments include duties as supply management instructor, Navy Supply Corps School; supply and integrated logistics support analyst, program appraisal Division, office of Chief of Naval Operations (N81); executive assistant to the assistant commander for inventory and systems integrity, Naval Supply Systems Command; director, Operations Policy and Integrated Logistics Support Divisions, Naval Aviation Supply Office; supply officer, Naval Air Station Whidbey Island, Wash.; head, Spares Programs and Policy Branch, Office of Chief of Naval Operations (N41) and as deputy commander for financial management/ comptroller, Naval Supply Systems Command.
Rear Admiral Lyden was interviewed by MLF Editor Christian Sheehy.
Q: What is the history and mission of the Naval Supply Systems Command [NAVSUP]?
A: NAVSUP, headquartered in Mechanicsburg, Pa., has primary responsibility for providing supply support to U.S. Navy forces worldwide. With a diverse, worldwide civilian and military work force of more than 25,500 people, NAVSUP meets this responsibility by performing a variety of logistics services including supply operations, contracting, resale, information systems, fuel, conventional ordnance, transportation, support services and security assistance. NAVSUP sets the policies, prescribes the procedures and evaluates performance in each of these areas. NAVSUP also manages the worldwide, integrated Navy supply system, which gets the fleet what it needs, where and when it needs it.
NAVSUP’s global warfighting capability support is focused in the areas of Navy-owned spare parts and component management, waterfront support coordination, ammunition management, petroleum and transportation support coordination, ship outfitting, and central design of supporting automated systems. NAVSUP provides support services for the management of several family-oriented support functions including the Navy Exchange and Navy Lodge management, Navy clothing and textile research, food service support, household goods support and postal services.
NAVSUP is also one of the designated Navy Heads of Contracting Activities and is responsible for management of the Navy Field Contracting System, which includes more than 38 contracting activities and oversight of more than 800 purchase card programs. With contracting authority and technical policy guidance from the command, these activities annually contract for more than $8.6 billion in supplies and services, while executing more than 135,000 individual contract actions.
NAVSUP has seven fleet and industrial supply centers [FISCs] located in Norfolk, Va.; Jacksonville, Fla.; San Diego, Calif.; Puget Sound, Wash.; Pearl Harbor, Hawaii; Yokosuka, Japan; and Sigonella, Italy. The FISCs provide a variety of logistics support services and products to Navy and other military customers in their respective regions. These products and services include material management, contracting, transportation, fuel services, customer service, hazardous materials management, household goods movement support, consolidated mail services and supply consultation. NAVSUP’s Naval Inventory Control Point, consisting of two sites in Mechanicsburg and Philadelphia, Pa., exercises centralized control more than 350,000 different line items of repair parts, components and assemblies that keep ships, aircraft and weapons operating. NAVICP also provides logistics and supply assistance to friendly and allied nations through the Foreign Military Sales program.
The Navy Exchange Service Command [NEXCOM], headquartered in Virginia Beach, Va., oversees 107 Navy Exchange facilities and its 344 stores worldwide; 45 Navy Lodges; Ship’s Stores; Uniform Program Management Office; and Navy family support programs. NEXCOM’s mission is to provide authorized customers quality goods and services at a savings and to support quality-of-life programs for active duty military, retirees, reservists and their families. Revenues generated are used to support Morale, Welfare, and Recreation [MWR] programs. Sales of more than $2.5 billion were generated in FY 2006 with more than $40 million in profits provided to Navy MWR programs. Since its establishment in 1946, more than $2.2 billion in profits has contributed to Navy MWR programs.
NAVSUP provides information systems support through its Navy Supply Information Systems Activity [NAVSISA]. NAVSISA is the Navy’s premier Central Design Agency with responsibility to design, develop and maintain information systems supporting numerous shore activities in the functional areas of logistics, transportation, finance and accounting, and inventory math modeling.
The Naval Operational Logistics Support Center [NOLSC] serves as the focal point for enhancing operational commanders’ material readiness by providing innovative solutions to logistical challenges. NOLSC is NAVSUP’s supply chain manager and service provider for transportation, petroleum and ordnance logistics services for the Navy, Marine Corps, Joint and coalition forces. NOLSC combines the functions of naval petroleum, transportation and ammunition to provide a comprehensive operational logistics support command.
Q: What does your job entail as commander, NAVSUP?
A: As the NAVSUP commander, I serve as the Navy champion for our global logistics support network, including the worldwide, integrated Navy supply system. I can’t understate the strategic importance of this—the Global Navy required by the Navy’s Maritime Strategy demands Global Logistics. With our leadership team, I ensure the NAVSUP enterprise effectively executes its mission to fully support the warfighter with products and services that deliver combat capability through logistics around the globe, wherever our forces are operating.
Concurrent with this is the need to lead NAVSUP’s transformation for the future. We must remain agile and forward-leaning to ensure the Navy’s logistics systems adapt rapidly to support new and evolving missions, weapons systems and operational concepts the Navy adopts. Focusing the enterprise on transformation—most notably, our implementation of ERP—is a critical role for me. Finally, I concurrently serve as chief of Supply Corps. In this capacity I lead the Navy supply community. This elite community of officers and enlisted execute key roles in supply chain management, expeditionary logistics, financial management, contracting, information systems, operations analysis, fuels and ordnance management, food service and physical distribution, across the Navy.
Q: What are your focus areas and goals for the coming year?
A: As I prepared for my transition to NAVSUP, I met with senior leaders from across the NAVSUP enterprise to develop a short list of priorities for my first 90 days. Based on those discussions, five priority areas were identified that stand out because of their degree of urgency and their importance to our Navy mission. These priority areas are, for the most part, things we are already working on, but which require specific focus over the next few months. Three of these priorities directly support our logistics transformation:
ERP 1.1 Single Supply Solution. Implementation of Navy Enterprise Resource Planning [ERP] is the most significant transformational effort we have under way. The NAVSUP team has already done a superb job implementing ERP Release 1.0 for finance and acquisition. Release 1.1, scheduled for February 2010, will bring Navy’s wholesale and retail supply functions—the core of the Navy Supply System—into ERP.
The Single Supply Solution is a game changing event for NAVSUP and our support to the Navy Enterprise. It is our future! The design is complete and our near-term objective is to ensure the NAVSUP enterprise and its external stakeholders have a clear understanding of the functionality, business processes, and end-to-end design including interfaces with external systems and organizations, and are fully ready to begin testing in February 2009.
Operational Alignment. NAVSUP has done an extraordinary job aligning with the aviation, surface, subsurface, expeditionary and net warfare enterprises. Our next step will be to better align NAVSUP Enterprise support to fleet areas of responsibility around the globe. A key first step will be to designate a single NAVSUP point of contact for each numbered fleet. This POC will coordinate requirements for the theater across the NAVSUP enterprise.
Operational Force Logistics IT Strategic Blueprint. NAVSUP has been a leader in afloat logistics IT; however, our naval forces now extend beyond afloat to a broader range of operational units. Our logistics IT solutions must work for these expeditionary units as well. While Navy ERP will replace our primary supply system, we must ensure we have a robust portfolio of complementary IT systems for the operational forces. Within 90 days NAVSUP will finalize an operational force logistics IT strategic blueprint that integrates operational force requirements and systems with Navy ERP and the supporting shore infrastructure to ensure a seamless overall support construct. This blueprint will inform future programming efforts for logistics IT.
Again, these three specific priorities represent areas that have specific short-term deliverables. Follow-on actions in these priority areas, as well as the remainder of broader NAVSUP strategic objectives, will be captured in our commander’s guidance for 2009, which will be published in January.
The Commander’s Guidance is NAVSUP’s strategic plan for the calendar year and aligns our priorities directly with the 2009 Chief of Naval Operations’ [CNO] guidance.
Q: What are a few of the big challenges facing NAVSUP and the initiatives addressing these challenges?
A: One of the biggest challenges facing NAVSUP is the replacement of our existing IT systems that date from the 1960s and 1970s. These systems tie us to outdated business processes, severely limit our agility, have minimal technical support, and drive unaffordable operating costs.
NAVSUP took the first step forward in October 2008 when we went live with the first phase of Navy enterprise resource planning implementation for finance and acquisition [Release 1.0]. We are actively working our next step; in February 2010 we will go live with Navy ERP Release 1.1 and initiate a phased implementation across the enterprise that will be complete in 2012.
As I mentioned, this is a significant undertaking across the NAVSUP Enterprise and has tremendous implications for the way we conduct business. Our ERP 1.1 implementation will play the key role in delivering this future enterprise business system. The integrated business management system inherent in ERP will transform Navy business operations, provide unprecedented management visibility across the enterprise, increase our business effectiveness, and provide savings to NAVSUP and our customers.
Another challenge NAVSUP is attacking head-on is the need to reduce Navy operating costs to free up resources for investment in future Navy force structure. NAVSUP’s continuous process improvement [CPI] initiative uses the principles of Lean Six Sigma to examine our business processes and to look for areas that could benefit from improved processes and provide savings. In particular, we are using CPI to support Navy Enterprise initiatives to reduce the total ownership cost [TOC] across the full life cycle of weapons systems.
Finally, the implementation of NAVSUP’s Global Logistics Support Strategy [GLSS] is a critical element to success of Navy’s Maritime Strategy. GLSS projects logistics support to Navy and joint warfighters through a global logistics network that seamlessly integrates afloat and shore infrastructure. Through standardization of processes we will be able to deliver maximum efficiency to the fleet. Included in this is a critical assessment of our organizational and functional alignment with the dual objectives of optimizing delivery of logistics support and providing a single face to our operational customers.
Q: How has NAVSUP worked toward partnering with private sector companies in streamlining acquisition across the Navy and other military branches?
A: NAVSUP is among the leaders in awarding performance based logistics [PBL] contracts in DoD. In FY 2008, more than 24 percent of Navy’s aviation and maritime demand was satisfied via PBL arrangements.
A major part of the PBL strategy is encompassed in PBL partnerships between the Navy and industry. More than 70 percent of the approximately $1.1 billion obligated on PBL contracts in FY 2008 was used to fund partnership arrangements. In a PBL partnership, the Navy contracts with industry; industry in turn places commercial services agreements [CSAs] with Navy depots for all or a substantial portion of the touch labor required to meet contractual performance metrics. PBL partnerships foster a teaming relationship between government and industry that results in a sharing of best business practices and a leaning out of processes at the depots. Partnerships are a cost-effective means of encouraging reliability improvements, reducing turn-around times and inventory requirements, and maintaining a competitive edge.
Q: What are some of the big successes NAVSUP has had recently?
A: In October 2008 the NAVSUP Enterprise successfully implemented Navy ERP Release 1.0. NAVSUP’s work force accepted the challenge head-on, aggressively completing online and classroom training modules and embracing the change management philosophy necessary to change many of our financial and procurement practices. Even though ERP Release 1.0 was successful, our true test will be our ability to successfully re-tool the Navy’s supply system in ERP Release 1.1.
NAVSUP performance based logistics contracts continue to be extraordinarily successful in providing the support Navy needs in a performance-based construct at the best cost. PBL contractual metrics link directly to higher-level warfighter requirements, sometimes identified via a performance based agreement [PBA].
Specific PBL partnership successes include the auxiliary power unit [APU] contract with Honeywell and the F404 Engine contract with General Electric. The APU contract is a partnership with Fleet Readiness Center [FRC] East Cherry Point. Material availability has improved from 65 percent to 95 percent, backorders were eliminated, response times were reduced from 35 to 5 days, and repair turn-around times [RTATs] were cut from 162 to 38 days. Further, Honeywell and the depot worked together to lean out processes. Labor hours per unit were reduced by 47 percent, and more than 30 configuration changes improving reliability and resolving obsolescence issues were incorporated.
With the F404 partnership Navy had comparable success. The initiative reduced backorders from more than 700 to 35, increased material availability from 43 percent to 90 percent, cut RTAT by 25 percent, and reduced work in process by 75 percent. Leaning of the repair processes resulted in increased component life, reduced vibration- related field rejects, and matching of life-limited components.
Q: How is NAVSUP helping to transform logistics processes in the Navy and the Department of Defense?
A: Our implementation of the Navy ERP system to support a single supply solution will transform Navy logistics and serve as a benchmark for the Department of Defense.
A second focus area is our close partnership with the Defense Logistics Agency [DLA]. While we have several key initiatives under way together, our initiative to divest most of NAVSUP’s remaining warehouse operations to DLA is an outstanding example of optimizing logistics processes in DoD. This effort will deliver a template and conops that other services can follow to fully leverage DLA warehousing expertise and capacity.
Naval logistics integration [NLI] is another key transformation initiative that has advanced the success of support to naval expeditionary forces both afloat and ashore. In partnership, the Navy and Marine Corps are working to leverage each service’s core strengths, share best practice processes and technologies, and continually improve our combined naval logistics support capabilities. A key element of NLI is integrated Marine Corps and Navy logistics doctrine and training. This same model can be used to exploit synergies between all the services.
Q: How is NAVSUP helping to project the logistics arm of the Navy across the global stage?
A: NAVSUP’s Global Logistics Support Strategy outlines the Navy’s road map for Global Logistics to support our Global Navy. The strategy integrates a robust, adaptive logistics network with missionspecific concepts of operation, targeted pre-positioned materials, and a comprehensive catalog of “on call” Navy logistics capabilities. In addition it promotes broad teaming with interagency [IA], non-government organizations [NGOs] and host nation partners to increase overall capacity. The result: the capability to successfully project our logistics capability worldwide.
This projection of Global logistics has been clearly demonstrated in our support to humanitarian assistance and disaster response [HA/DR] missions. NAVSUP has been a core player in Navy’s HA/DR efforts throughout the world and at home.
Additionally, our support of operational forces engaged in the global war on terrorism requires our logistics to be integrated with our coalition partners. NAVSUP is working with several allied nations to share operational concepts and processes.
Q: What are some of the big future challenges facing NAVSUP and how is the organization addressing those today?
A: Navy logistics must transform from an independent, Navycentric logistics system supporting primarily a blue-water Navy to a global logistics network supporting the full spectrum of operational missions—from major combat operations [MCO] to theater security cooperation [TSC] to humanitarian assistance and disaster relief. Integral to this will be the capability and agility to seamlessly integrate with logistics capabilities in other services and coalition partners. The end result must be an integrated logistics support solution to joint warfighting commanders.
NAVSUP is addressing this challenge with rapid roll-out of our comprehensive Global Logistics Support Strategy, accelerated teaming with other services and coalition partners, and a strengthening of NAVSUP’s alignment to the operational forces, particularly the Navy component commands within each AOR. Also, our Navy Supply Corps has become embedded throughout the joint logistics arena. The Supply Corps is building tomorrow’s premier joint logisticians, who will be able to effectively design and lead this global logistics network in the future. ♦