Improving Materiel Visibility

Written by Dawn S. Onley

BTA’s enterprise standards promote integrated logistics systems and push department closer to uniform tracking and deployments.

Each military service runs its own supply chain systems and has its own processes for placing orders and moving inventory to warfighters. But over the past two decades, each has struggled, with moderate success, to transform age-old logistics capabilities. During this time period, government oversight groups have issued countless reports criticizing the Department of Defense and its services and agencies for a deluge of logistics management challenges, ranging from an inadequate supply of spare parts and backlogged cargo shipments to an inability to track shipments at the distribution centers.

“Since the 1990s, we have identified DoD’s supply chain management as a high-risk area because of high inventory levels and a supply system that was not responsive to the needs of the warfighter,” said William M. Solis, director of Defense Capabilities and Management for the Government Accountability Office, in an April 2005 report.

More recently, this picture is showing signs of improvement.

Since the establishment of the DoD Business Transformation Agency (BTA) in October 2005, logistics has received increased visibility across the senior ranks of DoD. For example, the 2006 Quadrennial Defense Review (QDR) featured a section on supply chain logistics management, which focused on improving visibility into supply chain logistics costs and performance. In the 2006 review, former Defense Secretary Donald Rumsfeld outlined the logistics improvements made since the 2001 QDR.

“In the past four years, the department has markedly increased the integration of field exercises and experimentation with the processes for determining logistics systems, doctrine and force structure requirements. In addition, the department is changing its logistics processes and procedures as dictated by the needs of current operations,” Rumsfeld wrote. “The department has made significant strides in migrating to a capabilities-based logistics approach.”

Part of that success can be attributed to the high-level inclusion of materiel visibility as one of six key business enterprise priorities in the BTA. The others include personnel, acquisition, common supplier engagement, real property and financial visibility. With materiel visibility, BTA is aiming to transform DoD’s supply chain information environment by:

• Improving data integrity and visibility
  
• Improving process efficiency of shipping, receiving and inventory management by enabling hands-off processing of materiel transactions
  
• Improving logistics planning, forecasting and replenishment activities by increases collaboration between all levels of the department
• Uniquely identify property and materiel to improve the time and flow of materiel in support of deployed forces

BTA has found the key to supply chain improvement its standards.

The agency is overseeing a more coordinated effort to reign in the thousands of disparate business systems, across its six priority areas, and replace them with a core group of joint, interoperable systems. BTA is establishing enterprisewide standards that will govern the development, design and deployment of these logistics programs across the department. Those standards are consistent with the supply chain operations reference (SCOR) model, a management tool that was developed and endorsed by the Supply Chain Council as the cross-industry standard for supply chain management.

“We’re not trying to reinvent something with our own standards,” said David Fisher, director of BTA. “Our mission is to work with the functional owners on enterprise-level requirements.”

In a recent release, General Norton A. Schwartz, commander of the United States Transportation Command, also touched on the benefits of deploying enterprisewide standards. “Our focus is on improving the efficiency and interoperability of the Defense’s distribution activities associated with deploying, sustaining and redeploying our forces and equipment during peace and war,” Schwartz said. “The application of the supply chain operations reference model has definitely helped us effect change toward improving our warfighting capabilities.”

While BTA’s role is more of an oversight one, the Defense Logistics Agency and Transportation Command are charged with doing more of the operational work in getting the joint logistics systems deployed in the Army, Navy, Air Force, and with DLA, TRANSCOM and MHS. Some of those joint systems include DLA’s business systems modernization enterprise resource planning (ERP) system and Integrated Data Environment initiative and TRANSCOM’s Agile Transportation for the 21st Century (AT21) and Joint Deployment and Distribution Enterprise initiatives.

“At OSD, we don’t execute a supply chain. This is done within the components at DLA and TRANSCOM. DLA and TRANSCOM are building out the operational details to execute the supply chain,” Fisher said.

Fisher said BTA’s job is to work with DLA and TRANSCOM on an enterprise level, nailing down requirements. “What are those things that the enterprise has decided needs to be standardized?” Fisher said the department was on great footing with DLA and TRANSCOM leading the enterprise operational mission of joint logistics system development and deployment and added that TRANSCOM’s architecture “is probably the most robust we have in the whole department.”

“They’ve done an excellent job of working their architecture within the organization’s alignment,” Fisher added.

As a testament to that work, the Supply Chain Council awarded TRANSCOM the Global Award for Supply Chain Excellence and the Award for Supply Chain Operational Excellence on March 21. The award recognized the work TRANSCOM put into designing, developing and offering support to the Joint Deployment and Distribution Architecture. TRANSCOM’s Architecture Division, located in the Command, Control, Communications and Computer Systems Directorate, was credited for its work in redesigning the command’s operational architecture “to provide better understanding of operational processes while also highlighting the interrelationships between various organizations involved in the broader supply chain,” according to the TRANSCOM release.

The Supply Chain Council is an international, not-for-profit industry association that established the SCOR Model.

SCOR has helped the department set and adhere to a common group of standards, Fisher said. “We set the common standards that everything needs to comply with. We help ensure we have alignment and make sure standards are being executed in actual deployments,” Fisher said. One of those departmentwide standards is the implementation of the item unique identification (IUID) registry, where personal property items would be uniquely identified, allowing officials to better record information on the location, movement and status of equipment, materiel and supplies. The registry would keep tabs of items from multiple information systems through globally unique ubiquitous identifiers, which would give the military services, agencies and Department of Defense system visibility of an item regardless of the system platform where that information is contained and regardless of the owner of the information.

Some key logistics systems and initiatives that the BTA is pushing across the department are the Logistics Master Data (LMD) program, radio frequency identification (RFID), and the transition from military standards to commercially-based EDI or XML standards. LMD is a program that establishes a single integration point for item, vendor and customer data. There are currently 10 different sources across the department that handles this information. LMD would be a single conduit for these 10 sources to retrieve item, vendor and customer data to promote better planning, procurement, distribution, transportation and disposition of items.

RFID technology is being implemented across DoD in a phased approach. In 2005, RFID tagging became a requirement for DoD manufacturers and suppliers who held new contracts. This year, the DoD requirement for RFID will expand to include the ability to read/write passive RFID at all CONUS DLA distribution centers, and officials are evaluating the time frame to begin tagging at the unit pack level.

Although GAO still has some concerns, it is also noticing some improvements.

“DoD’s success in improving supply chain management is closely linked with its defense business transformation efforts and completion of a comprehensive, integrated logistics strategy,” said Solis in a January 2007 report to the Senate Subcommittee on Oversight of Government Management, the Federal Workforce, and the District of Columbia, Committee on Homeland Security and Governmental Affairs. Solis found that DoD had taken a number of positive steps to improve supply chain management, but said more work is still needed.

According to the GAO report, the defense department has been developing a strategy called the “To Be” logistics roadmap. The strategy is intended to guide logistics programs and initiatives across the department. “The strategy would identify the scope of logistics problems and capability gaps to be addressed and include specific performance goals, programs, milestones and metrics.”

Solis said DoD had not set a date to complete the roadmap. Defense officials said its completion depends on the results of the department’s ongoing test of new concepts for managing logistics capabilities. But until that roadmap is established, Solis wrote in the report: “decision makers will lack the means to effectively guide logistics efforts, including supply chain management, and the ability to determine if these efforts are achieving desired results.”

DoD agreed with the need to complete the logistics strategy and develop and implement outcome-focused performance and cost metrics for supply chain management.

“The DoD logistics strategy is underway and is aligned with other defense business transformation efforts, including the Enterprise Transition Plan,” said Jack Bell, deputy undersecretary of defense for logistics and materiel readiness, in DoD’s response to GAO’s recommendations. Bell said his office and the Joint Staff are working on a logistics portfolio test case.

“This test case will ensure the appropriate capabilities are considered in completion of the logistics strategy,” Bell said. “The test case is estimated to be completed in the spring 2007 and the logistics strategy has an estimated completion date of six months after completion of the test case.” ♦