DLA Strategic Programs and BRAC Transformation
Written by Bill Budden
Overall for the Department of Defense, BRAC 2005 Supply and Storage is the catalyst for unprecedented transformation in its defense logistics enterprise that moves DoD closer to having an integrated, end-to-end supply chain. BRAC Supply and Storage covers procurement management; item management; and supply, storage and distribution operations.
The tailored agreements reached between each military service and DLA to implement the BRAC changes represent a great deal of collaboration. Successful implementation planning and then execution of BRAC legislation requires a willingness of the military services and DLA to rise to the challenge of overcoming the status quo.
We have to be forward-looking, flexible and agile as we adapt to meet the logistics needs of DoD and strive to exceed the expectations of warfighters and maintainers. Military service personnel and DLA employees alike are being challenged to take their respective skills and capabilities, and focus on better alignment and support to the warfighter as we work to create this integrated, end-to-end supply chain operation.
BENEFITS TO CUSTOMERS AND DOD
DLA’s point of sale in the supply, storage and distribution arena has moved. Pre-BRAC, DLA’s customer was the supply shop at the military service depot maintenance industrial site. Post-BRAC, DLA’s customer is the consumer on the maintenance production line.
Overall, we expect that customers will see improved service and support. For example, warfighters should see reduced lead times due to strategic long-term contracts negotiated with suppliers as a result of combined DLR and consumable buying power. In addition, as a result of the SS&D changes, customers should see improved speed, accuracy, reliability of response and enhanced surge capability to respond to warfighter needs in times of emergency.
The DLR and SS&D transfers are allowing DoD to take advantage of synergies across DLA and the military services to eliminate redundant operations by consolidating similar activities. BRAC SS&D creates the opportunity for DLA to reduce stockage, eliminate excess covered storage capacity, and provide in-transit cargo visibility beyond what was done before. Fewer handoffs in the process create an even tighter connection between warfighter demand and supply. This means that DLA can focus on its core SS&D competencies while the services focus on effective maintenance and war fighting.
BRAC DLR procurement and consumable item management changes are enabling DOD to leverage buying power with suppliers across all services. Better pricing, reduced lead times, and improved supplier performance—these are all examples of how DoD benefits.
REMOVING LAYERS
BRAC Supply and Storage is extending DLA’s mission, moving the agency closer to becoming an end-to-end supply chain provider for repair parts. With commodities such as energy, medical and subsistence, DLA has previously replaced distinct wholesale and retail inventories with a national inventory managed in a more integrated manner.
Historically, there have been layers of support between DLA and the final materiel users. By bringing skills and expertise from the military services into DLA, these layers and handoffs are streamlined to create a more effective and efficient operation. Military service employees joining DLA will provide logistics support that more closely meets warfighter needs and more tightly connects warfighter demand with supply.
VIEW TOWARD ENTERPRISE
DLA is adjusting its business processes, policies, systems and metrics to enable the agency to fill its extended role of DoD supply chain provider. We are putting more emphasis on leveraging vendor capabilities and monitoring vendor performance.
We are also putting greater emphasis on acquisition, including how we write contracts.
To support the BRAC SS&D and DLR recommendations, several interrelated process and systems change efforts are under way to achieve supply chain integration. For example, in SS&D we are optimizing placement of inventory to ensure ontime delivery of materiel for production demands. All of these changes are being worked collaboratively with the services to ensure a joint solution that enables seamless, integrated supply chain operations.
With DLA’s expanded mission, the agency has more boots on the ground at the military service industrial customer locations, given the positions we have gained as a result of BRAC, as well as the DLA forward presence personnel like buyers and planners. DLA is working to determine the DLA organizational end state at these locations to ensure that agency personnel, and the jobs they perform, are aligned and integrated to provide optimal support to the on-site service industrial customer.
LESSONS LEARNED
Lessons learned from the DLA SS&D sites activated to date have served as a template for the other functions and manpower yet to be transferred to DLA. SS&D functions and personnel at Navy FISC Detachment supporting Fleet Readiness Center Southwest are scheduled to transfer in February 2009, followed by transfers at naval shipyards in 2009 and at Marine Corps maintenance centers in 2009 and 2010. The BRAC SS&D functional transfers at Army maintenance depots will be implemented last.
In terms of the distribution network reconfiguration, the BRAC SS&D recommendation calls for the creation of four continental United States support regions, each having one strategic distribution platform and one or more forward distribution points (FDPS). The current SDPs in San Joaquin, Calif., and Susquehanna, Pa., will be joined by new SDPs at Warner Robins and Oklahoma City. The remaining 11 collocated distribution depots and one non-collocated distribution depot will be reconfigured as FDPs as necessary. Their mission will be to provide storage and distribution support to collocated industrial customers and select local customers, and to provide support for reimbursable work, end items, hard to handle items and hazardous items. The entire distribution network will support global, regional, on-base and industrial maintenance activities, and is intended to create an efficient materiel flow for customers within a region, achieve inventory investment savings for DoD, and reduce customer wait time for parts. Distribution subject matter experts continue their efforts to define how the distribution network will be reconfigured.
The BRAC DLR Procurement Management Consolidation recommendation realigns the procurement management function and related support functions for the acquisition of new depot-level reparables to DLA. Accomplishing this change will not only allow DoD to present a single face to industry for new DLRs, but will also provide many other cost-reducing benefits to the department through more effective strategic sourcing, leveraged buying power, reduced inventory and lean processes.
In June 2008, over 100 positions transferred from the Air Force to DLA when DLA stood up its first DLR detachments at Air Force ALCs Ogden and Oklahoma City. In November 2008, additional DLA DLR detachments activated at two Naval Inventory Control Points, as well as at one remaining Air Force ALC, bringing about 140 additional positions to DLA. DLA DLR detachments at Army sites stand up beginning in 2009 and continue through 2011, while the DLA DLR detachment at the Marine Corps is slated to come on board in 2011.
The BRAC 2005 DLR recommendation also includes an effort called Consumable Item Transfer (CIT). CIT continues long-standing efforts to transfer work associated with the item management and related support functions of the services’ consumables to DLA, except exempted items. Over the course of implementing the BRAC CIT directive, which began in March 2007 and is slated for completion in 2011, more than 50,000 national stock numbers are projected to transfer from the services to DLA.
Under the Commodity Management Privatization recommendation, BRAC 2005 also charged DLA with the responsibility for privatizing DoD’s entire logistics process for three commodity lines: tires; packaged petroleum, oils and lubricants; and compressed gasses. The BRAC statute requires that DoD disestablish the supply, storage and distribution functions previously performed by DLA and the military services for these commodities and rely completely on private industry vendors to perform them. In executing this mandate, DLA assumed responsibility for these commodities from the military services and awarded four privatization contracts for land tires, aviation tires, chemicals and packaged petroleum products, and compressed and liquefied gasses and cylinders. Full implementation of all contracts was completed in August 2008, with vendors responsible for 100 percent of the supply support for the commodities covered under the privatization contracts.
FULL IMPLEMENTATION
The BRAC 2005 Supply and Storage recommendations will be fully implemented by September 2011. So far, more than 1,300 positions have transferred to DLA from the services through implementing the DLR and SS&D recommendations at various sites. Lessons learned from these transfers have served as a template for the functions and manpower yet to be transferred to DLA at other sites. ♦
Bill Budden is the executive director, Defense Logistics Agency Strategic Programs.