Defense logistics agency issue - KMI Media Group

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providing over 75 million lines of inventory in their database with 14,000 parts searched for on a daily basis. For government use specifically, the firm lists about 13 million items of both active and historical use. “ILS assists DLA in providing them a global asset view of available parts,” said Angelbeck. “We deal with a lot of MICAP (mission impaired capability awaiting parts) situations, incapable aircraft that they need a part for to get it back into service. We assist them with identifying the parts so they can get it in house and help the warfighter.” He added that the company sees even greater opportunities with DLA in light of the recent update to the 2012 Director’s Guidance, which he said places an “emphasis on shifting industry capabilities” in light of the tightening DoD budget situation, coming Afghanistan drawdown and other factors. “One of the things at the top of their list is viewing information as the most cost-effective means to overcome the perceived cost shortfall,” said Angelbeck. data advancing efficiency With procurement cost and delivery timing a central focus of DLA Aviation’s operations, data management and other technological advances are a key component to ensuring both. Pratt & Whitney’s Mitchell noted that in support of the contract, the company has developed a sophisticated forecast modeling tool and process that the Air Force has cited as a best practices effort. She said these “value stream” enhancements are being worked as part of a collaborative forecasting process for aviation supply deliverables, adding that the company is currently working with DLA Aviation and Air Force Global Logistics Support Center and industry peers on further improvements in this area. “That’s really one of the most significant initiatives we as industry are working on with the DLA, to come up with a better forecasting process that will produce a more accurate and stable demand signal that we can reliably execute, resulting in 100 percent on-time delivery to customer need,” said Mitchell. According to ILS’s Angelbeck, his firm not only connects DLA with needed parts, but also forecasts future demand for a particular part based on historical data and 28 | MLF 6.5 historic pricing information, which helps any purchaser with the bottom line. ILS’s market intelligence group develops 12-month predictions for the expected supply and demand on a particular part, data that is linked to the broader availability data, providing government contractor information that includes pricing history for negotiation purposes. “They have a base line to go out and procure that part,” Angelbeck said. Outside of suppliers to the agency and those who connect the two, another component of the DLA supply chain is the firms that do repair work on military aircraft. Dan Gonzales, vice president of business development for government and military sector at Tempe, Ariz.-based StandardAero, said that while the aviation overhaul firm has other arrangements in place should it not be able to get materials through the agency, it relies on DLA to provide parts for many of its operations. “One of the benefits of working with DLA is that they are a very steady supplier of parts,” said Gonzales. StandardAero does depot work for the Air Force, Navy and Coast Guard, which totals 30-35 percent of their $1.5 billion in annual revenue, said Gonzales. Their largest workload portion is managing the overhaul of the C-130 supply plane’s T56 turboprop engines, which they have been doing at the former Kelley Air Force base since 1999. Randal Herrington, director of materials for the StandardAero’s T56 operations, said DLA is good at ensuring the operation’s steady part demands are met using their forecast data. “That is certainly how we work best with the DLA,” said Herrington. Gonzales said that one of the ways they ensure this is effective is to collect real time data, evaluated and calculated nightly to feed their forward supply projections. He added that they’ve also come to count on regularly scheduled meetings with DLA as part of their work with the agency to ensure efficiency. Advances in procurement modeling are also leading to further potential logistics advancement. Gonzales said that StandardAero is developing a model that would anticipate when engine part failures will occur in the field in anticipation of demand patterns for the DLA to reduce down times for broken engines. Pratt & Whitney’s Mitchell also pointed to discussions about the use of performance-based logistics contracts as a possible means of improving logistics outcomes, although she said that these types of contracts are typically led by the Air Force, as they own system level performance and DLA is not responsible for metrics at the operational level. This points to DLA’s integral but in some ways limited role in the overall military procurement process. “I think there is still some confusion about role of DLA in PBLs,” she said, adding that industry and government are trying to figure out what DLA’s actual responsibility would be under such a contract. Even as DLA Aviation and its partners take advantage of the latest datadriven technology and analysis, the agency continues to look forward to other ways in which it can improve the aviation supply procurement process for the armed services, its industry partners and the taxpayer. ILS’s Angelbeck said that a major topic within the aviation supply industry currently is counterfeit parts and how to ensure they don’t get onto planes. One of the ways ILS seeks to address the issue is traceability of part history within its database. “One of the things that is important to DLA and industry is traceability,” said Angelbeck. “They want to have the routing going back to the manufacturer. One of the things we are working on with the DLA is traceability within our database. We hope, in the near future, to supply traceability and at the least, tag the particular supplier.” DLA’s Jansson said that the agency is looking to take traceability even further, utilizing the latest in individual part tracking technology. “DLA, overall, is working on new technology to try and help mitigate the risk of counterfeit parts using biological DNA to stamp electronic components for example, to ensure as counterfeit parts aren’t entering the supply chain.” O For more information, contact Editor-in-Chief Jeff McKaughan at jeffm@kmimediagroup.com or search our online archives for related stories at www.mlf-kmi.com. www.MLF-kmi.com
With nearly $15 billion in sales projected for this fiscal year, the Defense Logistics Agency’s Troop Support would rank in the top third of the Fortune 500. However, it operates under conditions and constraints that similarly sized private companies don’t. For one thing, some of its customers work in war zones. For another, certain products it buys have to be made wholly within the United States. Nonetheless, this Philadelphia-based arm of the DLA has applied commercial techniques and technology, including local sourcing and just-in-time delivery, to save tens of millions of dollars annually. The goal is to save an additional $252 million over the next five years. This is being done while improving the quality of foodstuffs, medical supplies, construction equipment and clothing, as a look at each of these areas shows. meaLs, ready-to-eat and otherwise A recent example of such an improvement comes from DLA Troop Support’s Subsistence Directorate, which in March established a second Afghanistan distribution center in Helmand province. This reduced perishable food transportation time by two to four days for each shipment, which average 3,750 a month. “What we try to do is purchase as much locally to cut down on the transportation costs,” said Rich Faso, director of subsistence customer operations. “For instance, we’ve got two very good sources of bottled water right in Afghanistan that we purchase from.” Having local sources helps overcome supply chain problems, such as those that have arisen due to the closing of land routes through Pakistan. In addition to saving money and time, this approach injects funds into the local economy. The local sources are inspected and approved by U.S. Army Public Health Command. Quality controls are also written into vendor contracts. The Supreme Group USA of Reston, Va., is the prime food services vendor in Afghanistan. Supreme financed, designed, built and manages the Helmand regional distribution site, said Mick Schuster, the company’s managing director for logistics. Self-contained, the plant has warehouses and bulk fuel installations, as well as its own security arrangements, water purification and sewage treatment plant. It represents an investment of $110 million. “Supreme made a commercial decision to establish ‘regional distribution centers’ to facilitate improvements in supply chain performance with product stored closer to point of consumption on military bases, thereby reducing risk and enhancing service to the warfighter,” Schuster said. It helps that the company has been operating in challenging environments for more than 50 years. However, each theater of operation is unique. For instance, in Afghanistan, there’s a lack of transportation infrastructure, severe weather conditions, mountains and deserts, as well as security threats. Supreme has to provide tailored solutions and be flexible, Schuster noted. In addition to frozen, dried and other commercially standard foodstuffs, DLA’s Faso noted that the Subsistence Directorate also procures some warfighter-specific items, like MREs. Meals-ready-to-eat have a long shelf life, are fully cooked and ready to serve. No matter what the foodstuff, DLA Troop Support must deal with a long supply line and overcome possible disruptions. Hence, it maintains a 60-day inventory along the supply chain. That’s a substantial amount of material, considering that some 40 shipping containers are needed a day just to feed those serving in For the Troops at dLa troop support, cots techniques save money. By hank hogan mLf correspondent Afghanistan. This inventory approach is not used within CONUS, as the commercial infrastructure and supply chain in the continental U.S. can handle disruptions. As for the future, one possibility being investigated is for DLA Troop Support to go a step beyond food delivery and move into its preparation. Today, that is handled by the military services themselves, Faso said. “To take over that responsibility, we’ll have to show a good cost savings, not only for them but the government as a whole.” suppLying pharmaceuticaLs and more DLA Troop Support’s Medical Directorate purchases drugs, medical supplies and equipment, with the last including such high-dollar items as MRI imagers, CT scanners and the IT that manages the images produced. For the most part, this is done with only about a 20th of the inventory stored in depots, said Don Buchwald, director of customer operations for the Medical Directorate. The reliance on commercial vendors and the use of just-in-time delivery has to be adjusted a bit, due to the need to be ready for the unexpected. For example, there may be a sudden surge in demand due to a disaster or the outbreak of hostilities, but that possibility has been planned for. “At the cost of $24 million a year, we’re able to get guaranteed access to $778 million worth of material,” Buchwald said. Areas with a robust supply chain and good transportation infrastructure typically operate on an ‘order today, get it tomorrow’ schedule. One challenge is the sheer number of items and the fact that some require special handling, such as refrigeration or the avoidance of heat en route. The latter is handled through the use of temperature monitors and other technology. www.MLF-kmi.com MLF 6.5 | 29
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