Defense logistics agency issue - KMI Media Group
Defense logistics agency issue - KMI Media Group
Defense logistics agency issue - KMI Media Group
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With nearly $15 billion in sales projected<br />
for this fiscal year, the <strong>Defense</strong> Logistics<br />
Agency’s Troop Support would rank in the<br />
top third of the Fortune 500. However, it<br />
operates under conditions and constraints<br />
that similarly sized private companies don’t.<br />
For one thing, some of its customers work<br />
in war zones. For another, certain products<br />
it buys have to be made wholly within the<br />
United States.<br />
Nonetheless, this Philadelphia-based arm<br />
of the DLA has applied commercial techniques<br />
and technology, including local sourcing<br />
and just-in-time delivery, to save tens of<br />
millions of dollars annually. The goal is to<br />
save an additional $252 million over the next<br />
five years. This is being done while improving<br />
the quality of foodstuffs, medical supplies,<br />
construction equipment and clothing, as a<br />
look at each of these areas shows.<br />
meaLs, ready-to-eat<br />
and otherwise<br />
A recent example of such an improvement<br />
comes from DLA Troop Support’s<br />
Subsistence Directorate, which in March<br />
established a second Afghanistan distribution<br />
center in Helmand province. This reduced<br />
perishable food transportation time by two to<br />
four days for each shipment, which average<br />
3,750 a month.<br />
“What we try to do is purchase as much<br />
locally to cut down on the transportation<br />
costs,” said Rich Faso, director of subsistence<br />
customer operations. “For instance, we’ve got<br />
two very good sources of bottled water right<br />
in Afghanistan that we purchase from.”<br />
Having local sources helps overcome<br />
supply chain problems, such as those that<br />
have arisen due to the closing of land routes<br />
through Pakistan. In addition to saving<br />
money and time, this approach injects funds<br />
into the local economy.<br />
The local sources are inspected and<br />
approved by U.S. Army Public Health Command.<br />
Quality controls are also written into<br />
vendor contracts.<br />
The Supreme <strong>Group</strong> USA of Reston, Va.,<br />
is the prime food services vendor in Afghanistan.<br />
Supreme financed, designed, built and<br />
manages the Helmand regional distribution<br />
site, said Mick Schuster, the company’s<br />
managing director for <strong>logistics</strong>. Self-contained,<br />
the plant has warehouses and bulk<br />
fuel installations, as well as its own security<br />
arrangements, water purification and sewage<br />
treatment plant. It represents an investment<br />
of $110 million.<br />
“Supreme made a commercial decision<br />
to establish ‘regional distribution centers’ to<br />
facilitate improvements in supply chain performance<br />
with product stored closer to point<br />
of consumption on military bases, thereby<br />
reducing risk and enhancing service to the<br />
warfighter,” Schuster said.<br />
It helps that the company has been operating<br />
in challenging environments for more<br />
than 50 years. However, each theater of operation<br />
is unique. For instance, in Afghanistan,<br />
there’s a lack of transportation infrastructure,<br />
severe weather conditions, mountains and<br />
deserts, as well as security threats. Supreme<br />
has to provide tailored solutions and be flexible,<br />
Schuster noted.<br />
In addition to frozen, dried and other<br />
commercially standard foodstuffs, DLA’s Faso<br />
noted that the Subsistence Directorate also<br />
procures some warfighter-specific items, like<br />
MREs. Meals-ready-to-eat have a long shelf<br />
life, are fully cooked and ready to serve.<br />
No matter what the foodstuff, DLA Troop<br />
Support must deal with a long supply line<br />
and overcome possible disruptions. Hence, it<br />
maintains a 60-day inventory along the supply<br />
chain. That’s a substantial amount of material,<br />
considering that some 40 shipping containers<br />
are needed a day just to feed those serving in<br />
For the Troops<br />
at dLa troop support, cots techniques save money.<br />
By hank hogan<br />
mLf correspondent<br />
Afghanistan. This inventory approach is not<br />
used within CONUS, as the commercial infrastructure<br />
and supply chain in the continental<br />
U.S. can handle disruptions.<br />
As for the future, one possibility being<br />
investigated is for DLA Troop Support to go<br />
a step beyond food delivery and move into<br />
its preparation. Today, that is handled by the<br />
military services themselves, Faso said. “To<br />
take over that responsibility, we’ll have to<br />
show a good cost savings, not only for them<br />
but the government as a whole.”<br />
suppLying pharmaceuticaLs<br />
and more<br />
DLA Troop Support’s Medical Directorate<br />
purchases drugs, medical supplies and equipment,<br />
with the last including such high-dollar<br />
items as MRI imagers, CT scanners and the IT<br />
that manages the images produced. For the<br />
most part, this is done with only about a 20th<br />
of the inventory stored in depots, said Don<br />
Buchwald, director of customer operations<br />
for the Medical Directorate.<br />
The reliance on commercial vendors and<br />
the use of just-in-time delivery has to be<br />
adjusted a bit, due to the need to be ready for<br />
the unexpected. For example, there may be a<br />
sudden surge in demand due to a disaster or<br />
the outbreak of hostilities, but that possibility<br />
has been planned for.<br />
“At the cost of $24 million a year, we’re<br />
able to get guaranteed access to $778 million<br />
worth of material,” Buchwald said.<br />
Areas with a robust supply chain and<br />
good transportation infrastructure typically<br />
operate on an ‘order today, get it tomorrow’<br />
schedule. One challenge is the sheer number<br />
of items and the fact that some require<br />
special handling, such as refrigeration or<br />
the avoidance of heat en route. The latter<br />
is handled through the use of temperature<br />
monitors and other technology.<br />
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