Better Supply Chain Management Could Improve DoD’s Energy Posture

With little fanfare or public comment, the Department of Defense (DoD) last month published its Operational Energy Strategy. This is not your traditional green document with broad generalizations about the problems of profligate energy use and the need for conservation. Instead, the strategy makes the argument that for too long DoD considered energy to be a readily available commodity without due consideration for its costs. Reducing use of energy, particularly liquid fuels, will save the department money. More important, the new strategy recognizes that changing the way the military uses energy could have significant implications for the operations of forces in the field. Ultimately, it is a matter of lives not money.

In order to operate effectively, the U.S. military requires a massive logistical infrastructure to support its energy needs. One of the reasons the U.S. remains tied to its somewhat iffy ally Pakistan is the need to move millions of gallons of fuel into Afghanistan. The challenge of moving fuel thousands of miles and protect shipments from attack results in a very high total cost to the department. Equally important, the need to establish and maintain long and complex supply lines acts as a brake on military operations and creates an enormous potential vulnerability. The strategy reports that U.S. convoys were attacked more than 1,000 times in 2010.

The most obvious way for DoD to deal with its energy problem is to use less of it. This is a challenge considering the character of U.S. military forces and their worldwide deployment. But there are steps that can be taken such as the use of solar generators at military facilities and even forward operating bases. New technology can have revolutionary impact. The Navy is building warships with hybrid electric drives. These not only improve fuel efficiency but provide additional power that can be used for advanced capabilities such as directed energy weapons. The Army has made improved energy generation and distribution a key element of its new Ground Combat Vehicle (GCV) and Joint Light Tactical Vehicle (JLTV) programs. One of the bidders for the GCV contract, BAE Systems, has proposed an innovative hybrid electric drive for the future “war wagon.” With a hybrid electric drive, the GCV would be able to supply electric power to other systems without having to run a large gas or diesel engine.

One area of energy savings that tends to get less attention than it should is supply chain management. Just in time delivery is a natural energy saver. Transportation giants such as UPS, C.H. Robinson and Maersk Line Limited have made saving energy a central pillar of their transportation and logistics businesses. Global companies like Caterpillar, Pratt & Whitney, Boeing and Honeywell manage their supply chains so as to reduce transportation-related energy costs as well as the energy usage embodied in stocks of spare parts.

One way for DoD to reduce energy costs, improve performance and save money is to make greater use of the expertise of the private sector in managing its supply chains and logistics processes. Simply by improving coordination and consolidation of shipments among U.S. military facilities, the U.S. Transportation Command’s privately-managed Defense Transportation Coordination Initiative is saving time, dollars and energy. Companies operating under the umbrella of performance-based logistics (PBL) arrangements save energy both by reducing the material in their supply chains and by increasing the availability of platforms and systems to the warfighter. Expanding the number of PBL-based maintenance and support contracts is a straightforward way for DoD to reduce its energy usage while improving military effectiveness. Using third party product integrators can reduce energy use through improved packaging and accurate timing of the movement of goods.