A transformed U.S. military must be supported by a new logistics system. U.S. forces are becoming increasingly strategically deployable and operationally agile. Operations in Afghanistan and Iraq have shown that while combat forces are transforming, the logistics system has not kept pace. In Iraq, fast-moving U.S. forces outran their supply lines. Control over the supply chain was fragmented. Logisticians lacked adequate communications, databases or visibility into the system.
While the Department of Defense (DoD) has made a significant effort to modernize its logistics operations, the system still is too large, too slow, too fragmented, too expensive and technologically obsolete. The irony is that defense logisticians understand the theory of modern supply chain management. The difficulty is implementing change. A related problem is the lack of an overarching strategy for logistics transformation and the absence of centralized supervision of the massive number of disparate transformational programs.
The private sector has had tremendous successes in organizing and managing end-to-end supply chains, increasing both the speed and reliability of transportation and reducing logistics costs. The catalyst for the globalization of commerce was the transformation of supply chain management, also known as logistics. Wal-Mart success was built on an agile, lean and integrated logistics system. Companies such as General Electric, UPS and Maersk have revolutionized supply production and supply chain management with concepts such as Lean, Six Sigma and Total Asset Visibility.
The DoD is not Wal-Mart. Nevertheless, it is clear that military logistics has much to learn from its civilian counterparts. Indeed, the private sector could even take responsibility for parts of the supply chain, thereby freeing the military for other tasks. The most important lesson that the DoD can learn is the need for centralized oversight of the supply chain.
This study concludes that there are four over-arching issues that need to be addressed in order to create an agile, interoperable, lean logistics system. First, the DoD and the Services must devote adequate resources to support logistics transformation. Investment in technology is a vital aspect of transforming logistics. Areas for investment include communications capabilities, sensors and radio frequency tags, enterprise software, adequate air and sealift, automated diagnostics and change management. Second, DoD must create a standard data environment and interoperable e-Commerce and ERP solutions. Today, there exist hundreds of Service-based or DoD-wide initiatives that create the potential for real confusion, duplication of effort and delay. Third, the DoD needs to identify a single process owner who will be responsible for overseeing the movement, storage and delivery of materiel from factory-to-foxhole. Currently, TRANSCOM is only responsible for a portion of the supply chain. Last, the DoD and the Services must harness the capabilities of private industry. Private industry not only offers lessons learned but also services that could lessen the burden on the DoD.
The initial draft of this report was written by Dr. Daniel Gouré and was reviewed by members of the Logistics Working Group.
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