Logistics for the 21st Century (Log21) Problem Statement

Background

Items of supply are typically purchased from industry on an FOB Destination basis, which includes the cost of freight. In most cases, suppliers are not required to disclose the cost of transportation, or how much of their proposed price is a

result of transportation costs. Competitive pressures are often relied upon to ensure the best possible pricing, however,

a sizeable segment of the marketplace is not competitive (meaning the items only have one source or the other sources choose to not compete in the market space). Many of the businesses the items are purchased from are small businesses

and do not have the buying power to negotiate transportation rates that compare to the rates that could be obtained by

the government.

Problem/Challenge(s) Faced Lower the government’s cost of inbound transportation.

Convert the acquisition model from FOB Destination (where transportation costs are included in pricing) to another

model that strips away the cost of transportation from the supplier to government. Leverage government buying power to convert inbound transportation from higher commercial rates to lower government rates.

Consolidate freight movements where possible using a transportation management system (TMS). This would permit multiple pick-ups to be made to consolidate less-than-truckload movements into truckload movements for greater

savings. This may result in financial accounting system difficulties for allocating freight costs across supplies.

Possible Solution(s)

Convert procurement to an FOB origin pre-pay and add model.

Convert procurement to an FOB origin government paid freight model.

Implement a transportation management system to load plan and optimize inbound movements and integrate with

second destination movements when possible.

Additional Information

Discuss alternate TMS approaches – in house 3PL management versus web-based TMS interfaces.

Address challenges with integrating commercial technologies into government logistics operations.

Frederick Peterson

DOD Center of Excellence in Logistics for the 21st Century (LOG21)

The current process of administratively separating Marines requires an excessive amount

of time and effort. Improving this process will save the Marine Corps, and the taxpayer,

time, money and valuable resources.

The mission of Service Company, Headquarters and Service Battalion includes

processing Marines who were in deserter status, then returned to the Marine Corps for

administrative separation. The average time it takes to process one of these Marines is

110 days. Captain Peterson, Lean Six Sigma Green Belt, submitted a process

improvement project to the Lean Six Sigma Continuous Process Improvement Office and

the project was approved 11 February, 2014. All processing data from the last two years

was compiled and analyzed, and the process of administrative separation is being defined.

All individuals in the process have been notified and are submitting input on their roles

and responsibilities in administrative separations. The goal is to streamline the

administrative separation process, saving the Marine Corps and the taxpayer time and

money.

From 2011-213, the government spent $563,134 on pay and living expenses of deserters while they were waiting to be separated from the Marine Corps . If the time it takes to process these Marines is reduced, the government can save hundreds of thousands of dollars each year.

The administrative separation packages are routed for approval through the chain

of command using the system Marine Corps Electronic Administrative

Separations (MCEAS). Addressing the status of the packages on a weekly basis

will bring the packages to the attention of all levels of leadership, ensuring they

are handled at each level in a timely manner.

The Marine Corps Base Quantico Clinic completes the final physicals of Marines

being administratively separated. The staff at the clinic uses the standard final

physical forms and processes. A modified final physical process or new method

of scheduling tailored to the Marines being administratively separated would

minimize the time taken to complete the final physicals.

Improve MCEAS training for the clerks at each level of approval, minimizing the

number of packages returned for administrative correction.

Addressing personal effects/missing gear has been moved from the end of the

process to the beginning. This ensures the issues are handled as soon as possible,

minimizing the possibility of problems arising at the end of the processing and

delaying discharge.

Ensure solid standard operating procedures are established and turnover binders

are utilized for the troop handlers to maximize lessons learned and ensure the

improved processes and procedures are being executed.

Logistics for the 21st Century (Log21) Problem Statement

By: Tony Beard, Retail Accountable Officer, DLA Distribution San Diego Background

Defense-Wide Working Capital Funds replaced Navy Working Capital Funds for depot consumable material

support. As a result, in June 2013, the Defense Logistics Agency (DLA) Distribution assumed responsibility

of improving support to Fleet Readiness Center (FRC) which was initiated during a process known as

Inventory Management and Stock Positioning (IMSP). A major goal of this implementation is to increase

the visibility of the enterprise inventory along utilizing an inventory approach

wholesale supply chain management and consumable items in a retail environment. Additionally, outdated

information systems such as U2 and Naval Air Systems Command Depot Maintenance System (CONOPS)

DSS) and Enterprise Business System (EBS).

Problem/Challenge(s) Faced

DLA is a relative newcomer to the Navy's aviation retail business leading to some unexpected and

unforeseen situations. Planned requirements do not actually mean actual requirements when dealing with

military maintaining and repairing military aircraft. Unexpected material requirements are discovered on a

routine basis as troubleshooting and work gets accomplished on the aircraft. Due to the urgency of getting

the aircraft operational and back on mission, the majority of the material requests are high priority. A major

factor of filling the material release orders is systemically getting the material requirements in DSS so it can

be physically and systemically processed in a timely manner. Invalid inputs by the customers upon initiation

of a material release order (MRO), and invalid inputs of material received in building 660 leads to the

systems not interacting with each other and ultimately a crisis situation involving hung up material

requisitions. These crisis moments have historically led to numerous walk-throughs, after the fact posting

(post post), and delays in material releases which is not a standard practice of DLA Distribution. Walk

through requests and post post transactions have been substantially reduced, and source errors are being

reduced but further efforts are required to eliminate the root causes of reduced sustainability.

Possible Solution(s) Continue reaching out to external experts in the industry to get assistance and training where needed to minimize

errors. Conduct an in depth review of existing manuals and standard operational procedures and maintain strict

procedural compliance in all areas of the processes. Determine the source problem and analyze the causes while increasing management oversight and expanding training in the weak areas. A major aspect of problem resolution for

these issues is to report and track system glitches that may be the root cause of MROs not entering DSS or with DSS

not communicating properly with EBS. The Logistics for the 21st Century program will afford an opportunity for me

to reach out to numerous experts in the field to get ideas with developing a strategic plan to move forward.

Additional Information There are several other newly implemented retail sites within DLA Distribution and several more planned as part of

the long range plan. Once the IMSP implementation for all retail sites is completed, a more finalized set of standard

operational procedures can be established and published.

DOD Center of Excellence in Logistics for the 21st Century (LOG21)

Applicant Logistics Problem Statement or Effective Solution of a Recent Problem

Non-availability of replacement parts for aging Support Equipment

Paragraph 1: Summarize the transformational logistics issue, problem and/or solution the member is currently working in their respective position.

As is no different for any other aviation platform, the CH-46 Sea Knight helicopter had

specific Ground Support Equipment that was essential in conducting maintenance

procedures on the aircraft. Procurement of certain replacement parts for Ground Support

Equipment specific to the CH-46 became nearly impossible during the last decade of use.

The main issue came from parts being “discontinued” by the manufacturer or no longer

carried by the supply system. Simple items such as support brackets for engine carts and

couplings for corrosion carts became unavailable for procurement. Current and future

platforms such as the MV-22 Osprey and F-35 Joint Strike Fighter should incorporate a

plan for the continued availability of Support Equipment replacement parts in order to

prevent future procurement issues.

Paragraph 2: Briefly describe the potential options and/or solutions that are worth further study/review to the problem described in paragraph 1.

• Establish contracts that commit the manufacturers to producing replacement parts

for the entire service life of the equipment.

• During the procurement process, forecast resources that will be needed to support

the serviceability of equipment and have a plan in place

• Establish an internal source of supply whose primary focus is to manufacture

replacement parts that have been discontinued.