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FORT BELOIR, Va. - The Defense Logistics Agency is partnering with U.S. Transportation Command and the military services on a program to save money within the end-to-end supply chain.
The Strategic Network Optimization Program seeks to optimize the number, location and function of distribution and disposition facilities and transportation resources. This will reduce operating costs, balance efficiency and effectiveness, and provide agility and performance to support customers during both peacetime and contingency operations, officials said.
“The SNO program is moving the Defense Department … toward the next evolution in the global supply, distribution, disposition and transportation network,” said Lynne Allen, DLA SNO program manager.
As a result, the agency will be better able to position material to meet customer expectations at a reduced cost. The integration of information systems and other functions in and outside DLA will streamline the agency's interfaces and allow for more flexible customer relationships.
“We’re taking a look at that end-to-end effort – from the acquisition of material to the actual delivery – and seeing where we can gain efficiencies,” said Clyde Hobby, executive director of DLA Strategic Programs and Initiatives.
DLA acquires materials from vendors or distributes them from one of its supply centers based on customer demand. Material is then delivered to customers through one of the agency’s distribution depots, he said.
“When we do that, [material] goes through several hands: the vendor picks it up and delivers it to a depot, the depot places it in storage and then puts it into the distribution system where it is then delivered to the customer,” Hobby said. “So you can see the multiple touches there. In that supply chain, there’s room for a lot of efficiencies.”
He said there are multiple ways to gain cost and time efficiencies based on location and positioning of inventory, for example. Modeling tools will help find those efficiencies.
“Currently, we are using an analytical tool, a modeling tool, and we’re loading in our demand, distribution and disposal data along with USTRANSCOM loading their transportation data, surface and air,” Allen said.
The analytical software uses a common database between USTRANSCOM, DLA and the services. The result is a model that highlights areas in which efficiencies can be gained.
USTRANSCOM and DLA have both run models with assumptions of data, but this is the first time they’ve used a shared, combined database that shows a common picture of the distribution network.
“It’s the most realistic model for us to use to benefit warfighters,” Allen said.
“If we can find cheaper ways to provide it to [customers] or more efficient ways, then they have more funds to train or buy more and better equipment,” Hobby said.
The program will also benefit the agency.
“DLA operates on a reimbursable basis, so if we can lower some of our infrastructure cost by gaining more efficiencies, … it reduces our cost so our cost-recovery rate goes down and we operate at a better margin,” Hobby said.
“SNO is poised to help DLA reap the benefits of successful efficiency-focused pilot programs across the network,” Allen said. “By examining these best practices and aiding their wider implementation, the SNO program will bolster the most successful strategies for cost reduction and streamlining across the organization.”
The material will get to the customer faster, which will allow warfighters be more effective, Hobby said.
“The cooperation we’re getting between DLA and USTRANSCOM is superb, essentially two big strategic partners that work together to help wafighters,” Hobby said.
| Date Taken: | 12.03.2010 |
| Date Posted: | 12.06.2010 14:24 |
| Story ID: | 61468 |
| Location: | FORT BELVOIR, VIRGINIA, US |
| Web Views: | 25 |
| Downloads: | 2 |
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