DLA Distribution initiative on packaging supplies saves agency $33 million

Courtesy Photo | Kimberly Gray, a Defense Logistics Agency Distribution employee in Susquehanna, Pa., packs items using the standardized boxes and tape as a result of a recent packaging supply initiative. (Photo by Sherre Mitten-Bell, DLA Distribution Susquehanna)  

UNITED STATES

04.13.2015

Story by Jessica Roman 

Defense Logistics Agency   

UNITED STATES - As the Department of Defense and the Defense Logistics Agency continue to evaluate opportunities to decrease costs, DLA Distribution has found a way to do its part. A joint team across DLA Distribution, made up of experts in packaging and packing policies, base supply, contracting and finance, was established to consider how costs could be reduced and standardization could be introduced in the area of packing supplies.

Armed with a goal to reduce the DLA Distribution supply budget by 10 percent, the team evaluated the processes associated with ordering and inventory management and identified areas where processes could be standardized across the network. Along with cost reductions, the team focused on reducing variances and standardizing supplies, including pallets, fiberboard boxes, packing list envelopes and tape.

As a result of the effort, and because they can be ordered in greater quantities, the price of pallets was reduced by $12 each. Packing list envelope types were reduced from 17 to three, an 82 percent reduction. Box types were also reduced, from more than 250 down to 115, and five types of tape for standard packing were selected.

The price reduction for pallets, which was the first supply the team standardized, saved $3 million in fiscal 2014. Overall, the team had a goal of saving $3.9 million from all of the packaging supply initiatives, but will exceed that goal and save almost $34 million in fiscal 2014.

“It has been a great experience being involved in a process where there are such immediate results, involving the whole DLA Distribution enterprise,” said Julie Callahan, DLA Distribution’s continuous process improvement coordinator. “Our savings are a definite result of great teamwork and continuous participation.”

This project did not impact any specialized supplies needed to meet mission requirements in specific packing areas such as hazardous materials. The team is continuing to work on standardizing gloves and tri-walls, focusing on the necessary types for different work areas.

“This particular project will provide consistency and efficiency in what is purchased to support our distribution mission, enabling DLA Distribution to produce cost savings and cost avoidances as we continue to meet the demands for budget reductions,” said Rose Snavely-Howe, chief of the Acquisition Management Division.

Editor’s note: This is the second in a series of articles that DLA will highlight on BBP 3.0 called "Better Buying Power in Focus."

• Date Taken: 04.13.2015
• Date Posted: 04.14.2015 08:02
• Story ID: 159905
• Location: US