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The Navy introduced Naval Sustainment System (NSS) – Supply in October 2020 to design a single, strategic-scale, sustainable Navy-wide supply chain. As part of NSS-Supply’s cash recovery plan for the Navy Working Capital Fund-Supply Management (NWCF-SM), Naval Supply Systems Command Weapon Systems Support (NAVSUP WSS) launched the Cash War Room focused on prioritizing deliveries and validating spares Purchase Orders (PO) without impacting readiness to conserve cash in Fiscal Year 21/22.
NAVSUP WSS' NWCF operation is run like a business in that a business relies on cash through sales to pay expenses to keep the business running and to replenish money to continue buying or repairing more products. When a business is unable to bring in more cash than they pay out in expenses, it becomes insolvent and could possibly cease to exist. The NWCF must also operate within certain rules to ensure its solvency.
“It is imperative to conserve cash in the NWCF to keep products, spares or repairs, on the shelf to meet the fleet’s readiness requirements, satisfy customer demand, and maintain customer trust and confidence in the government’s supply chain,” said Rainy Lowery, NAVSUP WSS Director, Special Projects.
NAVSUP WSS has a very robust, data-backed and well-governed approach to defining requirements. However, previously a ‘cash lens’ was not always applied, according to Capt. John Montinola, NAVSUP WSS, Comptroller. While the requirements are usually valid and necessary, there is opportunity to put more scrutiny on delivery schedules to better align spare deliveries with fleet customer demand.
"Cash lens refers to viewing each NIIN (part) with the intent to delay, defer, reduce, and validate the requirement,” said Montinola. “This preserves or generates cash in the Navy Working Capital Fund provided it does not negatively impact readiness, cash balance, or contribute to cash insolvency in the future years.”
The Cash War Room is also introducing an additional scrutiny into the buying process. Open spares contracts are being reviewed to see where room exists to adjust delivery schedules to conserve Fiscal Year (FY) 2021/2022 cash. A cash lens will also be embedded into existing business processes to review current requirements prior to funds obligation to mitigate costs and maximize obligation authority.
“A new NIIN/PO review will start in September and look at 269 NIINs ranging in value between $25.2 million to $158 million automatically marked for termination through our Financial and Logistics Integrated Requirements Report data and continue to preserve or mitigate our cash effort,” said Montinola. “This process allows NAVSUP WSS to determine which product orders do not meet customer readiness requirements and clears shelf space for products that can immediately sell, which will positively impact cash.”
Each Cash War Room sprint reveals new lessons learned to assist in uncovering resources more effectively and efficiently.
“Our new initiative is an example of NAVSUP WSS taking a strategic approach to improve cash quickly and decisively,” said Montinola. “In addition to our strategic approach, we are leveraging technology with Microsoft Teams to efficiently provide updates or feedback to our Integrated Weapon Support Teams contributing to a more informed decision-making process.”
In addition, government entities such as the fleet and shipyards play a major role in keeping NWCF solvent. The COVID pandemic tested government, private sector, and academia’s supply chain over the past year.
NAVSUP has identified three areas to support NCWF solvency, according to Lowery. Congress and/or the Office of Budget providing appropriate funding levels to the command’s customers, customers using their buying power to purchase parts from NWCF generating immediate sales to improve cash and honoring the budget requirement request.
The Cash War Room has generated $421.9 million cash value for FY 21/22 with the current Purchase Order review, and over the past several months, the team reviewed $1.8 billion worth of FY 21/22 contracts. The target is to conserve $500 million in total cash for FY 21/22.
“The Cash War Room is one of many NAVSUP initiatives to ensure the government’s supply chain institutionalizes fault tolerance,” said Lowery. “NAVSUP WSS uses best practice methods and insights to look at Supply Chain Management challenges from both the supplier and consumer perspective and address issues. These initiatives strengthen NAVSUP’s relationship with our strategic partners and ensures fleet requirements for readiness remains constant even when other supply chains fail.”
NAVSUP WSS is one of 11 commands under Commander, NAVSUP. Headquartered in Mechanicsburg, Pennsylvania, NAVSUP employs a diverse, worldwide workforce of more than 22,500 military and civilian personnel. NAVSUP and the Navy Supply Corps conduct and enable supply chain, acquisition, operational logistics, and sailor and family care activities with our mission partners to generate readiness and sustain naval forces worldwide to prevent and decisively win wars. Learn more at www.navsup.navy.mil, www.facebook.com/navsupwss, and https://twitter.com/navsupsyscom.
| Date Taken: | 09.15.2021 |
| Date Posted: | 09.15.2021 10:06 |
| Story ID: | 405286 |
| Location: | PHILADELPHIA, PA, US |
| Web Views: | 486 |
| Downloads: | 0 |
This work, NAVSUP WSS Cash War Room keeping NWCF solvent, by Brian Jones, identified by DVIDS, must comply with the restrictions shown on https://www.dvidshub.net/about/copyright.
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