25 June 2008

Base Realignment and Closure 2005Supply and Storage

Joint Physical Inventory Working Group Meeting

22

DLA Director’s Focus

• Extend the Enterprise– DLA employees, inventories, and logistic capabilities will

be located forward

• Connect Warfighter Demand with Supply– DLA will establish and manage seamless business process

links between the services’ materiel requirements and the source of the materiel – the American industrial base

• Deliver Supply Chain Excellence– DLA will exercise responsible leadership by proactively

collaborating with national supply chain partners in developing solutions that best support the warfighter

Moving closer to true end to end supply chain support

33

BRAC 2005 Supply and Storage

Base Realignment and Closure 2005 (BRAC 2005) Supply and Storage (S&S) recommendations achieve

economies and efficiencies that enhance the effectiveness of logistics support to operational joint

and expeditionary forces

They reconfigure the Department of Defense logistics infrastructure to improve support to the future force,

whether home-based or deployed

44

Implementation Supply Storage and Distribution

DoD Data CallAnalysis

Recommendations

DLA/MRPO

Established

Today

Commission Study and

RecommendationTo President

CONOP

BRAC 2005 Supply and StorageOverview

2003 20112004 2005 2006 2007 2008 2009 2010

Presidential Review

CongressionalReview

Business Plans to OSD

Implementation Depot Level Reparables

Implementation Consumable Item Transfer

Implementation Privatization

BRAC Became

Law

ImplementationPlanning

DLA J-39Established

ImplementationComplete

55

Supply and Storage Governance

Supply & Storage

Joint Cross ServiceGroup

Materiel Readiness Component

Advisory Group

Director, DLACorporate

Board(Brief As Required)

BRACImplementation

Group(Meet monthly)

DLA –Business Manager Joint Oversight

MRPO - MRCAG Advisor

Vice Director, DLA

J-39/ MRPO

J-3/4 (COO)OEB(Brief As required)

66

BRAC 2005 Supply and Storage Decisions

Decision 35(Recommendation 176):

Depot Level Reparable (DLR)Procurement

Management Consolidation

Decision 43(Recommendation 175):

Commodity ManagementPrivatization

Decision 51(Recommendation 177):

Supply, Storage, andDistribution Management

Reconfiguration

DLRProcurement Pillar:

Transfer procurementmanagement and relatedsupport functions for the

procurement of DLRs fromthe Military Services to the

Defense Logistics Agency (DLA)

Consumable Item Transfer(CIT) Pillar:

Transfer of function related

to the management ofconsumable items from

the Military Services to DLA

Commodity ManagementPrivatization Pillar:

Transfer supply contractingfunctions for tires, packaged

petroleum products, and compressed gasses from theMilitary Services to DLA.

Disestablish (privatize) all othersupply, storage, and distribution

functions for these commodities

Strategic DistributionPillar:

Designate 2 DLA Distribution Depots

as Strategic Distribution Platforms(SDPs), mirroring the 2 existing SDPs.

Designate remaining DLA DefenseDepots (DDs) as Forward Distribution

Points (FDPs), focused on localcustomers

Maintenance DepotSupply and Storage

(Retail Operations) Pillar:Transfer all supply, storage, and

distribution functions andassociated inventories in the

military Service maintenance depots fromthe military Services to DLA

77

DLR Procurement Management Consolidation

The Decision  • …realigns or relocates the procurement management and related support

functions for the procurement of depot-level reparables (DLR) to the Defense Logistics Agency....

Post-BRAC Business Model • A Single, Integrated DLR procurement management provider supporting

all Service requirements by FY 11: 

A single face to industry for all new DLR procurement DoD fully leveraging its DLR buying power Reduced inventory Commercial partners maintaining a single procurement management

strategic partnership

Saves DOD $ by leveraging all procurement buysand managing them within a single agency!

8

DLR Way AheadDetachment Stand-up

Key Activity AMCOM TACOMNAVICP -

MechNAVICP -

PhillyWR ALC OO ALC OC ALC

MCLC - Albany

Service Provisional CCO Appointed

15-Oct-07 4-Sep-07 15-Nov-07 21-Dec-07 31-Oct-07 1-Oct-07 31-Oct-07 DSCC CCO

Establish Provisional Organization Structure

15-Jan-08 1-Oct-07 15-Nov-07 15-Nov-07 31-Oct-07No

Provisional Detachment

No Provisional

Detachment

No Provisional

Detachment

Union Notification 27-Feb-07 12-Sep-07 30-Nov-07 30-Nov-07 15-Oct-07

Workforce Notification 27-Jul-07 12-Sep-07 30-Sep-07 30-Sep-07 15-Oct-07

Position Descriptions 30-Sep-07 1-Oct-07 31-Oct-07 31-Oct-07 31-Dec-07

ID Personnel to Transfer 13-Dec-07 30-Oct-07 28-Jan-08 28-Jan-08 28-Apr-08

Service Provisional Detachment Date

17-Dec-07 1-Oct-07 21-Feb-08 31-Jan-08 28-Apr-08

Site Specific Plans 09-May-08 02-May-08 13-Feb-08 13-Feb-08 30-May-08 20-Nov-07 20-Dec-07 TBD

IT Legacy System Changes

Dec-08 Dec-08 Nov-08 Nov-08 Jan-08 Jan-08 Jan-08Prior to Det Stand-up

Detachment Stand-up 15-Feb-09 15-Feb-09 09-Nov-08 09-Nov-08 09-Nov-08 22-Jun-08 22-Jun-08 2011

DL

A D

et

Se

rvic

e P

rov

isio

na

l

Actions Completed As of 20 Jun 08

99

Consumable Item Transfer (CIT)BRAC Language

The Decision

Services relocate consumable item budgeting/funding, contracting, cataloging, requisition processing, customer services, item management, stock control, weapon system secondary item support, requirements determination and integrated materiel management Inventory Control Point function to the Defense Logistics Agency

Updates long standing CIT initiative Mission consolidation – reduces excess capacity

An integrated consumable items manager supportingmilitary Service requirements

1010

The DecisionTransfer supply contracting functions for tires, packaged petroleum products, and compressed gasses from the Military Services to DLA. Disestablish (privatize) all other supply, storage, and distribution functions for these commodities

Saves management costs by transferring contracting functions to a single procurement agency-DLA

Saves facilities costs by eliminating storage function at CONUS facilities

Saves labor costs by eliminating receipt, store, issue functions at Distribution Depots

Reduces inventory investment

Target of opportunity – reduce excess capacity, reduce costs

Commodity Management Privatization

11

Privatization and CITFunctions, Inventory, NSN Transfer

Key Activities

Privatization Consumable Item Transfer

Compressed Gasses and Cylinders

Chemicals and Packaged POL

Land Tires Aircraft Tires

2007-2011

Contract Award 30 Apr 07 2 May 07 25 Jan 07 29 Dec 06

Full Implementation 31 Aug 08 14 Aug 08 6 Nov 07 21 Oct 07

Depot Personnel Reduction Government to Contractor

30 May 09 30 May 09 13 Nov 07 19 Oct 07

Consumable Item Transfers

16,762

Remaining Consumable Item Transfer Projection

32,902

Estimated Savings ($) $91.7M $69.6M $120.2M $34.8M

As of 20 Jun 08

1212

Supply, Storage & Distribution Reconfiguration

Decision Reconfigure wholesale storage and distribution around four

regional Strategic Distribution Platforms (SDPs)Realign remaining DDs as Forward Distribution Points (FDPs)

and consolidate their supply, storage, and distribution functions, and associated inventories with those supporting industrial activities such as maintenance depots and shipyards

Enhances expeditionary force deployment and sustainment readinessReduces excess capacity Eliminates unnecessary redundancy

Strategic Distribution Platforms Distributes workload on a regional basis Satisfies wait time requirements Improves strategic flexibility and surge options

Maintenance Depot Supply and Storage Consolidates all supply and storage functions at maintenance depots and shipyards DLA responsible from receipt of requirements to delivery to mechanic Reduces unnecessary duplication Achieve minimum and necessary materiel at Forward Distribution Points

1313

Strategy

• Provide direct logistical support to depot production:– Provide supply, storage, and distribution support directly to industrial

customers

– Provide prepositioning of stocks as required by the industrial

customers…based on production driven demand plan

– Part request routed to closest hierarchical location and filled

• DLA Supply Chain Owner (SCO) is responsible for support

• DLA Site Commander:– Reports to the SCO

– Responsible for day-to-day site operations

– Provides single face to the customer

1414

Network locations are stocked independently based on customer defined requirements

Regional Alignment

San JoaquinOklahoma City

Warner Robins

Susquehanna

Corpus Christi

Hill

Barstow

San Diego

Albany

Jacksonville

Anniston

Tobyhanna

Cherry Point

NorfolkRichmond

Puget Sound

Columbus

SDPFDP

15

Military Service SS&DFunctions and Inventory Transfer

Key Activity

Air Force Navy USMC Army

WR-ALC

OC-ALC OO-ALC FRC

East

FRC

SE

FRC

SW

NNSY PSNS Albany Barstow Toby Corpus Anniston

Implementation kickoff meeting held

22-26

Jan 07

11-13

Sep 07

22-26

Jan 07

17 Jul 07 17 Jul 07 17 Jul 07 25 Oct 07

25 Oct 07 27-29

Nov 07

27-29

Nov 07

Dec 09 Dec 09 Dec 09

Charters / POAMs developed

22-26

Jan 07

11-13

Sep 07

22-26

Jan 07

19Jul 07 19Jul 07 19Jul 07 25 Oct 07

25 Oct 07 27-29

Nov 07

27-29

Nov 07 TBD TBD TBD

Strategic MOU established

30 Nov 06

30 Nov 06 30Nov 06 2 Oct 07 2 Oct 07 2 Oct 07 1 Jun 08

1 Jun 08 27-29

Nov 07

27-29

Nov 07

1 Apr 08

1 Apr 08

1 Apr 08

Strategic MOU signed

3 Aug 07 3 Aug 07 3 Aug 07 24 Jun 08 24 Jun 08 24 Jun 08

24 Jun 08

24 Jun 08 15 Jul 08 15 Jul 08

30 Jun 08

30 Jun 08

30 Jun 08

General Order completed

4 Sep 07 11 Jan 08 22 May 08

30 Jun 08 29 Aug 08

19 Dec 08

16 Mar 09

24 Aug 09 Mar 09 Jun 10 TBD TBD TBD

Day One Functional transfer

15 Oct 07

3 Feb 08 6 July 08 31Aug 08 26 Oct 08 1 Feb 09 10 May 09

19 Jul 09 Sep 09 Sep 10 Sep 10 Sep 10 Sep 10

To Be Model

15 Sep 11

15 Sep 11 15 Sep 11 3 Jan 11 3 Jan 11 3 Jan 11 3 Jan 11 3 Jan 11 Jan 11 Jan 11 TBD TBD TBD

Inventory transfer

31 Mar 09

31 May 09 31 Jul 09 1 Feb 11 15 Mar 11

25 Apr 11

13 Jun 11

25 Jul 11 Feb 10 Feb 11 TBD TBD TBD

Final Org Designated

15 Sep 11

15 Sep 11 15 Sep 11 3 Jan 11 3 Jan 11 3 Jan 11 3 Jan 11 3 Jan 11 Jan 11 Jan 11 TBD TBD TBD

Actions Completed As of 20 June 2008

1616

Mitigating Implementation Risk

• Where Is-As Is -- provides a trained/ready workforce upon transfer• Revised DLA policies -- account for many of depot current

practices… protection of stocks, materiel returns; minimum necessary, etc

• Single face to customer – DLA Site Commander has access to all DLA activities for immediate customer support

• Providing more tools/data to forward positioned DLA employees -- rapid response to customer needs

• Implementation IPTs co-lead by Military Service and DLA• Implementation -- rolling out AF, then Navy, MC and Army• Lessons learned captured and applied as implementation continues• DLA Director, as well as direct reports (staff and field commanders)

personally involved in successful BRAC law implementation

Crawl – Walk - Run

1717

Way Ahead

• Demonstrate DLA Spirit – Forward Presence– Standardization and synergy– Decisions made at point of effect

• Metrics will evolve as we continue to track– “When performance is measured, reported, compared

and rewarded…it becomes exceptional”• EBS Forward

– Process Improvement…transition to new personnel– Interface with Military Services as necessary

• Emphasis on cross-Military Service collaboration

Implement Enterprise Solutions

18

Backup

1919

• Compressed Gases and Cylinders– Worldwide supply management through customer direct shipments– Awarded to Haas TCM on 30 April. Base period of 5-years with a maximum

value of $1 Billion– Full implementation: May 2009

• Chemicals and Packaged Petroleum, Oils, and Lubricants (POL) – Worldwide supply management through customer direct shipments – Awarded to SAIC on 2 May. Base period of 5-years with a maximum value of

$1.34B– Full implementation: May 2009

• Tires– Worldwide supply management of aircraft and land tires

• Estimated value – Land: $1.6B; Aircraft: $720M; both for 5 year base period with 5 year option

– Land Tires• Awarded to Prime: Michelin North America, Sub: SAIC; on January 25, 2007; • Full implementation: November 6, 2007;

– Aircraft Tires• Awarded to Prime: Michelin Aircraft Tire Company, LLC; Sub: Lockheed on

December 29, 2006 • Full implementation: Aircraft –October 21, 2007

Commodity Management Privatization

2020

Vision

• Extend DLA’s core capability of managing supply chain processes closer to war fighter

• Focus on weapon system support

• Implement integrated demand and supply planning, sourcing, delivery, and disposal to produce point of consumption effects

WarfighterWarfighterWarfighterWarfighter

DLA / ICP’s

DLA, USTC, DTCI and Distributionproviders

Joint Forces / COCOMS

Suppliers

Provide Service Support Meeting Time-Based Obligations