Service/DLA Implementation of BRAC 2005 Supply, Storage ...transferring SS&D functions and personnel from the Services to DLA – To date, 9 DLA SS&D sites supporting Air Logistics

Service/DLA Implementationof BRAC 2005

Supply, Storage, and DistributionOctober 2009

Steve St. John

Purpose

• Provide BRAC 2005 Supply, Storage, and Distribution (SS&D) overview

• Articulate DLA’s approach to fulfilling BRAC SS&D requirements

• Expand on DLA’s Inventory Management and Stock Positioning (IMSP) solution

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Agenda

• BRAC 2005 Supply & Storage (S&S)

• Supply, Storage, and Distribution (SS&D) Management Reconfiguration

• Day 1 / As Is, Where Is

• Day 2 / To-Be / End-State

• Mitigating Risk

• Outcomes and Benefits

Presenter

Presentation Notes

Note: AF, USMC, and Army use Day 1, Navy uses As Is, Where Is Note: it varies by Service: AF = To-Be, Navy = End-State, USMC = Day 2, Army is TBD

Way Ahead:DoD Supply Chain Integration

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Reconfigure DODlogistics to enhance

warfighter readiness

2005 2011RECOMMENDATIONSDLR (including CIT)

PrivatizationSupply, Storage, & Distribution

Air Force

Army

USMC

Navy

2006

20072008 2009

2010BRAC

Traditionallogistics linear processes

PRESENT

Standardized force-focused logistics network

JointnessSynergyRedundancy

DLA

ERPIntegration

Focused onlogistics effectiveness

and efficiencies

InfrastructureReduction

FunctionalConsolidation

PAST FUTURE

Air Force

Army

USMC

Navy

DLA

IntegratedSupply Chain

https://today.dla.mil/BRAC/default.asp

BRAC 2005Supply and Storage (S&S)

• Enacted into law in 2005• Three recommendations under Supply and Storage

– Commodity Management Privatization– Depot-Level Reparable (DLR) Procurement

Management Consolidation, including Consumable Item Transfer

– Supply, Storage, and Distribution (SS&D) Management Reconfiguration

• Overarching strategy of S&S– Achieve economies and efficiencies that enhance the

effectiveness of logistics support to operational joint and expeditionary forces

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Supply, Storage, and Distribution (SS&D)Management Reconfiguration

• Realign Distribution Depots to serve as wholesale Forward Distribution Points (FDPs) and retain the minimum necessary supply, storage, and distribution functions and inventories required to support maintenance depots

• Relocate all other wholesale storage and distribution functions and associated inventories to a Strategic Distribution Platform (SDP)

• Consolidate supply, storage, and distribution functions and associated inventories at the current DLA Defense Distribution Depots with the Military Services’ maintenance activities to support depot operations, maintenance, and production by September 15, 2011

Integrated Maintenance Depot SS&D Operations

StrategicDistribution(SDP/FDP)

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• Reconfigure the DoD Distribution Network– Create four CONUS support regions, each having one Strategic

Distribution Platform (SDP) and one or more Forward Distribution Points (FDPs)

– Network supports global, regional, on-base, and industrial depot maintenance customers

– Realign 11 DLA Defense Distribution Depots (DDs) that are collocated with industrial activities and one non-collocated DD as FDPs

• FDPs retain the minimum necessary functions and inventories to support maintenance depots and serve as wholesale FDPs

• FDPs provide receiving, issuing, storing, and delivery functions in support of local and collocated industrial customers

– Equip each SDP with state-of-the-art consolidation, containerization, and palletization capabilities

SS&D Objectives –Strategic Distribution (SDP/FDP)

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Presenter

Presentation Notes

Depending on Army, may increase to 13 industrial sites. Not using “DLA is the single supply provider”. “Integrated supply provider” is OK. Retail Integration (To-Be/Day 2): Creates an integrated approach to meeting depot maintenance requirements, with DLA as the single supply provider [JM “To-Be Vision” sheet, 2/1]. Implements integrated demand and supply planning, sourcing, delivery, and disposal to improve point of consumption customer service [MRCAG 011608.ppt]. Supply Chain Process and Inventory Integration supports the BRAC SS&D recommendation [FW]. (Supply Chain Process and Inventory Integration) “BRAC is about taking walls down between wholesale and retail operations. BRAC is about the people at the retail level having direct access and input at the national level.” [LTG Dail quote, “Generals allay fears” article, ST Hotwire, 12/07]

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Forward Distribution Points (FDP)Strategic Distribution Platforms (SDP)

San Joaquin

Hill(Ogden)

Barstow

San Diego(North Island)

Puget Sound

Corpus Christi

Oklahoma City

Warner RobinsAlbany

JacksonvilleAnniston

Susquehanna

Tobyhanna

Cherry Point

Norfolk

Distribution Network (CONUS)Alignment of SDPs and FDPs

Distribution network locations are stocked independentlybased on customer defined requirements

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San Joaquin, CADLA SDP (“hub”)

DDHU – Defense Distribution Depot, Hill, UTDLA FDP (“spoke”)

DLA Ogden 23 Shop Service Centers

Example: DDHU –Industrial Customer Only

• Consolidate SS&D functions and inventories supporting industrial depot maintenance activities– Day One / As Is, Where Is – Initial Activation:

• Transfer SS&D functions and associated personnel supporting industrial depot maintenance from the Services to DLA

• Activate DLA SS&D site collocated with industrial customer– Day Two / To-Be / End-State:

• Merge distinct wholesale and consumer level (retail) supply processes and inventory

• Roll out supporting systems and process capabilities: – Inventory Management and Stock Positioning (IMSP), including

Inventory Policy Optimization (IPO) and Distribution Standard System (DSS) changes

– Local Purchase / Government Purchase Card• Transfer inventory

SS&D Objectives –Integrated Maintenance Depot SS&D Operations

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Day 1 / As Is, Where Is –Overview

• Day 1 / As Is, Where Is is the Functional Transfer and Initial Activation

– More closely connects supply with maintainer demand by transferring SS&D functions and personnel from the Services to DLA

– To date, 9 DLA SS&D sites supporting Air Logistics Center (ALC), Navy Fleet Readiness Center (FRC), Naval Shipyard, and Marine Corps Logistics Base (MCLB) customers have activated

– Future sites supporting MCLB (Barstow) and Army Depot customers will transfer by 4QFY11

DLA SS&D Sites

DLA SS&D Site Activations (Day 1)DLA Warner Robins, supporting WR ALC Oct 07

DLA Oklahoma City, supporting OC ALC Feb 08

DLA Ogden, supporting OO ALC Jul 08

DLA Cherry Point, supporting Navy Fleet Readiness Center East Aug 08

DLA Jacksonville, supporting Navy FRC Southeast Oct 08

DLA North Island, supporting Navy FRC Southwest Feb 09

DLA Norfolk Naval Shipyard May 09

DLA Puget Sound Naval Shipyard and Intermediate Maintenance Facility Jul 09

DLA Albany (Material Control Center), supporting Marine Corps Logistics Base Albany

Sep 09

DLA Barstow, supporting Marine Corps Logistics Base Barstow Sep 10 *

DLA Tobyhanna, supporting Tobyhanna Army Depot Feb 10 *

DLA Corpus Christi, supporting Corpus Christi Army Depot 2QFY11 *

DLA Anniston, supporting Anniston Army Depot 3QFY11 *

* Anticipated Activation Date 12

Presenter

Presentation Notes

Tell: There are 13 DLA SS&D sites that are being activated as a result of the BRAC SS&D recommendation. The DLA SS&D sites are collocated with Service industrial maintenance depots. The locations with an asterisk have not yet been activated as of March 09. Listed above are their expected activation dates. The DLA SS&D site names shown here are not used for the location until the site is activated. As of March 2009, abbreviations and hyphens are not used when writing the DLA SS&D Site names (or DLR Detachments, for that matter). For example, DLA-WR, DLA-OO, DLA-Warner Robins, etc. have not been communicated as official ways of writing these site names. “DLA Warner Robins” is the naming convention.

Day 1 – Lessons Learned

• Early joint Senior leadership (GO/SES) buy-in, visible to Services’ and DLA workforces, absolutely necessary

• Build the right teams and maintain continuity– Ensure the right forum for joint collaboration – Primary instrument for success is the Plan of Action and

Milestones (POAM)

• Involve Unions upfront and early • Conduct frequent Town Hall Meetings and other

communications• Human Resources

– Civilian Payroll needs end-to-end monitoring– CAC Cards must work

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After Day 1 – Transformation

• Employees coming from the Services are a critical link in DLA’s ability to deliver supply chain integration– DLA is learning from the knowledge and experience of the

employees who transferred to streamline processes and create an effective logistics operation for DoD

– Employees who transferred are learning new skills and training in DLA mission, methods, and terminology

– The workforce comprised of new and heritage DLA employees will adopt process, policy, and systems changes to operate in the To-Be / End-State environment

• Teams are working to design processes that blend the best practices from both the Services and DLA

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Day 2 / To-Be / End-State –Overview

• Day 2 (USMC) / To-Be (AF) / End-State (Navy) is the System and Process Solutions and Inventory Transfer

– Merges distinct wholesale and consumer level supply processes and inventory under a DoD enterprise supply chain management approach

• Integrates DLA supply chain and military service production support operations

– Implements integrated demand and supply planning, sourcing, delivery, and return of DLA consumable items combined with management of service-managed items to improve point of consumption customer service

• Inventory Management and Stock Positioning (IMSP) solution• Inventory Policy Optimization (IPO) tool

– To date, IMSP has been rolled out and inventory has been transferred at DLA Warner Robins

Presenter

Presentation Notes

Day 2 = USMC. To-Be = AF. Day 2 for AF is “Sustainment” which is the period of time BETWEEN Day 1 and To-Be rollout of systems changes and inventory transfer. End-State = Navy. USMC: Not merging inventory, but we are putting DSS in. IPO will be turned on (in production) 90 days after the IMSP roll-out only after AF-DLA agreement is reached.

Day 2 / To-Be / End-State –IT Approach

• Minimize impact on existing maintenance systems / processes– “Behind the screen changes”

• Maximize standardization and flexibility– ALC/NSY/FRC interfaces and DLA Enterprise Business System (EBS) /

Distribution Standard System (DSS) support– “Tool Box” support concept where not all capabilities used for all Service

customers

• Develop IT solution through multiple phases– Plan & Analyze: ”To-Be” Process Flows & Requirements Documents– Design & Build: Processes & Documentation– Test & Certification: Software & Accreditations– Implementation: Training, Data Migration & Operational (IOC)

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Day 2 / To-Be / End-State –Key Design Tenets

• Common Interfaces that create or convert Defense Logistics Management System (DLMS) compliant transactions (Requisitions, Receipts, Issues, Status, etc.)– Connected to Services’ maintenance systems unique files,

triggers or data elements

• Automated forecasting capabilities for both Naval Shipyards (NSYs) and Navy FRCs

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IMSP

Spiral 1 – AF (AUG 09) Spiral 2 – Navy (JAN 11)

• Capability to stock all DLA managed material• Protection of stock• Dynamic Deployment• Parts Request / Material Issues • Local Purchase / Emergency Buys• Parts Return / Material Receiving

• Support of non-DLA managed items• Support items less than unit of issue• Mission Support Material (MSM )• “Demand Signal” from Navy systems• Visibility of material status maintained in Navy Systems and EBS• Rip Out – Custodial Storage

IPO • Inventory Level Setting• Multi-echelon Inventory Positioning

WholesaleInventory

RetailInventory

Capitalization Optimization

Day 2 / To-Be / End-State:IMSP/IPO Components

Day 2 / To-Be / End-State –Initial Results & Lessons Learned

• IMSP Spiral 1 completed its first roll-out on 23 AUG 09 at DLA Warner Robins (WR)– Total value of capitalized stock at DLA-WR ≈ $116M

• Following roll-out: – DLA’s Enterprise Business System (EBS) system changes are

functioning as designed with only minor issues (user access, EBS rescheduler)

– Maintenance activities have seen minimal effects due to transition– Median requisition process time of less than one minute with the

exception of one day with system down issue– DLA has realized an expected daily level of requisitions from WR-ALC

with 75% to 92% being filled from stock at the collocated DDWG– Greater than 90% of the replenishments from the DD to the Shop

Service Center (SSC) have been delivered to and stowed in the SSCs– The Deployment Activity Team has been in place since 23 AUG and is

experiencing a decreasing number of issues daily19

FY10 FY11FY09 (2H) FY12

Day 1 / As Is, Where Is

NNSY5/10/09

PSNS 7/19/09

Albany 9/27/09

Barstow 9/26/10

Tobyhanna 2/28/10

Anniston3Q

Corpus Christi

2Q

BRAC SS&DImplementation Timeline

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Test

IMSP Spiral 2 & Inventory Transfer: NavySupport Design Build Deploy

DLA Jax1/18/11

DLANNSY

3/21/11

DLA NorthIsland

6/10/11

DLACherry Pt4/25/11 DLA PSNS

and IMF7/5/11

Performance Monitoring

Plan & Analyze

PortsmouthPearl Harbor

TestDesign Build DeployPerformance Monitoring

Plan & Analyze

IMSP Spiral 2.1: Marine CorpsDLA

Albany Barstow

Functions and Service Personnel Transfer In Place to DLA (Day 1 / As Is, Where Is)

IMSP/IPO Implementation, Inventory Transfer (AF, Navy) (Day 2 / To-Be / End-State)

Wynne Memo IMSP/IPO Implementation

Deliver IMSP Training to DLA SS&D Sites

Deploy

DLA WarnerRobins8/23/09

DLA OK City11/15/09

DLA Ogden1/31/10

Performance Monitoring

IMSP Spiral 1 & Inventory Transfer: Air Force

R1.2 Test

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Mitigating Implementation Risk

• As Is-Where Is – provides a trained/ready workforce upon transfer

• Revised DLA policies – account for many depot current practices, protection of stocks, materiel returns, less than unit of issue, 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-led by Military Service and DLA

• Implementation spiral – rolling out AF, then Navy, USMC, and Army – Lessons Learned captured, 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

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Changing Stovepiped Operations to Coordinated Future State

• 2009 and beyond…• BRAC 2005 Implemented• Multi-Echelon modeling

Why not use a Multi-Echelon model? IPO’s

3,000 widgets give better support and saves DoD money!

IPO

EBS

DLA computes 3,000 widgets for

all locations

ECSS

AF sends Demand Signal to

DLA

MAT

NAVSEA sends Demand Signal to

DLA

MRP II

NAVAIR sends Demand Signal

to DLA

100500300

2100

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• Integrate industrial activity materiel support with enterprise-wide capability– Process improvements…eliminate redundancy– Better utilization of inventory…stage inventory close to the industrial activity– Visibility of planned maintenance requirements to support materiel

forecasting• Provide “equal to or better” materiel support

– Dedicated receiving, storing, issuing, and delivery support from FDPs to collocated industrial customers and select local customers

– SDPs equipped with state-of-the-art consolidation, containerization, and palletization (CCP) capabilities

– Enables tailored inventory investment and storage and distribution support by customer, site, service, region, and platform

– Utilizes a trained, empowered, and fully integrated workforce sharing a common vision of uninterrupted support to depot maintenance customers and operational customers

SS&D Outcomes

Enables end-to-end supply chain integration of wholesale storage and distribution with consumer level (retail) supply processes and inventory

Presenter

Presentation Notes

NOTES: FDPs also support reimbursable work, end items, hard to handle items, and hazardous items. Distribution network optimizes support to global, regional, on-base, and industrial depot maintenance customers.

SS&D Anticipated Benefits

Improves speed, accuracy, and reliability of response to the depot maintenance customer through improved sensing of demand signals and tailored inventory investment strategies

Reduces supply chain lead times through increased stock effectiveness, maintaining the minimum necessary stock by site across the SDP/FDP network that maintains readiness response to the customer

Entire infrastructure provides in-transit cargo visibility and real-time accountability

Saves DoD money by reducing stockage, redundant inventory, and covered storage capacity

Increases strategic flexibility and surge capability of the Strategic Distribution Platforms to respond to warfighter needs in time of emergency, enhancing support and sustainment of deployed expeditionary forces

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Presenter

Presentation Notes

SS&D Management Reconfiguration: Improves speed, accuracy, and reliability of response to customers Improves customer support by tailoring logistics solutions and inventory investment strategies to individual service requirements Entire infrastructure provides in-transit cargo visibility and real-time accountability Improves sensing of demand signals Reduces redundant inventory, eliminates excess covered storage capacity, and reduces overall DOD inventory costs Reduces wait times through increased stock effectiveness – maintaining the “minimal and essential” stock by site across the SDP/FDP network that maintains readiness response to the customer Increases supply readiness by responding faster and more completely to specific requirements. Improves strategic flexibility and surge capability of the SDPs to respond to warfighter needs in times of emergency, enhancing support and sustainment of deployed expeditionary forces. Optimizes the supply chain through increased asset visibility, effectiveness, and efficiency of the entire supply chain Improves warfighter readiness

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BRAC Is A Catalyst for Transformation at DLA

• BRAC is the catalyst for much of the transformation going on at DLA– DLA’s point of hand-off to the customer has changed

• Pre-BRAC: Supply Chief / Supply Shop at the Military Service depot maintenance industrial site

• Post-BRAC: Consumer on the maintenance production line– DLA is moving from buying and setting inventory levels based on demand

history (stocking warehouses) to supporting based on both (a) industrial maintenance production schedules and (b) demand history

• DLA’s need to meet the customer’s readiness requirements has increased

• Solutions have to be integrated for stocking warehouses and meeting production schedules (BRAC with IMSP and IPO)

– DLA needs to manage vendor performance for new vendor relationships– DLA inherits new cultures and business practices with the transfer of Service

personnel• Transfer creates a cultural bridge from which DLA can learn and fill its

expanded role as a DoD supply chain provider

New Reality

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One DLA

Heritage New

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Backup

Supply Chain Integration Inventory Positioning

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SSC/ Shop Store

SSC/ Shop Store

SSC/ Shop Store

SDP

Point of Use

FDP

DSS Instance/EBS PlantDSS Worksite/Location

Replenishment Supply Flow

Example Of Stock Positioning

NIIN ACommon WW, Common to SSC with limited space, High Demand

NIIN BUnique to this plant, Common to SSC with limited space, High Demand

NIIN CCommon WW, Will meet CWT from SDP

NIIN DUnique to SSC, Space Available

2 days

6 days

< 1 day

Echelon 1DLA Owned

Echelon 2DLA Owned

Echelon 3DLA Owned

Consumption LevelExamples for Service OwnedFUM and Unit of Use

SDP – Strategic Distribution Platform

FDP – Forward Distribution Point

SSC – Shop Service Center

Point of Use – DLA owned cabinets and charts pre-filled for immediate use by production line

* Values given are notional.

Independent Wholesale &Distribution

Demand

DLASS&DSite

IMSP Overview

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• IMSP extends the DLA EBS process capabilities and system functionality necessary to support DLA’s new consumer-level (retail) supply, storage, and distribution (SS&D) responsibilities

• Includes:– Extensions to EBS capabilities in Order Management,

Inventory Management, Planning, Procurement, Metrics/Reporting

– Inventory Policy Optimization (IPO) tool used to assess the effect of inventory investment decisions on customer wait time, backorders, and fill rates, in order to optimize safety stock across multiple echelons of operating inventory

– Distribution Standard System (DSS) changes to support DLA’s new SS&D responsibilities

Presenter

Presentation Notes

Tell: In support of the SS&D recommendation, the current DLA business model is undergoing significant changes to support additional logistics responsibilities for industrial depot maintenance sites. IMSP Project extends system and process (business operational) capabilities, vice “delivering” them, because these capabilities already exist to some extent now – they are not totally new. The IMSP effort is a key part of the successful execution of the BRAC SS&D recommendation. IMSP coordinates and defines the strategy, processes, and systems needed to support the unique consumer-level requirements of industrial depot maintenance customers. The IMSP effort delivers the system and process capabilities necessary to support DLA’s new consumer-level supply, storage, and distribution responsibilities with improved level setting, as well as a streamlined local procurement and expedited local buy process. The IMSP effort will provide the ability to effectively determine safety stocks, replenishment quantities, and materiel dedicated to the industrial line customers. Consumer-level inventories will be adjusted to reflect range and depth requirements, based on weapon system bills of material (BOMs) and production schedules.

IMSP System Functionality

• Supports the implementation of the BRAC SS&D recommendation

• Enables near-immediate processing for maintenance orders that can be filled with local stock

• Enables protection of local inventory intended for maintenance demand

• Positions stock appropriately for consumer-level (retail) and wholesale demand

• Integrates consumer-level (retail) and wholesale inventory networks

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Presenter

Presentation Notes

Tell: The IMSP effort will deliver the EBS -- which includes SAP, JDA Software Services (Manugistics), and DSS -- functionality required to support DLA’s expanded consumer-level supply, storage, and distribution responsibilities taken on due to BRAC. The IMSP effort provides the systems backbone for extending DLA’s SS&D capability further forward to improve warfighter readiness. The BRAC changes require DLA to adjust its mindset to include wholesale excellence focused on worldwide customer demand as well as supply chain excellence where DLA must also meet the specific demands of industrial maintenance production schedules and bill of materiel requirements. To effectively support warfighter readiness, industrial production line customers require highly responsive support. Along with other efforts that support the execution of the BRAC recommendations, IMSP makes it possible for DLA to make this shift and meet industrial maintenance production schedules and respond in hours rather than days. Benefits of IMSP: Allows improved visibility to consumer-level demand patterns, which enables improved demand plan accuracy Provides immediate order processing and flexible returns policies that result in uninterrupted support to the customer Extends DLA’s support to depot maintenance customers and protects that materiel from world-wide availability. Combines consumer/wholesale inventory level-setting capabilities Supports the BRAC SS&D end-state of establishing DLA as an integrated supply chain provider in support of industrial depot maintenance operations The IMSP effort includes the Inventory Policy Optimization (IPO) tool and making changes to DLA’s Distribution Standard System (DSS).

Inventory Policy Optimization (IPO)

• Supports the implementation of the BRAC SS&D recommendation

• IPO is a new EBS tool designed to:– Determine the right level of

safety stock to ensure the right level of service to customers

– Assess the effect of inventory investment decisions on customer wait time, backorders, and fill rates in order to optimize safety stock across multiple echelons of operating inventory

– Address safety stock for forecastable items

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Objective:Optimization of

safety stock levels to support the

Military Services’ required

operational availability

Presenter

Presentation Notes

Tell: IPO is an inventory investment and safety stock optimization tool. IPO, a part of the IMSP effort, is one of the new components that IMSP is introducing to EBS. The IPO tool will be used to set safety stock levels for DLA-managed materiel across multiple echelons of operating inventory, to include inventory in direct support of industrial depot maintenance. The purpose of the IPO tool is to determine safety stock levels required to optimize customer wait time (CWT), requisition fill rate, and/or backorder avoidance, subject to funding and other constraints. This process will be a part of the broader integrated DLA EBS environment. Implementation of IPO will have far-reaching effects for reducing the DOD safety stock. The DOD enterprise (both Service components and DLA) will benefit from more efficient inventory investment by optimizing safety stock levels necessary to meet agreed upon availability. The IPO tool itself is part of the software suite provided by JDA Software Services which DLA uses as its Planning system, allowing for ease of integration with existing EBS processes and systems. Currently, safety stock is calculated at the item level without regard to variations in demand experienced at the consumer-level, leading to possible support deficiencies. Also, the current offline process is labor intensive, and a solution was needed to take advantage of the inherent capabilities of DLA’s Planning system. Note: IPO addresses safety stock for forecastable items; EBS performs level setting for non-forecastable items. In March 2009, IPO began collecting data in the production environment. The first users who will be impacted by IPO will be Planning Business Process Analysts in March 2009, followed by a select number of SS&D site users starting in August 2009.