Defense logistics agency issue - KMI Media Group

With nearly $15 billion in sales projected
for this fiscal year, the Defense Logistics
Agency’s Troop Support would rank in the
top third of the Fortune 500. However, it
operates under conditions and constraints
that similarly sized private companies don’t.
For one thing, some of its customers work
in war zones. For another, certain products
it buys have to be made wholly within the
United States.
Nonetheless, this Philadelphia-based arm
of the DLA has applied commercial techniques
and technology, including local sourcing
and just-in-time delivery, to save tens of
millions of dollars annually. The goal is to
save an additional $252 million over the next
five years. This is being done while improving
the quality of foodstuffs, medical supplies,
construction equipment and clothing, as a
look at each of these areas shows.
meaLs, ready-to-eat
and otherwise
A recent example of such an improvement
comes from DLA Troop Support’s
Subsistence Directorate, which in March
established a second Afghanistan distribution
center in Helmand province. This reduced
perishable food transportation time by two to
four days for each shipment, which average
3,750 a month.
“What we try to do is purchase as much
locally to cut down on the transportation
costs,” said Rich Faso, director of subsistence
customer operations. “For instance, we’ve got
two very good sources of bottled water right
in Afghanistan that we purchase from.”
Having local sources helps overcome
supply chain problems, such as those that
have arisen due to the closing of land routes
through Pakistan. In addition to saving
money and time, this approach injects funds
into the local economy.
The local sources are inspected and
approved by U.S. Army Public Health Command.
Quality controls are also written into
vendor contracts.
The Supreme Group USA of Reston, Va.,
is the prime food services vendor in Afghanistan.
Supreme financed, designed, built and
manages the Helmand regional distribution
site, said Mick Schuster, the company’s
managing director for logistics. Self-contained,
the plant has warehouses and bulk
fuel installations, as well as its own security
arrangements, water purification and sewage
treatment plant. It represents an investment
of $110 million.
“Supreme made a commercial decision
to establish ‘regional distribution centers’ to
facilitate improvements in supply chain performance
with product stored closer to point
of consumption on military bases, thereby
reducing risk and enhancing service to the
warfighter,” Schuster said.
It helps that the company has been operating
in challenging environments for more
than 50 years. However, each theater of operation
is unique. For instance, in Afghanistan,
there’s a lack of transportation infrastructure,
severe weather conditions, mountains and
deserts, as well as security threats. Supreme
has to provide tailored solutions and be flexible,
Schuster noted.
In addition to frozen, dried and other
commercially standard foodstuffs, DLA’s Faso
noted that the Subsistence Directorate also
procures some warfighter-specific items, like
MREs. Meals-ready-to-eat have a long shelf
life, are fully cooked and ready to serve.
No matter what the foodstuff, DLA Troop
Support must deal with a long supply line
and overcome possible disruptions. Hence, it
maintains a 60-day inventory along the supply
chain. That’s a substantial amount of material,
considering that some 40 shipping containers
are needed a day just to feed those serving in
For the Troops
at dLa troop support, cots techniques save money.
By hank hogan
mLf correspondent
Afghanistan. This inventory approach is not
used within CONUS, as the commercial infrastructure
and supply chain in the continental
U.S. can handle disruptions.
As for the future, one possibility being
investigated is for DLA Troop Support to go
a step beyond food delivery and move into
its preparation. Today, that is handled by the
military services themselves, Faso said. “To
take over that responsibility, we’ll have to
show a good cost savings, not only for them
but the government as a whole.”
suppLying pharmaceuticaLs
and more
DLA Troop Support’s Medical Directorate
purchases drugs, medical supplies and equipment,
with the last including such high-dollar
items as MRI imagers, CT scanners and the IT
that manages the images produced. For the
most part, this is done with only about a 20th
of the inventory stored in depots, said Don
Buchwald, director of customer operations
for the Medical Directorate.
The reliance on commercial vendors and
the use of just-in-time delivery has to be
adjusted a bit, due to the need to be ready for
the unexpected. For example, there may be a
sudden surge in demand due to a disaster or
the outbreak of hostilities, but that possibility
has been planned for.
“At the cost of $24 million a year, we’re
able to get guaranteed access to $778 million
worth of material,” Buchwald said.
Areas with a robust supply chain and
good transportation infrastructure typically
operate on an ‘order today, get it tomorrow’
schedule. One challenge is the sheer number
of items and the fact that some require
special handling, such as refrigeration or
the avoidance of heat en route. The latter
is handled through the use of temperature
monitors and other technology.
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