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Defense Logistics Modernization 1 An Opportunity for Excellence A Report Prepared for the Committee on Review of Logistics Systems Modernization for the Defense Logistics Agency Board on Telecommunications and Computer Applications Commission on Engineering and Technical Systems National Research Council NATIONAL ACADEMY PRESS Washington, D.C. 1989
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NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for this report were chosen for their special competences and with regard for appropriate balance. This report has been reviewed by a group other than the authors according to procedures approved by a Report Review Committee consisting of members of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. ; The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Frank Press is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Robert M. White is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Samuel O. Thier is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad corrununity of science and technology with the Academy's purposes of furthering knowledge and of advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Frank Press and Dr. Robert M. White are chairman and vice chairman respectively, of the National Research Council. The project is supported by contract No. DLAH00-87-C-0002 between the Defense Logistics Agency and the National Academy of Sciences. Available from: Board on Telecommunications and Computer Applications Commission on Engineering and Technical Systems National Research Council 2101 Constitution Avenue, N.W. Washington, D.C. 20418 Printed in the United States of America
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COMMITTEE ON REVIEW OF LOGISTICS SYSTEMS MODERNIZATION FOR THE DEFENSE LOGISTICS AGENCY ROBERT P. CLAGETT, University of Rhode Island, Chairman* JOHN D. BLANCHARD, Martin Marietta Corporation DAVID K. DOYLE, Consultant DONALD L. EVANS, Tartan Laboratories, Inc. ** JACK L. HANCOCK, Pacific Bell RONALD B. OHLANDER, University of Southern California IVAN SELIN, American Management Systems, Inc *** ARTHUR F. VEINOTT, JR., Stanford University . ERNST VOLGENAU, Systems Research and Applications Corporation JOHN A. WHITE, National Science Foundation EUGENE A. GRINSTEAD, Vice-Admiral (Retired) and Director Defense Logistics Agency (Retired), Observer Staff ANTHONY M. FORTE, Study Director LINDA L. JOYNER, Administrative Secretary * Chairman, Committee on the Defense Logistics Agency as of January 1988. ** To May 27, 1988. *** Chairman, Committee on the Defense Logistics Agency until December 1987. . . .
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BOARD ON TELECOMMUNICATIONS AND COMPUTER APPLICATIONS CHARLES W. STEPHENS, Chairman, TRW Electronics & Defense Sector (Retired) JORDAN J. BARUCH, Jordan Baruch Associates, Incorporated GEORGE A. BEKEY, University of Southern California DANIEL BELL, Harvard University HERBERT D. BENINGTON, UNISYS Defense Systems CARL J. CONTI, International Business Machines Corporation DAVID J. PARER, University of Pennsylvania JAMES L. FLANAGAN, AT&T Bell Laboratories ROBERT Y. HUANG, TRW Space Technology Group (Retired) ROBERT L. MARTIN, Bell Communications Research JOHN C. McDONALD, Continental Telecommunications, Inc. WILLIAM F. MILLER, SRI International JOEL MOSES, Massachusetts Institute of Technology HENRY M. RIVERA, Dow, Lohnes and Albertson ERIC E. SUMNER, AT&T Bell Laboratories GEORGE L. TURIN, University of California, Berkeley KEITH W. UNCAPHER, University of Southern California ANDREW J. VITERBI, University of California at San Diego WILLIS H. WARE, The RAND Corporation BARRY H. WHALEN, MCC Corporation Staff JOHN M. RICHARDSON, Director ANTHONY M. FORTE, Senior Staff Officer BENJAMIN J. LEON, Senior Staff Officer BERNARD J. BENNINGTON, Visiting Fellow CARLITA M. PERRY, Administrative Specialist KAREN LAUGHLIN, Administrative Coordinator LOIS A. LEAK, Administrative Assistant LINDA L. JOYNER, Administrative Secretary 1V
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PREFACE The Defense Logistics Agency (DLA) has undertaken a modernization program referred to as the Logistics Systems Modernization Program (LSMP). This is the final report of the National Research Council's (NRC) two-year study of the LSMP. The committee performing this study was established in April 1987 at the request of the deputy director of the DLA to review the modernization strategy and management approaches being used in the LSMP. In our midterm report, we found the concepts for the LSMP were still being developed so we focused on the management and planning issues that confronted the agency. The midterm report contained suggestions for developing an agency-wide plan and implementation procedures. We identified major factors that could adversely affect the success of the program. At that time we anticipated our second year task would be to review the detailed plans and requirements that were to be developed. Unfortunately, the agency has made little progress in developing its modernization plans and strategic steps toward implementation. This final report presents the issues that we feel are the most important to modernize the DLAs logistics systems that will serve it well into the twenty-first century. We still believe the concepts outlined by the DLA at the start of our review can be a blueprint for excellence. Throughout our study, our work has been supported by the DLA. Everyone we met was helpful and willing to provide the detailed information we requested. During the second year we continued to gather data in order to increase our understanding of the agency. Lieutenant General Vincent M. Russo, former director, DLA, was always open and encouraging of our review. The current director, Lieutenant General Charles McCausland also has been supportive. Headquarters staff from the Program Office, the Office of Policy and Plans, and the Office of Telecommunications and Information Systems have provided ongoing support and responses to our requests and questions. They were helpful at every step of the study. The members of this committee spent many hours, gratis, throughout the two years of the study including on-site reviews, meetings, briefings, and detailed discussion. I wish to express my personal thanks to them for their dedication and willingness to work long hours. It made my job as chairman a pleasure, and it has been an honor v
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to work with them. All of us are particularly pleased to have worked with Anthony M. Forte, NRC Senior Staff Officer. His skill and dedication are of a very high level indeed. With appreciation the Committee acknowledges Linda Joyner for her expert administrative and secretarial support. Robert P. Clagett Chairman V1
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CONTENTS EXECUTIVE SUMMARY . . Major Findings and Recommendations /2 Progress /6 Optimization of Materiel Management /7 Data Base Issues /8 Standards /8 1 INTRODUCTION MANAGEMENT CHALLENGES IN MODERNIZING LOGISTICS SYSTEM. Responsibility, Authority, and Accountability /16 Defining Modernization /19 Resources for the LSMP /25 Issues in the Defense Logistics Environment /27 3 TECHNICAL ISSUES IN PLANNING FOR MODERNIZATION Data Base Issues /31 Standards /34 Decision Support Systems /37 4 OPTIMIZATION OF MATERIEL MANAGEMENT Limitations of the Current System /41 Integration of Materiel Management with Large-Scale Optimization /42 Advances in Large-Scale Optimization /43 Operations Research and Economic Analysis Office /44 5 ASSESSMENT OF PROGRESS . . . . . . . . . . . . . . . . . . . . . . .47 Since Our Last Report /47 Summary and Evaluation /49 APPENDIXES A. Operations and Existing Automation Systems /51 B. Statement of Task /55 C. List of Presentations to the Committee /57 D. Major Automated Information System Review Council /61 E. Glossary of Acronyms /63 V11
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