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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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