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EXECUTIVE SUN ~ RY
The Defense Logistics Agency (DLA) is responsible to the Secretary of
Defense for providing services and supplies used in common by all the
military services. The DLA has undertaken a broad program aimed at
modernizing its operations. The Logistics Systems Modernization Program
(LSMP)'is a loug-term, phased approach for transforming the DLA into a
state of the art integrated logistics management agency. -'
In order to ensure that its goals are sound and its plans executable,
the DLA arranged with the National Research Council's''(NRC) Board on
Telecommunications and Computer Applications to conduct an independent and
objective review' of the modernization strategy and management approaches
being employed for the LIMP. The resultant NRC Committee on Review of
Logistics Systems Modernization' has undertaken a two-year study tribe -
conducted in two one-year phases. This midterm report summarizes'the "
findings and recommendations after the first phase of the'review that '
primarily dealt with planning and management issues. To date, most of our
effort has involved reviews and analysis of existing operations,
automation systems, organizational structure, and "plans-for-planning."
During the latter part of 1987, we noted some important and much needed
progress being made in the areas of high-level objectives, program
management, business analysis, and scheduling. In the final' phase of our
study we plan to-concentrate our review on key' technical and management
issues that include standards, architectures, and decision support.
MAJOR FINDINGS AND RECOMMENDATIONS
To begin with, we support and agree with the DLA's decision to modernize
to the extent encompassed by the LSMP. It is sorely needed and long
overdue. The agency's systems tend to be paper intensive, manual,
fragmented, and outdated. Its automation systems, for the most part, are
based on obsolete technology!of the 1960s and 1970s.' They do not share
information or provide information to support decision making. 'As a
result information is often duplicated, out of date, in unusable form, or
nonexistent. The DLA is greatly dependent on automation to-perform its
mission and the trend is an increasing use of information technology.
Appendix E identifies the major information systems in use at the DLA and
the operations they serve. - ' ' -
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This program provides an opportunity to make significant gains in
operating efficiencies and productivity while increasing effectiveness.
We also support DLA's decision to start this program by examining how the
agency should change to improve the efficiency and performance of its
mission using contemporary information processing technology and integral
telecommunication networks.
As with any large program, risks accompany opportunity. Throughout
the sections of this report, we offer comments, suggestions, and advice
that may help the agency manage those risks. Here we summarize the issues
that we consider to be the most important to successful establishment and
execution of the program.
Strong Central Management
The Logistics Systems Modernization Program needs a strong
program office with centralized control and a minimum of matrix
management.
The program management office needs to evolve from a coordinating
organization to one that will drive the program. By relegating
development-tasks to field activities and various headquarters groups, the
DLA is in-danger of repeating the mistakes made by the U.S. Air Force with
its Advanced Logistics System. Autonomous activities are usually not
responsive to the program office because their priorities often do not
coincide. Top management involvement and support is needed.
Clear, Concise LSMP Objectives
The planning and development of the Logistics Systems
Modernization Program should start with a vision of what the
program is to accomplish and what it will allow the Defense
Logistics Agency to do that it currently is not doing.
This should be achieved through a straightforward and brief set of
objectives. These objectives need to be communicated throughout the
agency.
Top-Down and Bottom-Up Design
Analysis needs to be performed from both the top-down and the
bottom-up.
Thus far, the DLA has done a great deal of detailed bottom-up data
gathering in its business area analysis (BAA) process. Without top-down
involvement, the result may be to mechanize existing policies and
procedures without finding new ways of doing business, improving
operations, or reducing costs. For example, top-down analysis should help
the agency find ways to move less materiel and more information.
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Phased Approach
The Logistics Systems Modernization Program is-best approached
looking at, and designing for, the whole agency and-then
decomposing the program into smaller subproJects that can be
implemented separately. -
This will allow the agency to concentrate its modernization investment
where it is needed most in its major mission areas of integrated materiel
management and contract administration. Other subprojects could be set up
to develop a DLA-wide technical architecture, decision-support system,
data base, data elements, or communications infrastructure. This should
help reduce development risks and the disruption caused by change without
overburdening the agency's limited technical and management resources.
External Policy Guidance
There are doctrinal and policy issues that warrant policy
guidance directives by the Office of the Secretary of Defense.
There are a number of doctrinal and policy issues that the DLA cannot be
expected to resolve on its own and should look to the Office of the
Secretary of Defense (OSD). Chapter 3 of this report treats this subject
more thoroughly, but the most pressing issues involve materiel visibility,
excess inventories, and stocking policies. Voids in this area have left
the logistics community groping for leadership and direction and have
affected decisions at both the DLA and the services.
GOALS AND OBJECTIVES FOR THE
DEFENSE LOGISTICS AGENCY
Much of our initial effort was concentrated on understanding the DLA's
mission and how it might change in the future. Within this framework, we
assessed the requirements to be met by the DLA's future generation
logistics systems. As part of our review, we were particularly interested
in understanding what high-level goals had been established for the agency
that the LSMP could help achieve. Based on briefings and our own
assessment, the following are the major goals for the LSMP:
o
a
o
a
o
Improve mobilization (surge) capability.
Improve the readiness of peacetime forces.
Improve responsiveness to customers.
Decrease the cost of operations.
Improve the quality of materiel and services.
We believe that a set of specific objectives and performance measures
for the near- and long-term can and should be developed in support of the
agency's broad modernization goals. In developing its objectives, we
suggest that the DLA undertake the following actions during the next
year.
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o Adopt Integrated Materiel Management.
- In concert with the services. define surge and new
production logistics requirements to support contingency
operations, mobilization, and general war plans.
Integrate decisions by inventory managers on order
quantities with procurement decisions of buyers to
systematically exploit scale economies in procurement.
- Define the policies and procedures to reduce what appear to
be excessive levels of returned material from the services.
o Evaluate the advantages of enhanced item visibility (i.e.,
current information on location, availability and quantity of an
item) with the associated costs of acquiring that capability.
O Establish standards that will take into account the near-term
upgrades of the current systems, OSD-directed standards, and the
LSMP objective architecture.
0 Develop plans for deploying the LSMP in logical segments that
will accommodate existing systems and allow a smooth transition
to future capability.
Evaluate system security trade-offs and factor these requirements
into technical and budget considerations.
o Determine data flow and interoperability requirements including
decision support systems for all levels of the DLA's management
and exchanges with the OSD and other service logistical
management systems.
Develop a basic and applied logistics research program including
operations research techniques, artificial intelligence,
distributed processing, mathematical modeling for decision
making, and information handling. This may be best accomplished
by establishing a center of excellence at an academic institution
so that academic, industrial, and military interests can be
brought together.
Develop a plan to identify, recruit, train, develop, retain, and
maintain a core of technical and management personnel in the
information sciences along with the facility and tools to support
them.
Since our work has coincided with the planning of the LSMP, some of
our thoughts and recommendations have already been implemented by the
DLA.
LOOKING AHEAD
In the next year, the LSMP will undergo its most critical development
period in which the business area analysis should teed to the
establishment of objectives, functional requirements, and an information
architecture. While there are key developments required in many
functional areas, we believe that the most important involve surge
requirements, item visibility, standards, security, decision support, and
program management. In the final year of our study, we will review and
report on several areas in more detail including standards selection,
decision support, technical architectures, and modernization management.
Representative terms from entire chapter:
defense logistics
