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2 INTRODUCTION 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 agency's mission is to provide logistics support in the areas of contracting, contract administration, materiel supply, and technical services at the lowest feasible cost. To fulfill~its mission, the DLA should continually upgrade its capability to procure, manage, and deliver to the armed services materiel essential to the nation's-defense. In the past,:such upgrades occurred on an "as needed" basis and in a piecemeal fashion. In other cases, beneficial upgrades were not made because of budgetary constraints and an absence of perceived need. As a result, over time the overall logistics management system has become fragmented and outdated. Hence, opportunities exist to improve the efficiency and effectiveness of the operation of the agency. . In response to a growing awareness of the need for a new technology and an integrated approach to logistics management, the DLA undertook the development of a Logistics Systems Modernization Program (LSMP). The LSMP is a multi-year' phased approach for transforming the DLA into a state-of-the-art integrated logistics management agency. The logistics management systems, and the automatic data processing and telecommunication resources which support them, are integral and essential to the conduct of the agency's mission, which includes the delivery of a wide range of goods and services. The focus of the LSMP is on the basic logistic processes such as - materiel management, logistics data management, contract administration, technical services, and the underlying procedural and systematic deficiencies that limit productivity and the level of support to the military services. The LSMP is the management vehicle to plan and coordinate resources and execute the wide range of activities necessary to: sustain the existing logistics systems baseline; accommodate near-term systems modernization and work-load growth; and position the agency to develop, in the longer term' new systems and associated functional capabilities that may be required. The LSMP is to provide the overall framework for the evolution of the DLA's logistics systems. It is to "ensure that DLA logistics systems plans are consistent with DOD long-term logistics plans and that new or changed systems meet increasing functional user requirements for new applications, interactive processing, and system interoperabilitiestl (Defense Logistics Agency, 1986). 5

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6 The LSMP is in the concept development stage under the Department of Defense's (DOD) formal Major Automated Information Systems Review Council (MAISRC) process. The MAISRC approved the mission need for this program in November 1986. In order to ensure that its goals were sound and its plans executable, the DLA decided that an independent review and assessment of its approach was needed to address data base architectural issues, functional processes, and the supporting technical strategies being considered for the LSMP. 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 LSMP. The statement of task describing the work to be done by the committee is provided in Appendix A. This midterm report summarizes the findings to date of the resultant NRC Committee on Review of Logistics Systems Modernization for the Defense Logistics Agency. We approached our task by first becoming familiar with the DLA's operations, processes, automation systems, and resources as they related to the LSMP. The study began with an initial two-day briefing by the DLA beginning on May 5, 1987 in Washington, D.C. Since that time, four follow-up briefings have been conducted. Two of these briefings were held at DLA field activities and provided an opportunity for us to tour a supply center, depot, contract administration region, and the DLA's automation system design center. The briefings allowed us to interact with members of the agency and provided an opportunity for constructive exchanges of ideas. A list of presentations to the committee is provided in Appendix B. The committee meets bimonthly. Due to the continuing development of the LSMP, we elected to focus this midterm report-on the long-term goal of the LSMP--logistics excellence. Chapter 3 addresses the defense logistics environment, in which the DLA operates as a part of the DOD, and how this relationship affects its ability to perform its mission. In Chapter 4, the LSMP is presented as an opportunity for excellence that can allow the DLA to provide improved and expanded services along with increased productivity and higher operating efficiencies. Having framed goals for the LSMP, Chapter 5 provides an assessment of the DLA's progress to date. Each chapter offers suggestions or recommendations that we believe will improve the program in the near- and long-term. REFERENCE Defense Logistics Agency, 1986. System Decision Paper, Milestone I, Concept Development Phase. Washington, D.C.