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Planning for
Defense Logistics
Modern ization
A Report Prepared by 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. 1988
!. ' .
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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 the 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 achieve-
ments 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 community 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
1 '
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COMMITTEE
REVI-EW OF LOGISTICS SYSTEMS
MODERNIZATION FOR THE DEFENSE LOGISTICS AGENCY
ROBERT P. CLAGETT (Chairman) * ~
Dean, College of Business Administration
. . . .
The University of Rhode Island
JOHN D. B LAN C HARD
Vice President, Materiel Operations
. ~
Martin Marietta Corporation
DAVID K. DOYLE
Consultant
DONALD L. EVANS
President and Chief Executive Officer
Tartan Laboratories, Inc.
JACK L. HANCOCK
Vice President, Information Systems
Pacific Bell
RONALD B. OHLANDER
Director for the Intelligent System
Division and Director of the
Computation Center
Information Sciences Institute
University of Southern California
. . .
STAFF
Richard B. Mars ten, Director ***
John M. Richardson, Director ****
Anthony M. Forte, Study Director
IVAN SELIN (Chairman) **
Chairman of the Board
American Management Systems, Inc.
ARTHUR F. VEINOTT,-JR.
Professor of Operations Research
Department of Operations Research
Stanford University
ERNST VOLGENAU
President
Systems Research and Applications Corp.
JOHN A. WHITE
Regents' Professor
School of Industrial and Systems
Engineering
Georgia Institute of Technology
EUGENE A. GRINSTEAD (Observer)
Vice-Admiral (Retired) and Director,
Defense Logistics Agency (Retired)
* Chairman, Committee on the Defense Logistics Agency as of January 1988
** Chairman, Committee on the Defense Logistics Agency until December 1987
*** Director, BOTCAP until January 1988
**** Director, BOTCAP from January 1988
. . .
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BOARD ON TELECOMMUNICATIONS AND COMPUTER APPLICATIONS
CHARLES W. STEPHENS (Chairman)
Vice President and General Manager
TRW Electronics &.Defens.e Sector (Retired)
DANIEL BELL
Henry Ford II Professor of Social-
Sciences ..
Harvard University
HERBERT D. BENINGTON
Director of Planning
UNISYS Defense Systems
CARL J. CONTI
Vice President and Group Executive:
Information Systems and.S.torage Group
IBM Corporation
DAVID J. FARBER
Professor of Computer and Information
Science and Electrical Engineering
University of Pennsylvania .
JAMES L. FLANAGAN
Director, Information and Principles
Research Laboratory
AT&T Bell Laboratories
DONALD M. KUYPER
Group Vice President, Business Services
GTE Telephone Operating Group
JOHN C. McDONALD
Executive Vice President Technology
Continental Telecommunications, Inc.
STAFF
John M. Richardson, Director *
Richard B. Marsten, Executive Director **
Anthony M. Forte, Senior Staff Officer
Karen Laughlin, Administrative Coordinator
Lois A. Leak, Administrative Assistant
Linda Joyner, Administrative Secretary
* From January 1988
** Until January 1988
1V
WILLIAM F. MILLER
President and Chief Executive
Officer
SRI International
ALAN J. PERLIS
Eugene Higgins Professor of
Computer Science
Yale University
HENRY M. RIVERA
Partner
Dow, Lohnes and Albertson
ERIC E. SUMNER
Vice President, Operations
Planning
AT&T Bell Laboratories
GEORGE L. TURIN
Professor of Electrical Engineering
University of California, Berkeley
KEITH W. UNCAPHER
Vice President of The.CQrporation
for National Research Initiatives
Associate Dean of Information
Sciences
University of Southern California
ANDREW J. VITERBI .
Chief Technical Officer
Qualcom, Inc. .
Professor of Electrical Engineering
University of California-San Diego
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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 midterm 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. The deputy
director noted that the focus of the DLA's modernization program encompasses
its basic logistics processes such as materiel management, logistics data
management, contract administration, and the procedural and systemic
deficiencies that limit productivity and level of support to the military
services. To correct deficiencies and provide needed additional capability,
the DLA embarked on an agency-wide program to modernize its logistics systems
and the supporting automatic data processing and telecommunications
resources. In order to ensure that the program's goals are sound and the
plans executable, the NRC was asked to conduct an independent review and
assessment that addresses technical and management issues, functional
processes, and the supporting strategies being considered.
At the outset of our review, we noted that the concepts for the LSMP were
still being developed. The agency had just undertaken a formal program to
conduct a structured analysis of its businesses based on its requirements.
Therefore, the initial focus of our study has been on the management and
planning issues that confront the DLA during this formative stage of its
modernization program. In this report, we identify what we believe are the
major factors that can adversely affect the success of the program. In the
second term of our study we expect to review the detailed plans and
requirements that are developed from the DLA's business planning process and
program approval efforts.
A study such as this one requires the gathering and assimilation of a
great deal of information during the course of the review. It was clear to us
that if the analysis and advice were to be useful, it had to be based on a
thorough understanding of the purposes and procedures of the DLA, as well as
on some knowledge of the capabilities and resources available to the agency.
In this regard we relied upon and received excellent support and cooperation
from the DLA, and we wish to acknowledge the encouragement and receptiveness
of Lieutenant General Vincent M. Russo, director, DLA. We also wish to
acknowledge the contributions of the DLA staff who briefed us and responded to
our many questions. We especially appreciate the thoughtful contributions of
Mr. Roger C. Roy, assistant director (Policy and Plans), DLA, and the support
of those in the program management office.
My personal thanks go, as well, to the members of the NRC committee. They
have given a substantial amount of their time, gratis, over the past year on
this review. They have traveled to many DLA locations for on-site reviews, as
well as spending a full week to develop this report. All of us on the
committee are also grateful to the very competent NRC staff. In particular,
Anthony M. Forte, senior staff officer, has done an outstanding job throughout
the life of the committee in all ways that give unity and aid progress, from
interface with DLA to preparation of minutes. John Richardson, director of
the Board on Telecommunications and Computer Applications, of the NRC has
given valuable advice to the committee proceedings. The committee looks
forward to continuing the second phase of the study.
Robert P. Clagett, Chairman
Committee on Review of Defense
Logistics Modernization
v
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CONTENTS
1 EXECUTIVE SUMMARY.
Major Findings and Recommendations / 1
Goals and Objectives for the Defense Logistics Agency / 3
Looking Ahead
_ O ~ / 4
2 INTRODUCTION.
Reference / 6
3 THE DEFENSE LOGISTICS ENVIRONMENT.................................
4 THE LOGISTICS SYSTEMS MODERNIZATION PROGRAM:
AN OPPORTUNITY FOR EXCELLENCE _
Building the Foundation / 11
Management and Organization / 13
Integrated Materiel Management
Contract Administration / 19
Technology Issues
References / 25
/ 21
/ 16
5 ASSES SMENT OF PROGRESS , 27
Program Approval and Critical Enhancements / 27
Management of the Logistics Systems Modernization
Program / 29
APPENDIXES
A
B
C
D
E
Statement of Task / 33 .
List of Presentations to the Committee on Review of Logistics
Systems Modernization for the Defense Logistics Agency /35
List of Critical Baseline Enhancements / 39
Glossary of Acronyms / 41
Operations and Existing Automation Systems / 43
V11
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