2006 Acquisition Initiatives - 2

DLA's Aviation Supply & Demand Chain ManagerDLA's Aviation Supply & Demand Chain Manager

Base Realignment and Closure2005

BRAC Implementation and Transition Office

Stephen Mason


2

• Mission – • Support to the War Fighter• Distribution Process Owner

• Transformation – • Enhanced Capabilities for the Future War Fighter

• People – • Transforming Our Human Capital and the Workplace

• Alignment – • To War Fighters…To Supply Chains

• One Enterprise – • Seamless Partnering for War Fighter Logistics Support

Top Five Priorities

BRAC – The Agency’s13th Transformation Initiative


3

DLR Procurement Management Consolidation

(Consumable Item Transfer)

NPV $1.9 B Over 20 years

Commodity Privatization

BRAC 2005 DECISIONS

Supply, Storage & Distribution Management Reconfiguration


NPV $.74 B Over 20 years


4


Decision

Transfer Procurement Management and related Support Functions for DLRs (including oversight) to DLA. All other ICP Functions remain with the Components. Relocate some Army & AF ICP Functions to preserve the Army Life Cycle Management Commands and provide for continuation of Secure Facilities.

Saves DOD $ by Leveraging all Procurement Buysand Managing them within a Single Agency!


5

Depot Level Reparable Procurement to DLA

• Leverages Full Buying Power of DoD

• One Buyer Vice Five

• Air Forces Top Five Suppliers are DLA’s Top Five Aviation Supply Chain Suppliers

• More Performance Based Contracts, Direct Vendor Delivery, Reduced Administrative Lead Time/Production Lead Time

DLR Procurement

Impacts


6

Transformational ChangeConsolidate Procurement of DLRs

• Disestablishes 3 Service ICPs through Consolidation• FT Monmouth, Ft Huachuca, Rock Island • Establishes Aberdeen as a New ICP Site

• Transfers essentially all Consumable Item Management to DLA

• Keeps Engineering Functions with Components

• Realigns Procurement Management Responsibility of Class IX Depot Level Reparables (DLRs) to DLA

• Achieves Savings Through • Reduced Inventory Investment• Leveraging Larger Purchases • Increased use of Performance Based Agreements (PBA)


7


Hill ICP

Tinker ICP

Albany ICP

Warner Robins ICP

DSCR Richmond

DSCC Columbus

NAVICP Philadelphia

Redstone ICP

Ft. Monmouth ICP

Ft. Huachuca ICP

Lackland ICP

Rock Island ICPDetroit Arsenal ICP

Soldier Sys. Center Natick

NAVICP Mechanicsburg

Aberdeen Proving Ground

DSCP Philadelphia

BRAC Disestablished ICPs

All ICPs except Lackland transfer DLR procurement and almost all consumable management to DLA


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DLR Procurement Management ConsolidationOrganizational Structure

Realigned DLR Procurement Management

Senior Procurement Executive

AviationDSCR

Su

pply

Cha

ins

Tinker AFB

Robins AFB

Hill AFB

Redstone (Aviation)

NAVICP Phil

Detroit Arsenal

MCLC Albany

Aberdeen PG MD

Redstone (Missiles)

NAVICP Mech

HQ

DL

A

LandDSCC

MaritimeDSCC

Laser Focused on Actual Procurement Process

DLR Procurement Management


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Depot Level R

epairablesD

epot Level Repairables

Dep

ot L

evel

Rep

aira

bles

Dep

ot L

evel

Rep

aira

bles

SERVICES

DLA


Airworthiness Responsibility

Tech Support Engineering

Authority Mgmt of Design

Unstable Items

Requirements Mgmt

Funding for DLRs Program Mgmt Logistics Engineering Repair of

Repairables

Stock, Store and Issue Requirements

Determination Contracting Budget / Funding Cataloging C

onsu

mab

le It

em

Tran

sfer

C

onsu

mab

le It

em

Tran

sfer

Acquisition Strategy Development MOA / MOU Host / Tenet Agreements Governance

Consum

able Item

Transfer C

onsumable Item

Transfer

HCA/SPE Contract Administration Transfer in Place of Personnel New DLR Procurements Contracting / Policies & & Procedures Labor / Materiel Reimbursed by Services

Gained Joint Collaborations

Retained

Validate Asset Levels Coordinate Contractual Information Special Program Requirements


10

Army

Leveraging Best Business Practices

Process Improvements Navy

Air Force

Marine Corps

DLA

Prime Vendor Contracts

Leverage Industrial Capability

Leverage DoD Spend

Cost Wise Readiness toWarfighter

Relationship Spectrum

Strategic Supplier Alliances

Supply Chain Alliances

Partnership Agreements

Performance Base Logistics

Corporate Contracts

Privatization


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Consumable Item Transfer

Decision

Transfer Budget/Funding, Contracting, Cataloging, Requisition Processing, Customer Services, Item Management, Stock Control, Weapon System Secondary Item Support, Requirements Determination, Integrated Materiel Management Technical Support Inventory Control Point functions for Consumable Items…(including oversight) to DLA. All other ICP Functions remain with the Components.

Saves DOD $ by Leveraging all Procurement Buysand Managing them within a Single Agency!


12

Consumable Items Transfer (CIT) to DLA

• Updates long standing CIT Initiative

• Well established Logistics Reassignment Process Exists

• Integrated Material Management Committee (IMMC) Oversees

• Nuclear, SUBSAFE, Special Program and Design Unstable Consumables excluded from CIT Consideration

• IMMC Reviewing Item Management Codes for Consumables to Transfer

Consumable Item Transfer Impacts


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BRAC 2005 DECISIONS





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Supply, Storage & Distribution Reconfiguration

Decision

Reconfigure Wholesale Storage and Distribution around Four Regional Strategic Distribution Platforms (SDPs).

Realign remaining DDs as Forward Distribution Points (FDPs) and consolidate their Supply and Storage Functions, and associated Inventories with those supporting Industrial Activities such as Maintenance Depots and Shipyards

Enhance Deployment & Sustainment of Expeditionary ForcesReduce Excess Capacity

Eliminate Unnecessary Redundancy


15

Repair Depot Supply Operations to DLA • Centralize all Depot Level Maintenance Supply, Storage and Distribution Functions

• Attrite Duplicate Industrial Inventories

• Eliminate Levels of Inventory

• Better Visibility of Demand Patterns

• Potential for Additional Infrastructure Reduction

Retail Supply Operations Impacts


16

Two New (total of four) SDPs

• One-Day High Priority Delivery

• Closer to the Customer-Shorter Line-Hauls

• Greater use of Dedicated Trucks

• SDPs Support focused on Customers within their Regions

• New Consolidation & Containerization Points (CCPs)

• New Shipping Patterns for OCONUS destined Materiel

• Greater Surge Capacity – Choke Points Eliminated

Strategic Distribution Platforms (SDPs) Impacts


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Forward Distribution Points (FDPs)Impacts

12 FDPs to Support Industrial/Local Customers

• Co-located with and Dedicated to Local Customers

• Support Highly Tailored

• Reduced Footprint

• Reduced Off-Base Materiel Flows


18

OklahomaCity

Barstow

CorpusChristi

Hill

PugetSound

San Joaquin

Cherry Point Anniston

Warner Robins

Albany Jacksonville

Susquehanna

Tobyhanna

Columbus

Norfolk Richmond

Red River

San Diego

OCONUS

Germany

Italy

Kuwait

OCONUS

Japan

Korea

Guam

Hawaii

Strategic Distribution PlatformsBRAC SDPsBRAC FDPsDistribution CenterOCONUS Distribution Center BRAC Closure

BRAC Adding Efficiency


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BRAC Adding Efficiency (Con’t)

-15.1 M sqft Warehouse Space

-23.3 M Item Cube

51.2 MillionSquare Feet

36.1 Million Square Feet

Decreased Inventory and Warehousing

Increased Support and Surge Capability

CCP X 2

CCP X 4


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BRAC 2005 DECISIONS





21

Decision

Relocate Tire Supply Contracting Function from Detroit Arsenal and Hill AFB to DSC Columbus ICP. Relocate Supply Contracting Function for Packaged POL from NSA Mechanicsburg to DSC Richmond ICP. Disestablish all other Supply Functions and all Storage and Distribution Functions for Tires, Packaged POL and Compressed Gases.

Target of Opportunity; Reduce Excess Capacity; Saves Money!

Commodity Management Privatization


22

Commodity Management PrivatizationImpacts

Commodities to DLA for Privatization

• Future Support Mechanisms, Levels, Surge Capability, etc. Addressed in Contract Vehicles

• Warehouse Stocks Attrited

• Warehouse Space Freed Up

• Non-Ready For Issue Materiel Disposed

• CONUS and OCONUS Support


23

BRAC Challenges

• Resources

• Systems Integration

• Aligning Business Models

• Wholesale/Retail Integration

• Interdependences

• Savings


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Summary

• Joint Collaborations Required

• Opportunity to Further Align by Supply Chain

• Implement Best Business Practices

• Profound Effect on DoD Transformation

Industry Support Is Critical Throughout Transformation


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Questions ? ? ?

Documents

2006 Acquisition Initiatives - 2