Defense logistics agency
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DEFENSE LOGISTICS AGENCY. VADM Keith Lippert, SC, USN Director, Defense Logistics Agency. Discussion Framework. DLA Top Five Priorities DLA Business What We Were What We Are Today What We Are Going To Be … DLA Transformation Summary. Top Five Priorities. Support to the Warfighter

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Defense logistics agency

DEFENSE LOGISTICS AGENCY

VADM Keith Lippert, SC, USN

Director, Defense Logistics Agency


Discussion framework

Discussion Framework

  • DLA Top Five Priorities

  • DLA Business

  • What We Were

  • What We Are Today

  • What We Are Going To Be …

    • DLA Transformation

  • Summary


Top five priorities

Top Five Priorities

  • Support to the Warfighter

  • Agency Transformation

    • Business Systems Modernization

  • Corporate Climate

  • “New Normal”

  • DPO Partnership


Discussion framework1

Discussion Framework

  • DLA Top Five Priorities

  • DLA Business

  • What We Were

  • What We Are Today

  • What We Are Going To Be …

    • DLA Transformation

  • Summary


The dla enterprise

The DLA Enterprise

Scope of Business

FY 02 Sales/Services: $21.5B

FY 03 Sales/Services: $25B

FY 04 Projection: $28.9B

  • 45,000 Requisitions/Day

  • 8,200 Contracts/Day

  • #55 Fortune 500 – Above Northrop Grumman

  • #2 in Top 50 Distribution Warehouses

  • 23 Distribution Depots

  • 4.6 Million NSNs

  • 24.7M Annual Receipts and Issues

  • 1411 Weapon Systems Supported

  • 147.7M Net Barrels Fuel Sold (FY 03)

  • $12.5B Annual Reutilizations/Disposals

  • Land/Maritime/Missiles: $ 2.7B

  • Aviation: $ 3.3B

  • Troop Support: $10.2B

  • Energy: $ 5.2B

  • Distribution: $ 2.2B

  • Other: $ 1.4B

Foreign Military Sales

  • Sales: $719M

  • Shipments: 580K

  • Supporting 124 Nations

People

  • 21,468 Civilians

  • 525 Active Duty Military

  • 636 Reserve Military

  • Located in 48 States/28 Countries


Dla transition leaner more productive

DLA Transition… …Leaner…More Productive

From ‘01-’04, Sales and Services

grew by 70%...

Billions of Dollars

Of Sales/Services

…while personnel levels fell to their lowest since 1963 …12% below DPG

Civilian & Military Personnel

(# In Thousands)


How we did it

How We Did It

  • More stable financing (no hold tables)

    • Reduced volatility in workload

  • Better collaboration with customers and suppliers

    • Improved forecasting and delivery

  • More long-term contracts with suppliers

  • Increased reliance on more highly automated strategic distribution centers

  • Shorter administrative lead times through process improvements

    • Shifting from manual to automated buying procedures

  • A-76 process for non-inherently governmental positions

    • MEO or contractor levels of support


Supply availability hardware items

Supply AvailabilityHardware Items

Navy SA of 90.1% - highest in over 20 years.

Percent

Net Demands (M)

Operation Iraqi Freedom

DLA Total

DOD Supply Availability Goal: 85%

DLA Navy


Backorders hardware total

Backorders – HardwareTotal

Navy Backorders at record lows

Thousands

Operation Iraqi Freedom

Lowest In DLA History


Backorders 180 days hardware

Backorders > 180 Days Hardware

Thousands


Improving performance backorder delay time reductions

Improving Performance Backorder Delay Time Reductions

Average Backorder Time (in Days)


Linking dla backorders to critical parts missing in aircraft

Linking DLA Backorders to Critical Parts Missing in Aircraft

Total DLA Navy Backorders Relationship to Critical Parts Missing in Naval Aircraft

Total Navy Backorders for DLA Parts

Mission Critical Parts Missing per Naval Aircraft

Data Source for Holes in Aircraft: Center for Naval Analysis (CNA) – POC Mr. Craig Goodwyn

* A critical part is defined as a part causing a NMC or PMC aircraft


Cost recovery rates over time

Cost Recovery Rates Over Time

(Operating Costs as a Percentage of Total Sales)

CRR %

Lowest Cost Recovery Rate in DLA History

Percent

Savings Returned to Warfighter


Returning dollars to the warfighters

Returning Dollars To The Warfighters

Returning Dollars to the Warfighters

FY 04-09 Net Savings - $1.8B

($M)

Competitive Sourcing Business Systems Modernization

Customer Relationship Management Shift to Commercial Practices

Near-Term Investment…Long-Term Savings


Discussion framework2

Discussion Framework

  • DLA Top Five Priorities

  • DLA Business

  • What We Were

  • What We Are Today

  • What We Are Going To Be …

    • DLA Transformation

  • Summary


Dla what we were

DLA ...What We Were

  • Large Wholesaler

    • Internally Focused Metrics

    • Little Customer Interface

    • Poor Reputation

  • Antiquated IT Systems and Business Processes

    • Slow, 1960’s vintage batch processing

    • Business practices dictated by systems

  • Large Inventories … "Just-In-Case"

    • Overlap with commercial sector

      • Food, Clothing and Medical Inventories

  • Too Costly


What we were customer assessment

What We Were…Customer Assessment

Summer 2001: 3 and 4 Star Flag Conference

Customer Feedback:

"DLA takes too long to provide material and DLA costs too much"

What we did ….

  • Improve supply availability … Reduce wait time …

  • Drive down backorders - Improve Readiness

  • Reduce costs - Contingency Support

  • Strategic and Business Plan Developed

  • Enterprise System Modernization - Changed Culture

ACTION

TRANSFORMATION


Discussion framework3

Discussion Framework

  • DLA Top Five Priorities

  • DLA Business

  • What We Were

  • What We Are Today

  • What We Are Going To Be …

    • DLA Transformation

  • Summary


What we are today focused on customer

What We Are Today…Focused on Customer

  • Combatant Command Liaison Officers:

    • Inside Joint Staff J4, EUCOM, PACOM, CENTCOM, TRANSCOM, SOUTHCOM/STRATCOM, JFCOM & NORTHCOM

      • Provide Planning, Contingency, and Single POC for DLA Logistics Support

  • DLA Contingency Support Teams

    • Deploy with Force as Requested by Combatant Commanders

      • Provides On Site DLA Logistics, Asset Visibility Support

    • Bosnia, Kosovo, Croatia, Kuwait, Iraq, and Uzbekistan Today

  • Customer Engagement Strategy

    • National Account/Customer Account Managers, Customer Service Reps (CSR)

      • CSR is single POC for DLA Logistics at 71 Major Service Locations Globally

    • Performance Based Agreements with Each of the Four Services

      • Establish Customer-focused Performance Metrics

      • Set Agenda for Logistics Initiatives

      • Establish a Partnership Council for Continuous Interaction


Focused on customer dla europe pacific

Focused on Customer:DLA Europe - Pacific

  • DLA Overseas Commands Supporting EUCOM and PACOM

    • Standing Up DLA Southwest Asia Next Year

  • Single Focal Point for all Combatant Commander's Support Issues

  • Customer Support and Lead Center Representation

  • Lead for Theater Contingency and Exercise Planning

  • Commands DLA Contingency Support Teams

  • Provides Director with a Single Touch Point for all DLA Support Issues in Theater


What we are today moving towards transformation

What We Are Today…Moving Towards Transformation

  • Refined Goals and Metrics

  • Instituted Robust Performance Reviews

  • Focused on Backorder and Cost Reductions

  • Streamlined Procurement Processes

  • Fully supported by DOD leadership

    • Requirements Fully Funded

  • Deployment and Distribution Operations Center (DDOC)


Centcom ddoc cddoc

CENTCOM DDOC(CDDOC)

  • Collaboration

    • Customers and lift-providers share information and explore solutions to theater logistics problems

  • Visibility & Synchronization of Cargo and Passengers

    • Experimented with ITV/TAV to improve visibility

  • Forecasting

    • Enabling CFLCC and CJTF-7 to synchronize war-fighter support

  • Internet/Portal Technology

    • Central repository for theater distribution information

  • Process Improvements

    • Theater Retrograde, Task Force Express

  • Metrics to be refined

  • Process changes to be incorporated into Joint and Service Doctrine

  • DDOC being considered for support in other theaters


Discussion framework4

Discussion Framework

  • DLA Top Five Priorities

  • DLA Business

  • What We Were

  • What We Are Today

  • What We Are Going To Be …

    • DLA Transformation

  • Summary


Dla tomorrow transformation strategy

DLA Tomorrow…Transformation Strategy

  • 10 Major Transformational Initiatives

  • $1 Billion+ Investment Committed

  • $1.8 Billion Net Savings Committed for Return To the Services

  • Agency’s Core Business Model

    • Support to Services – driven by future requirements

    • Suppliers – manager and integrator

    • Supply Chains – effective, efficient and seamless Partner

  • End-to-end internal overhaul

  • Collaborating with Services, Agencies and Combatant Commanders


  • Defense logistics agency

    Returning $1.8 Billion to the Services

    The Transformation Roadmap

    Business Systems Modernization

    Plus

    A-76

    &

    BRAC 2005

    National Inventory Management Strategy

    Dynamic Materiel Positioning

    Forward Positioning

    Customer Relationship Mgmt

    Executive Agent: fuels-subsistence

    Supplier Relationship Mgmt

    Work Force Transformation

    Integrated Data Environment

    Fuels Automated System

    1998

    2009

    12


    Defense logistics agency

    Sales $.3B to $3B

    Users 390 to 1260

    Line Items 170 k to 250k

    = System Functionality

    = Users and Materiel

    = Full Operating Capability

    BSM Schedule

    BSM Schedule

    FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006

    2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3

    Release

    Two

    Release

    One

    FOC

    BPR

    Design, Build, Test

    Release 1.2

    C&T,

    Legacy Procurement Solution (Retire PD2)

    BW 1.2

    Release 1.1

    -

    Subsistence

    (Retire Legacy System) BDUs

    Business Warehouse BW 1.1

    Release 2.0

    -

    Core

    Phased Roll-out Line Items & Personnel

    Release 2.x

    - Enhanced

    IOT&E


    Discussion framework5

    Discussion Framework

    • DLA Top Five Priorities

    • DLA Business

    • What We Were

    • What We Are Today

    • What We Are Going To Be …

      • DLA Transformation

    • Summary


    Summary

    Summary

    • Critical Combat Enabler … Light and Agile

    • Focused on Improved warfighter support and reduced costs

      • 32.8% reduction in backorders and improved readiness (since Oct 01)

      • 51% decrease in cost recovery rates

      • $1.8B back to services FY 04-09

    • Strong Support to OIF

    • CDDOC Improving Flow of Supplies and Personnel

    • Record Setting Support with Demand at Historic Highs

    • DOD Leader In Enterprise System Transformation

    Tomorrow’s vision … smaller, more efficient, leveraged with best business practices


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