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Overview of RAND’s Supply Chain Management Research. Supply Chain Risk Leadership Council Nancy Moore and Elvira Loredo October 8, 2008. Outline. Overview of RAND DoD’s supply chain challenges RAND’s supply chain research. What Is RAND?.

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Overview of rand s supply chain management research

Overview of RAND’s Supply Chain Management Research

Supply Chain Risk Leadership Council

Nancy Moore and Elvira Loredo

October 8, 2008


Outline
Outline

  • Overview of RAND

  • DoD’s supply chain challenges

  • RAND’s supply chain research


What is rand
What Is RAND?

  • An independent, nonprofit research institution founded in 1947 by the Air Force to preserve the war effort of scholars

  • A producer of multi-disciplinary, quantitatively oriented research

  • A tackler of large, complex problems

  • A center for education and training in policy analysis


We are guided by our
We Are Guided by Our . . .

  • Charter

    “To further and promote scientific, educational, and charitable purposes, all for . . . public welfare and security of the United States.”

  • Mission

    To help improve policy and decision-making through research and analysis

  • Core values

    Quality and objectivity

  • Vision

    To be the world's most effective and trusted global provider of research and analysis


Rand has evolved to meet new needs for research and analysis
RAND Has Evolved to Meet New Needsfor Research and Analysis

Research

person years

600

500

National security

400

300

Domestic and international

200

100

0

1940s

1950s

1960s

1970s

1980s

1990s

2000s

Project RAND formed by

USAAF at

Douglas

Aircraft

First

non-USAF study

RAND Graduate School established

Project RAND becomes Project AIR FORCE FFRDC

RAND Europe andScience and Technology Policy Institute formed

RAND-Qatar Policy Institute opened

RAND

Gulf States Policy Institute opened

The RAND Corporation formed

First work for OSD, civil agencies

Domestic Research Division formed

Army and OSD FFRDCs formed

First sustained work in private sector


Our research is typically characterized by
Our Research Is TypicallyCharacterized by . . .

Issues that involve:

  • Competing objectives and perspectives

  • Intersection of public/ private interests

  • "Messy" data, major uncertainties

  • Implications for the future

An analytic approach that is:

  • Integrative, collaborative, and multidisciplinary

  • Empirical, with technical depth and methodological rigor

  • Innovative, but informedby past findings

  • Buttressed by demanding standards of quality and objectivity

RAND strives to build long-term

relationships with its clients


Rand s key resource is its 737 member professional research staff
RAND's Key Resource Is Its 737 MemberProfessional Research Staff

Degree Discipline

Degree Level

No degree

1%

None 1%

Other 1%

Arts and letters

Social sciences

Behavioral

sciences

5%

8%

Political science and international relations

11%

Bachelors

11%

12%

Business

and law

Masters

30%

11%

Policy analysis

8%

Computer

sciences

3%

3%

Doctorate

57%

Physical sciences

12%

9%

Math, operations research, statistics

Economics

7%

10%

Life sciences

Engineering


Rand s customers
RAND’s Customers

  • Defense

    • Air Force, Army, Navy, Marine Corps, Defense Logistics Agency, U.S. Transportation Command, Office of the Secretary of Defense

  • Other federal government

    • Department of Health and Human Services, Department of Justice, Department of Homeland Security, National Science Foundation, …

  • State and local governments

    • State of California, City of Los Angele, …

  • Foundations

    • Pew, McArthur, Robert Wood Johnson, …

  • Companies


All rand department of defense research is conducted by ffrdcs
All RAND Department of Defense Research Is Conducted by FFRDCs

  • Congress est. 36 Federally Funded Research and Development Centers

  • Long-term contracts to

    • ensure independence

    • encourage long-term engagementon key issues

  • Source: FAR. FFRDCs ...

  • Access to Government and supplier data, including sensitive and proprietary data, and to employees

  • Required to operate in the public interest with objectivity and independence

  • Free from organizational conflicts of interest

  • Not ... use its privileged information or access ... to compete with the private sector

10 DoD FFRDCs, RAND has 3

IDA

CNA

NDRI

PAF

Arroyo Center

Engineering &Technology Development

Studies &Analysis


Outline1
Outline FFRDCs

  • Overview of RAND

  • DoD’s supply chain challenges

  • RAND’s supply chain research


A significant portion of dod s budget goes to external providers
A Significant Portion of DoD’s Budget FFRDCsGoes to External Providers

DoD Total Obligation Authority (TOA) ($B)

178

14

354

34

347

40

380

50

447

76

341

86

368

142

520

276

472

291

364

254

364

287

618

604

(Constant FY 2008 Dollars)

(Nominal Then-Year Dollars)

100

90

80

70

60

50

Percent

40

30

20

10

0

Source: OUSD(Comptroller), National Defense Budget Estimates for FY 2009, March 2008, Tables 6-1 and 6-2 http://www.dod.mil/comptroller/defbudget/fy2009/fy2009_greenbook.pdf

NOTE: Data in Constant FY2008 Dollars.


DoD Purchases, Operates, Repairs, Modernizes, and Overhauls Weapons - It Does Not Make Them

Goods

and

services

Supply

Base

Customers

Weapon

Systems

Enterprise

Air Force

Army

Navy

Marine Corps

Central Command

Pacific Command

Manufacturing

Assemblies,

Sub-components,

Parts

Products

Purchasing

Logistics

Avionics

Supply Chain

Returns


Military supply chain management faces unique challenges
Military Supply Chain Management Weapons - It Does Not Make ThemFaces Unique Challenges

  • Operating environment

    • Often austere, hostile environments

    • Requires rapid response anywhere in the world

    • Unpredictable and widely varying operational tempo

    • Very wide range of material

    • Wide array of expensive service parts, many with low and highly variable demand

  • Business environment

    • Benefits / outcomes not measured in monetary terms

    • Fixed, annual budgeting, regardless of potential project ROI

    • Political constraints


Dod is adopting adapting commercial best practices where appropriate
DoD Is Adopting/adapting Commercial Best Practices Where Appropriate

  • Converting repair depots to lean operations

  • Applying Six Sigma to processes

  • Outsourcing some non-core functions

    • Performance Based Logistics (PBL) arrangements

    • Contractor Logistics Support (CLS)

  • Adopting some best practices in purchasing and supply management


Outline2
Outline Appropriate

  • Overview of RAND

  • DoD’s supply chain challenges

  • RAND’s supply chain research


Our dod research has spanned the breadth of supply chain management
Our DoD Research Has Spanned the Breadth of Supply Chain Management

  • Inventory management

  • Distribution network design and management

  • Database integration and metrics development

  • Process improvement

  • Purchasing and supply management

  • Demand surge planning

  • Transfer pricing and financial management

  • Product design for supply chain

  • Fleet management

  • Outsourcing analyses


Examples of logistics research
Examples of Logistics Research Management

  • Helped military adopt lean thinking and dramatically improve the order fulfillment process

  • Developed integrated global distribution database and metrics now used to control and improve the system

  • Helped minimize total costs through improved global inventory positioning based upon the tradeoffs among inventory, transportation, and material handling costs

  • New inventory approaches to better handle the Army’s low, sporadic demand problem

  • New strategies to better leverage global distribution network capacity in contingency operations

  • Methods for determining what to position where to improve responsiveness to global contingencies


Purchasing and supply management psm research
Purchasing and Supply Management (PSM) Research Management

  • Began with a request to help the Air Force develop a strategic approach to competitive sourcing

    • Looked to the commercial sector for lessons

    • Account for differences in missions, personnel rules, and legislative and regulatory constraints

  • Broadened research focus to support efforts to improve “recontracting” activities

    • Emphasis on services acquisitions

  • Tracked revolution in commercial sector purchasing and supply management practices

  • Brought lessons to the Air Force and participated extensively in implementation activities

    • Pioneered the use of spend analysis in the Air Force

    • Provided important contributions to the area of performance based services acquisition

  • Expanded to other Services and agencies


Supply chain policy center
Supply Chain Policy Center Management

  • New research center focused on the challenges facing the global supply chain to include

  • Effects of supply chain disruptions and shifting trade patterns

  • Identifying physical, operational, regulatory, and legal freight transport system vulnerabilities

  • Public and private sector implementation strategies to improve the freight transport system

  • Opportunities for advanced technologies to play a role in addressing critical issues, such as security, enhanced productivity, and environmental mitigation


What rand brings to the scrlc
What RAND Brings to the SCRLC Management

  • Knowledge of DoD’s supply chains

    • Legacy processes, practices, systems

  • Advanced operations research/analytics

  • Multidisciplinary skills/approach

  • Expertise in

    • Product/aftermarket support

    • Influencing policy makers

    • Synthesizing best practices and adapting/adopting them in a government setting


Key milestones in rand paf pscm research
Key Milestones in RAND PAF PSCM Research Management

1997 - Began SAF/AQC sponsored study of best PSCM practices

Case for change, market research, supply strategy development, services contracting, low demand items, measuring PSCM benefits, performance-based supplier relationships, Supplier Relationship Management (SRM), Supply Chain Risks,…

1999 – Pioneered spend analyses in AF and DoD

Gained senior

leadership

support

2005 – Briefed Gen Carlson, AFMC/CC, Commander’s Conference on Leading Successful Change

2004 – Briefed Gen Martin, AFMC/CC - directed PSCM implementation across AFMC Commodity Council’s, Supplier Relationship Management (SRM) established

2001 – Began support of F100 PSM Pilot

2001 – Briefed Dr. Roche, SAF, & Gen Ryan, CSAF


Supply chain risk leadership council scrlc
Supply Chain Risk Leadership Council Management(SCRLC)

“Bring industry luminaries together to advance the discipline of Supply Chain Risk Management through best practice sharing and collaboration around specific objectives such as supplier relationships, risk metrics, and risk methodology”

“Driving thought leadership and best practices”

No industry-standard metrics exist for measuring supply chain risk, including supply chain resiliency. Cisco is working with leading companies in an effort to develop standard metrics and best practices.


Scrlc members

Cisco Management

Toyota

Boeing

FedEx

P&G

Nokia

Jabil

Zurich

tsmc

Bank of America

Department of Homeland Security

Stanford University

Michigan Ross School of Business

SCRLC Members


About rand
About RAND Management

  • RAND: A private, non-profit research institution founded in 1947 by the Air Force to preserve the war effort of scholars

  • Mission: Helping to improve policy and decision-making through research and analysis

  • Values: Quality, objectivity, independence

  • Strengths

    • Multi-disciplinary teams

    • Large, complex problems

    • Number crunching


Principal research areas
Principal Research Areas Management

Children

and

Adolescents

Transportation

and

Infrastructure

  • Providing practical solutions to complex problems

  • Supporting evaluation and implementation

  • Enhancing policy debates

  • Training future policy analysts

  • Improving knowledgeand analytic methods

Terrorism

and

Homeland

Security

CivilJustice

Substance

Abuse

Education

Scienceand

Technology

Energy

and

Environment

Public

Safety

Health and

Health Care

PopulationandAging

International

Affairs

U.S.

National

Security


Research areas related to supply chain risk
Research Areas Related to Supply Chain Risk Management

Children

and

Adolescents

Transportation

and

Infrastructure

  • Providing practical solutions to complex problems

  • Supporting evaluation and implementation

  • Enhancing policy debates

  • Training future policy analysts

  • Improving knowledgeand analytic methods

Terrorism

and

Homeland

Security

CivilJustice

Substance

Abuse

Education

Scienceand

Technology

Energy

and

Environment

Public

Safety

Health and

Health Care

PopulationandAging

International

Affairs

U.S.

National

Security


A matrix organization supports disciplinary affiliations and cross rand research

RAND Management

Project

AIR

FORCE

ArmyResearch Division

RAND Arroyo Center

RAND

Institute for Civil Justice

RAND

Education

Pardee

RAND Graduate School

RAND Europe

RAND Labor

and

Population

RAND Gulf States Policy Institute

RAND

Health

RAND National Security Research Division

National Defense Research Institute

A Matrix Organization Supports DisciplinaryAffiliations and Cross-RAND Research

Board of Trustees

President and Chief Executive Officer

Executive Vice President

Research Staff Management

RAND-Qatar Policy Institute

  • Behavioral and Social Sciences

  • Economics and Statistics

  • International and Security Policy

  • Management Sciences

  • Policy Sciences

  • Technology and Applied Science

RAND Infrastructure, Safety, and

Environment


Rand s training programs are integral to our research
RAND's Training Programs Are ManagementIntegral to Our Research

  • Military Fellows

  • Graduate student summer associates program

  • Pre-and post-doctoral programs

  • Professional development programs for minority scholars


Where rand s presence is increasingly global

Headquarters Management

Other offices

Field sites

Where:RAND's Presence is Increasingly Global

Pittsburgh

Moscow

Jackson

Cambridge

Washington DC

Langley AFB

Doha

Santa Monica

New Orleans


Rand conducts dod supply chain research as part of broad research programs 1 of 2
RAND Conducts DoD Supply Chain Research Managementas Part of Broad Research Programs (1 of 2)

  • Arroyo Center

    • Strategy, Doctrine, & Resources

    • Force Development & Technology

    • Logistics

    • Manpower & Training

  • Project AIR FORCE

    • Aerospace Force Development

    • Manpower, Personnel and Training

    • Resource Management

    • Strategy and Doctrine


Rand conducts dod supply chain research as part of broad research programs 2 of 2
RAND Conducts DoD Supply Chain Research Managementas Part of Broad Research Programs (2 of 2)

  • National Security Research Division (also includes non-DoD research outside of NDRI)

    • National Defense Research Institute (NDRI): OSD, Joint Staff, Combatant Commands, the defense agencies, and the Navy

    • Research Centers

      • International Security and Defense Policy

      • Acquisition and Technology Policy

      • Forces and Resources Policy

      • Intelligence Policy

    • International Programs: Asia-Pacific, Middle East, Russia and Eurasia, Long-Range Global Policy

    • Programs: Maritime, Military Health, Counterterrorism


Dod has large complex supply chain challenges
DoD Has Large, Complex Supply Chain Challenges Management

  • Breadth of goods purchased

    • Boots, bullets, fuel, food, weapons

  • Many different types of weapons

    • Guns, trucks, tanks, helicopters, missiles, fighters, bombers, tankers, unmanned aerial vehicles

  • Broad range of technology

    • Very old, low technology to very new, high technology

  • Highly variable/sporadic parts and repair demands

  • Customers deploy and move

  • Supply chain a target in contingencies

  • Changing geopolitical environment

  • Political constraints on funding, purchasing, outsourcing, reallocating resources


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