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before. It s being organized differently because more horizontal processes are being instituted incrementally. The end state will be the largest enterprise system in the world. It is designed to be more flexible, transparent, and simultaneous to be an agile infrastructure. It will, in itself, be a lean, mean fighting machine. It won t get there overnight, but the FLE has been the launching pad for total transformation. Unfortunately, the DoD cannot mimic the private sector in transforming its supply chain to effect these changes, for the scope and significance of its activities and obligations vastly exceed those of any private enterprise. It must answer to changing legislative mandates and, unlike private enterprise, to the changing mandates of different presidential administrations. Its very motive readiness or preparedness rather than profit forces it to cope with logistical complexities and uncertainties unknown to private business.
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The FLE defines three drivers of change:
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Total life cycle systems management. This type of management is well established among manufacturers of complex products and among advanced industrial users of complex, mission-critical capital equipment but not so developed in the military. End-to-end distribution. This initiative is aimed at providing faster and more reliable delivery by synchronizing the flow of materiel across the entire supply chain from factory to foxhole. It calls for breaking down the barriers and seams between the stovepipes or silos among the organizations involved in demand planning, acquisition, sourcing, positioning, and transportation (e.g., DLA, and the U.S. Transportation Command, or TRANSCOM, etc.). This may well be the biggest challenge of the plan. Enterprise integration. All the aforementioned initiatives require the close integration of information systems and processes among all the entities in the national defense supply chain. DoD must have interoperable information systems that deliver comprehensive operational data, aggregated information, and logistical situational awareness.
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These initiatives obviously have far-reaching consequences for logistics, personnel, weaponry, technology, and supplier relationships through-
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U.S. DEPARTMENT OF DEFENSE PROFILE: Making the Tail Smaller and the Tooth Stronger 173
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out the DoD for the components (i.e., the Army, Navy, Air Force, and Marines), as well as for the policy-making offices. As Morales describes it, We must build processes from the supplier base (both public and private) through the distribution agents to enable rapid movement of materiel. We must collaborate and build partnerships with industry to achieve this responsive, end-to-end delivery capability. This involves real-time information and tools such as radio frequency identification (RFID) tags to track assets and more accountability and integration in the lifetime support of weapons systems.
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Transformation at the DLA
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Execution will not be for the faint of heart. With its nearly A case in point is the Defense Logistics $25 billion in sales Agency (DLA). The DLA has served for over four decades as the DoD s logistics and services for combat support agency. With its nearly fiscal year 2003, $25 billion in sales and services for fiscal year 2003, it would occupy the no. 65 spot the DLA would on the Fortune 500, just ahead of New York occupy spot no. 65 Life. The agency operates in 48 states and 28 foreign countries and is staffed by on the Fortune 500. 21,000 civilian and 500 military personnel. We run the world s largest warehouse distribution system, says Vice Admiral Keith W. Lippert, the DLA s director. We also run a defense energy support center that supplies all the fuel for the Department of Defense. We run a national defense stockpile composed of strategic materials that we gradually sell into the market if they re not needed. The stockpile is big enough that we have to watch the world markets, because we can end up affecting world prices through our volume of sales. Admiral Lippert addresses the shift in thinking as it affects his agency: DLA was put together to manage consumable items that were common to all the services. What DLA did and this dates back to 1962 was to buy material, put it in a warehouse, and then basically say to its customers, OK, I bought it, so you had better come get it. The shift we re going through right now is toward understanding our customers requirements and being responsive to them, even when there are problems in the industrial base [that affect us]. In other words, the DoD is extending the supply chain to include the customer s customer and the supplier s supplier.
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