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integrating systems is data strategy: Our basis is motherhood and apple pie: It s to have accurate and operable data available to whoever has authorized access to it, whenever they need it. This meant a single point of entry into the logistics data enterprise, as opposed to all the point-to-point interfaces provided by the legacy systems. The DoD accomplished this in a test case with the Joint Strike Fighter. It s a matter of transparency: access to accurate data as the weapon moves through its life cycle, says Faught. The work of Faught s group evolved into an enterprise integration toolkit that has wide applicability beyond logistics: It s a framework for how anyone can develop the business case, how you can select and do contracts with the integrators and the commercial off-the-shelf (COTS) software vendors, how you can do your blueprinting, how you can map the whole life cycle of this process or of that project, says Faught. In it, you have an entire set of compliance criteria tied back to all the architecture products at the component level.
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The DLA has built on the work of Faught s group and its integrate the enterprise mandate. As Admiral Lippert explains, DLA runs on a system called the Standard Automated Materiel Management System (SAMMS). It s a system that was designed in the 1960s and implemented in the early 1970s. SAMMS is written in COBOL, and it has about 6 million lines of code associated with it. It s probably five generations behind the systems at world-class private-sector companies. The DLA tried on five different occasions to replace the system and failed five different times, according to Lippert. So we re now on our sixth attempt to replace it, and this time we re going to succeed, he asserts. The new system went up in August 2003, with 170,000 of the 4.6 million items the DLA handles, on a SAP backbone solution, an enterprise resource planning system that s being customized for the DLA s volume and requirements. SAP is the core for financial management and requisition fulfillment, but the DLA is using an application from Manugistics as a bolt-on for demand planning, and a separate system, called the Procurement Desktop 2 (PD2), for procurement. Collectively, this is the biggest development in our business in 34 years, says Lippert. I think we re on schedule for the new system to pay for itself by 2008 or 2009 through fewer IT people, reduced inventories, better forecasting, and better data accuracy than we ve ever had before. Lippert speaks proudly of the executive information system that has been instituted at DLA as well: I get a daily update of key statistics on
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U.S. DEPARTMENT OF DEFENSE PROFILE: Making the Tail Smaller and the Tooth Stronger 177
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my PC, as does the entire management team. The results are color-coded: red, yellow, or green, depending on whether we re on plan, or behind plan, or starting to fall behind plan. One of the first things I do in the morning, after I get through my e-mails, is click onto this thing and find out exactly how we did yesterday. The DLA handles 45,000 requisitions and issues 8,000 contracts a day, on average. To improve its performance, it has simultaneously embarked on programs of strategic distribution, competitive sourcing, and strategic supplier alliances in addition to business systems modernization. Are the programs working And if so, how well The agency is is aggressively implementing performance metrics and benchmarking to answer these questions. DoD always has struggled with what metrics the staff should be looking at to measure performance within the logistics operation. It realizes that it s important to get the right metrics the transformational metrics so the current effort is to develop what s called a balanced scorecard. The Joint Logistics Board is working together to finalize the metrics to implement this scorecard. The bottom-line results are already impressive: By paying attention to the metrics and taking corrective actions, the DLA has reduced its back orders by 22.2 percent since October 2001 and has achieved the lowest cost recovery rate (operating costs as a percentage of total sales) in its history. The agency is also operating at close to an all-time low in terms of personnel just under 22,000 people versus an all-time high of three times that from 1989 to 1992. We re working to improve the tooth-to-tail ratio, notes Lippert.
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