MLF 6-3 (April 2012)

The Publication of Record for the Military Logistics Community

U.S. Navy Naval Air Systems Command Special Pull-out supplement

Global Supplier Rear Adm. Mark F. Heinrich Commander Naval Supply Systems Command and Chief of Supply Corps

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April 2012

Volume 6, Issue 3

Exclusive Interview with:

Rear Adm. (Select) Cindy L. “CJ� Jaynes Assistant Commander, Logistics and Industrial Operations

Forward Logistics O Ranking the Supply Chain O Greening the DoD Corrosion Control O Rock Island Arsenal O Demand Planning

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Military Logistics Forum

April 2012 Volume 6 • Issue 3

Features

Cover / Q&A

Cutting the Rust Dealing with corrosion of military equipment requires huge expenditures of money and manpower. The Logistics Management Institute estimates that DoD spends $22.5 billion annually on corrosion maintenance and repair.

By Henry Canaday

4

Rock Island Arsenal Military Logistics Forum recently had the chance to interview Colonel James Fly Jr., the commander of the Rock Island Arsenal, to see what role the arsenal will have and what contributions it will make to strengthen and rebuild the Army of the future.

7

Greening the DoD DoD is the single largest energy consumer in the U.S., accounting for about 90 percent of federal use. Its fiscal year 2010 energy bill was $15 billion.

Of that, $11 billion was for operations (fuel used to power ships, aircraft, ground vehicles and generators at forward operating bases).

By Heather Baldwin

12

U.S. Navy Naval Air Systems Command Logistics and Industrial Operations

16 Rear Admiral Mark F. Heinrich Commander, Naval Supply Systems Command and Chief of Supply Corps

Special PULL-OUT SUPPLEMENT

Exclusive interview with

Rear Admiral (Select) Cindy L. “CJ” Jaynes

21

Departments

1

Assistant Commander Logistics and Industrial Operations

6

Top Critical Contracts

14 Supply Chain

Demand Planning

27 Calendar, Directory

Long gone are the days of Ouija board logistics. Today’s supply chains are managed to every detail. Being able to predict with sufficient accuracy the demand for supplies parts is becoming more critical.

By Bill Murray

2 Editor’s Perspective

Moving Logistics Forward

23

Logistics is almost always a challenge, perhaps never more so than to landlocked Afghanistan. Connecting every mode of transport has resulted in an effective supply chain.

By J.B. Bissell

Ranking the Supply Chain Industry

25

Market research looks at metrics to develop a comparable ranking of the industrial supply chain elements for the aerospace and defense market.

Gartner discusses its 7th Annual Supply Chain Top 25.

By Ray Barger Jr. and Jane Feitler

Industry Interview

28 Donald J. Wetekam Senior Vice President, Government & Defense Business Development AAR Corp.

Military Logistics Forum Volume 6, Issue 3 April 2012 Publication of Record for the Military Logistics Community Editorial Editor-In-Chief Jeff McKaughan jeffm@kmimediagroup.com Managing Editor Harrison Donnelly harrisond@kmimediagroup.com Online Editorial Manager Laura Davis laurad@kmimediagroup.com Copy Editor Laural Hobbes lauralh@kmimediagroup.com Correspondents Heather Baldwin • Peter Buxbaum • Henry Canaday • Cheryl Gerber • Leslie Shaver Art & Design Art Director Jennifer Owers jennifero@kmimediagroup.com Senior Designer Jittima Saiwongnuan jittimas@kmimediagroup.com Graphic Designers Amanda Kirsch amandak@kmimediagroup.com Scott Morris scottm@kmimediagroup.com Kailey Waring kaileyw@kmimediagroup.com

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KMI Media Group Publisher Kirk Brown kirkb@kmimediagroup.com Chief Executive Officer Jack Kerrigan jack@kmimediagroup.com Chief Financial Officer Constance Kerrigan connik@kmimediagroup.com Executive Vice President David Leaf davidl@kmimediagroup.com Editor-In-Chief Jeff McKaughan jeffm@kmimediagroup.com Controller Gigi Castro gcastro@kmimediagroup.com Administrative Assistant Casandra Jones casandraj@kmimediagroup.com Trade Show Coordinator Holly Foster hollyf@kmimediagroup.com

Operations, Circulation & Production Circulation & Marketing Administrator Duane Ebanks duanee@kmimediagroup.com Data Specialists Rebecca Hunter rebeccah@kmimediagroup.com Tuesday Johnson tuesdayj@kmimediagroup.com Raymer Villanueva raymerv@kmimediagroup.com Summer Walker summerw@kmimediagroup.com Donisha Winston donishaw@kmimediagroup.com

EDITOR’S PERSPECTIVE The United States is the only truly globally-capable military force that can project and maintain a force outside of its borders for any length of time without the good graces of others. The simple fact as to why that is possible comes down to logistics and the fact that we have the people and the resources to make that happen.

Even though logisticians have been doing logistics for a long time—all of history—there is always something to learn and something to be taught. It is clear that global logistics needs big thinkers that look beyond how best to pack a ship with stuff and push it away from the dock. We need to enhance the lines of professional logistics Jeffrey D. McKaughan Editor-IN-CHIEF education and training to develop the kind of big thinking that allows a military to sustain a force of plus or minus 90,000 in Afghanistan while the majority of the major overland lines of communications have been turned off. The answer is not always about throwing more money at an issue, but it’s about doing a whole lot of right things at the right time. Education, training, schooling and OJT can be blended into the perfect logistician.

In a different direction, we had the pleasure of interviewing Alan Estevez, assistant secretary of defense for logistics and materiel readiness, for the March issue of Military Logistics Forum. After going to print, we realized that we had not made some of the edits that we had planned on making— it is always a challenge going from the spoken word to the written word. We wanted to capture the full flavor of his comments and as such we made those edits in the online version, which is posted on our website. I encourage everyone to revisit his interview online, especially in light of his comments and the panel discussions from the NDIA Logistics Conference.

If you want to smile, search for the video called “broken escalator.” It was played during two separate sessions at the logistics conference and I’m not quite sure what the message was, except we—the collective we—do not want to become what they are.

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The silent eater of steel steals time and money.

By Henry Canaday MLF Correspondent

Dealing with corrosion of military equipment requires huge expenditures of money and manpower. Corrosion can also hamper performance of fielded assets or require taking them out of action for major clean-up efforts. The Defense Department is now making strenuous efforts to reduce the cost of rust in the future.

“There is lots of aging infrastructure and equipment, and the military must do more with less, so corrosion has gotten a higher priority in the last few years,” summarized Bill Haynes, division manager for corrosion technology at SAIC. SAIC consultant Dail Thomas cited a Logistics Management Institute estimate that the Defense Department spends $22.5 billion annually on corrosion maintenance and repair.

Navy and Marine Corps aviation incurs $3 billion in annual corrosion costs, while the Coast Guard incurs $0.3 billion. The Air Force spends $5.4 billion and the Army $2.4 billion just on ground vehicles. Navy ships add $3.2 billion to the annual corrosion bill, and Marine ground vehicles $0.5 billion. Corrosion on Army aviation and missiles cost $1.4 billion. Finally, defense facilities, infrastructure and other equipment cost $7 billion.

Congress enacted legislation in December 2002 giving the Office of the Under Secretary 4 | MLF 6.3

of Defense for Acquisition, Technology and Logistics overall responsibility for preventing and mitigating effects of corrosion on military equipment and infrastructure. Program managers for new Category I acquisitions must assemble teams of corrosion specialists during the acquisition process.

Corrosion prevention pays extremely high returns if done early, in design. Thomas said one alternative, a service life extension program, is expensive, partly because it is hard to make changes when assets have been deployed.

Designs for corrosion protection can include surface protection, cathodic protection for underwater parts, painting and advanced materials. Structural parts use steel or aluminum, which must get surface treatment to resist corrosion, Thomas said. “And when the engineers use a mix of materials, they must have a good process to mitigate galvanic corrosion.”

“Corrosion is a concern across all assets, especially today as there are fewer procurement programs on the horizon to replace legacy,” explained Matthew Koch, program manager, corrosion prevention and control (CPAC) at Marine Corps Systems Command.

Like other services, Marines are being asked to extend service lives well beyond their original equipment design. One

example is the amphibious assault vehicle (AAV-7). After cancellation of the expeditionary fighting vehicle (EFV), AAVs will continue to be used by Marines for many years to come.

CPAC supports all ground equipment in Marine Corps. Koch said his current focus is on armored vehicles and heavy combat systems, but CPAC also supports tactical and ground equipment.

Koch said corrosion challenges arise from three basic sources: design, environment and maintenance. Many current systems originated in the 1960s and 1970s, when a 20-year service life was not considered. And corrosion control must always compete with functionality in all designs, so trade-offs are inevitable.

Moreover, Marines operate in tough environments—in and around oceans, in tropical climates and other environments that promote corrosion. “It is impossible to predict where a vehicle might be used,” Koch emphasized. “Designing for every possible environment is not practical.”

Maintenance is the last chance to correct and prevent corrosion. Modern equipment has better corrosion control and requires less frequent maintenance. Legacy equipment requires bigger maintenance investment. Fortunately, reset after return from deployment allows smart investment in corrosion control and can even extend the life of equipment. www.MLF-kmi.com

Supplemental maintenance with corrosion preventative compounds is used on Marine legacy equipment in annual and semi-annual maintenance. During major rebuild or repainting programs, material upgrades can further protect equipment, but this cannot be done at operating units.

For new equipment, material selection and improved coatings enhance corrosion resistance. Koch said use of non-metallic materials helps, and isolating dissimilar metals assists in preventing galvanic corrosion. Otherwise, “the loss of one metal is accelerated by contact with a different metal.”

Coating improvements include electrodeposited coatings (e-coat) for primers, sacrificial coatings and specialty coatings that provide mechanical and abrasion resistance in addition to corrosion protection.

Designers of new equipment can also avoid creating areas that are difficult to paint, that trap corrosion-inducing contaminants or that cannot be cleaned, maintained or repaired. Designing out corrosion-prone areas improves corrosion

resistance at much less cost than future maintenance or redesign.

Koch said better storage can also reduce corrosion of current equipment.

For example, warehousing vehicles in protective shelters with dehumidification will stop almost all corrosion.

CPAC continually explores new anticorrosion technologies. But Koch said it is tough to find new technologies that fit with other equipment requirements.

Anti-corrosion technology must be compatible with chemical agent resistant coating (CARC), meet wear and grounding requirements, be usable by the organic and commercial support base and fit current maintenance philosophies for ground vehicles.

Private companies are working hard on the corrosion challenge, especially for existing equipment.

Daubert Chemical makes temporary rust preventatives to military specifications for short- or long-term protection, explained Frank Vella, director of industrial coating sales.

Short-term protection is afforded by light oil films with added rust preventatives that are easy to remove. Mid-term protection is done with grease and waxes for good protection on uncovered equipment left outdoors. Long-term protection comes from petroleum jelly and metal ions. In all, there are five grades of anticorrosion protection.

The Navy, one of the hardest challenges, uses heavier protection for cables and ship exteriors and for ships in dry dock, especially for inaccessible areas that may accumulate water.

“We have been around since 1935 and doing military specs for 25 years,” Vella stressed. About a quarter of Daubert’s business is military. Vella is seeing more emphasis on environment-friendly rust prevention and Daubert is researching water-based coatings to replace solventbased products to meet that need.

Sherwin-Williams offers a full complement of anti-corrosion products, starting with pretreatment wash primers and extending up to primer layers, according

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MLF 6.3 | 5

to Beth Ann Pearson, military product line manager.

Sherwin-Williams is a qualified supplier for epoxy primers identified in the MIL-DTL-53022E specification for fastdrying, corrosion-inhibiting epoxy primers for ferrous and non-ferrous substrates.

Components on mine resistant ambush protected vehicles (MRAPs), MRAP all-terrain vehicles and high mobility multipurpose wheeled vehicles use these primers.

The company is the first approved supplier for Type IV enhanced corrosion primer with zero volatile organic content and is an approved supplier of water-based, corrosion-inhibiting epoxy primers.

Zinc-rich epoxies were added to MILDTL-53072 in 2011 and Sherwin-Williams offers one- and two-component solventbased zinc-rich epoxy primers and several water-borne zinc epoxy primers. The twocomponent system is used on MRAPs. Finally, Sherwin-Williams supplies MILPRF-32348 powder coatings for metallic substrates.

Sherwin-Williams was the first company approved under military specifications for extended corrosion protection.

The company also offers multiple cure technologies for special application and cure challenges.

Pearson said her entire industry is working on next-generation technologies to support Defense’s Corrosion Prevention and Mitigation Strategic Plan. “There are several developmental and research programs underway focusing on wash primers and unique pre-treatment chemistries,” she said. Compact systems used in the auto industry are beginning to move into military coatings. Powder coating, in place of electro-coating, is another trend. And Sherwin-Williams is introducing epoxy aerosols, which allow for a single container application for easy touch-up and repair and perhaps even small application jobs.

PPG Industries makes coatings and engineered materials to mitigate corrosion for all the services, according to Heather Stephan, military protective coatings manager. These include pre-treatments, primers, topcoats and materials such as polyurea coatings. “We have powder coatings a variety of liquid coatings, and e-coat.” PPG provides PSX engineered Polysiloxane coatings, nearly solvent-free and with unlimited re-coatability, to the U.S. Coast Guard and Navy.

6 | MLF 6.3

For decades PPG provided coatings for the auto industry and was the first company to provide e-coat to create an encapsulating barrier between steel and elements causing corrosion. It now provides zirconium pretreatments for e-coat to the auto industry and is working with the U.S. military to qualify the same technology where e-coats are used.

PPG’s Durabed polyurea coating was the first bed liner used by auto makers. As Mil-Tough, it is used for military ground equipment. “These products provide superior abrasion resistance to protect ground vehicles and equipment in extremely harsh conditions,” Stephan said. They can be topcoated with CARC for further protection.

Mil-Tough’s XP version provides extreme protection in abrasive environments. The BR version is optimized for blasts, SM optimized for ballistics and FR for fire resistance.

PPG has developed e-coat solutions for auto fasteners and is optimizing them for military requirements. It is now concentrating on wash primers and zinc-rich primers to enhance corrosion protection of its existing coatings “When people need long-term protection and preservation, we go in to determine objectives, find out what is being protected, against what and for how long and how much access is needed,” explained Steve Hanna, president of Protective Packaging. “Then we recommend a solution.”

Solutions can involve vapor corrosion inhibitors (VCI), bubble or shrink wraps and other technologies.

Protective does 40 percent of its business for the military, either directly or for shippers or defense contractors, as with Boeing’s joint direct attack munition. If necessary, it can warranty that vapor will not exceed 15 percent for 20 years.

Protective provides covers for MIM-104 Patriot launchers, and does a lot of work for equipment left behind by deployed National Guard units, for example the trucks and trailers of the Massachusetts National Guard. It has just completed protection for F-35 joint strike fighters sent on ships to foreign customers.

Protective’s toughest challenge was protecting a radar unit in the South Pacific.

“We designed it here and spent two weeks trying to cover it, but the wind never went below 40 miles per hour,” Hanna remembered. “They told us to go home and they would put it on when the wind died down. If

we had known this we would have designed a smaller cover so we could get it on.”

Protective can guard against corrosion, ultraviolet (UV) rays, dust, mildew, mold, “you name it,” Hanna said. “A long time ago, they would just put cosmoline on it, but in 40 years you have to chip that off with chisel.” He emphasized there is no one-size-fits all anti-corrosion solution, but each must be tailored to specific needs.

Transhield makes tarps that fit over military equipment and are waterproof, breathable, have VCIs that bind with ferrous metal and can reduce corrosion 85 to 95 percent, said Jeff Holt, director of government sales. The equipment also protects against temperature spikes from UV rays that damage electric cables and rubber seals, condense water and thus cause corrosion inside vehicles.

The company is the preferred provider for Marines, having delivered 20,000 covers, and the Army and Navy are interested.

Its covers protect generators, AAVs, light armored vehicles, the M1 Abrams and M109 Paladin. Current Transhield covers last for two to four years, although VCIs last longer.

Transhield is working on a new product, Armadillo, that will last three to five years, be more breathable and add protection against biological damage from mold, fungus and mildew.

Milspray Military Technologies offers a mobile corrosion repair facility on wheels and technicians for deployment to bases of heavy assets, equipment and weapons, explained Marketing Manager and Chemical Engineer Chantel Robinson. “We do corrosion repair, prevention and maintenance on site.”

Milspray has deployed at 48 sites in four years, including six in Japan, but none in Iraq or Afghanistan. The mobile facilities can also do CARC painting, drop and reapply armor, coat undercarriages and vehicle bed-liners and do minor maintenance on common parts.

Milspray is now adding some new touch-up paint products. The company works for the Marine Corps. O

For more information, contact Editor-in-Chief Jeff McKaughan at jeffm@kmimediagroup.com or search our online archives for related stories at www.mlf-kmi.com.

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Skills and capabilities join together in a facility that supports the industrial base.

Military Logistics Forum recently interviewed Colonel James Fly Jr., the commander of the Rock Island Arsenal, to see what role the arsenal will have and what contributions it will make to strengthen and rebuild the Army of the future.

Colonel James O. Fly Jr. Commander Rock Island Arsenal Colonel James O. Fly Jr. serves as the 46th commander of the Rock Island Arsenal (RIA), a position he has held since September 2, 2010.

As commanding officer, Fly oversees operations of the only multi-purpose and vertically integrated metal manufacturer in the Department of Defense, applying the unique technical expertise and equipment to manufacture products high in quality and sustainability.

Fly came to RIA from the U.S. Army Sustainment Command, where he served as the deputy commander of the 402nd Army Field Support Brigade at Camp Arifjan, Kuwait.

Prior to that, he served as the deputy G3/5 Operations and Plans for the 8th Theater Sustainment Command at Schofield Barracks, Hawaii.

He enlisted in the Army Reserve in 1982, where he served for four years. He was commissioned as an Army officer in 1986 following his graduation from the University of Washington in Seattle, Wash. After completing the Infantry Officer Basic Course, he www.MLF-kmi.com

was assigned as a platoon leader in the 1st Armored Division in Bamberg, Germany.

During his career, Fly has commanded an infantry and a maintenance company, as well as a combat sustainment support battalion. He served in the U.S. and overseas in locations such as Germany; Iraq; Fort Hood, Texas; Fort Campbell, Ky.; and Schofield Barracks. His assignments include serving as observer/controller for the Seventh Army Combat Maneuver Training Center at Hohenfels, Germany; deputy group commander for the 101st Corps Support Group at Fort Campbell; battalion commander, 524th Combat Sustainment Support Battalion headquartered at Schofield Barracks.

His combat service includes assignments with the 1st Armored Division in Operation Desert Storm and the 1st and 3rd Corps Support Commands in Operation Iraqi Freedom.

In addition to his bachelor’s degree in fisheries biology from the University of Washington, he holds master’s degrees in adult education from Kansas State University and strategy and planning from the U.S. Naval

War College. He is a graduate of the U.S. Army Command and General Staff College.

His awards and decorations include the Bronze Star Medal with two Oak Leaf Clusters, the Meritorious Service Medal with four Oak Leaf clusters, the Army Commendation Medal with two Oak Leaf Clusters, the Army Achievement Medal with three Oak Leaf Clusters, Combat Infantryman’s Badge, Expert Infantryman’s Badge, Combat Action Badge, Parachutist Badge, Air Assault Badge and Ranger Tab. Q: Thank you for taking the time to talk with us, Colonel Fly. Why was the Rock Island Arsenal [RIA] established 150 years ago?

A: Acts of Congress in 1809 established Rock Island as a military reservation. Destruction of Harper’s Ferry Arsenal in 1859 spurred Congress to see the need for “insurance” for the military’s ordnance. In July 1862, Congress established RIA as a facility for the deposit and repair of ordnance at Rock Island.

Since then, the Rock Island Arsenal has provided equipment for the military in every major conflict since the Spanish American War. From making meat cans and horse tack at its inception to producing recoil mechanisms and advanced armor solutions today, this arsenal has answered its call to duty for nearly 150 years.

MLF 6.3 | 7

Q: One-hundred-fifty years of soldier support is a long time. How has the arsenal stayed relevant and ready to support?

A: I am lucky enough to be the 46th commander of this historic arsenal. The first commander of RIA started with just three stone buildings. Today, we cover 28 buildings and more than 3 million square feet of manufacturing and warehouse space with more than 1,000 machining centers. Three-shift operations are manned by more than 1,600 employees with nearly 50 percent of the workforce being veterans.

The arsenal’s mission has evolved over the last 150 years and even more so over the last 50. Even though some of the product mix has changed, its purpose remains the same: to support Army readiness in times of peace and war, and to support the mobilization of the industrial base in the event of a national emergency caused by war.

We have evolved through the different conflicts America has had to face. For the longest time, RIA was looked at to be an artillery expert. Our brightest minds have had a hand in every howitzer produced except for the most recent M777. Today we have four diverse product lines. Artillery is still a key component of our portfolio, but it joins other critical items needed for our soldiers.

We break our products into four main areas: Small Arms Repair Parts, Armor, Artillery and Mobile Maintenance. All of these product lines play an integral role on the battlefield.

Q: What type of capabilities do you have under your roof that allows you to support four major product lines?

A: We are able to support diverse product lines because we are the only vertically integrated metal manufacturer in the Department of Defense. That is a mouthful to say, but what it means is that we can take raw material in at one end of the factory and have a complete product go out the other end.

RIA is home to the only foundry in the Department of the Army. We take raw metal and melt it then form it into a part using castings. From there, we can machine it in one of our 1,008 machining centers. After that, the piece goes through a heat treat, plating and painting process. Finally, we assemble it together into a final system.

That was only a few processes that we manage under one roof. We have more than 17 sub-manufacturing processes that in today’s manufacturing world are usually 8 | MLF 6.3

sub-contracted out. By managing all these processes, we have products that are higher in quality, lower in price and faster on delivery times.

We are also adding advance technologies to our envelope. We maintain the only titanium casting facility in DoD. We installed a titanium furnace a few years ago and are nearly ready to ramp up to full rate production for small arms and artillery parts.

In the fall, we are excited to bring online our new Friction Stir Welding capability, which will be the largest in the world. Friction Stir Welding is a solid-state joining process (meaning the metal is not melted during the process) and is used for applications where the original metal characteristics must remain unchanged as far as possible. This process is primarily used on aluminum, and most often on large pieces which cannot be easily heat treated post-weld to recover temper characteristics. We will be working on applications such as ship decking and potentially Department of Transportation requirements, such as bridge deckings.

Q: Earlier you talked about your purpose.

Today, there are many private defense companies that provide military equipment. Where does RIA’s role fit into equipping our soldiers?

A: Arsenals and the organic industrial base is a catalyst for our military. America has been able to win wars due to our military being adaptable to ever-changing battlefield conditions.

Our private defense companies work hard at developing solutions for the men and women on the battlefield. However, there are a lot of contractual hurdles that sometimes hinder their response time.

That is where we come in. We are the military’s insurance policy because we are owned by the government. That means the program managers can come directly to us and not issue a Federal Acquisition Regulation contract.

In the past, we have gotten a phone call in the middle of the night with an urgent need.

By 6:00 the next morning, our engineers and machinists are already working on a solution.

Oftentimes, within days, we can have a product out of the factory and to the foxhole.

Q: That is pretty impressive. Can you give us an example of those short turnaround times?

A: Two years ago, we received a Quality Deficiency Report from TACOM Life Cycle Management Command for customers reporting

that firing pins for the M252 81 mm mortar and M120/M121 120 mm mortar, bought commercially, were not meeting minimum protrusion requirements; the entire spares inventory was suspended from issue.

The distance a pin protrudes into the mortar tube can determine whether or not the ammunition primer will function as intended, making protrusion requirements critical.

TACOM LCMC needed to find an alternative source for the pins quickly, since over 300 backorders for the 81 mm pin and 700 for the 120 mm pin had accumulated.

Upon discovering the issue, which was keeping mortars from being mission-capable, TACOM LCMC turned to Rock Island Arsenal to finish the job. And for a process that can often take up to eight months to complete, the factory was able to deliver to the field in less than one month.

Q: How can others work with RIA? A: Many people don’t realize how easy it can be to work with the arsenal. When working government to government, a contract solicitation doesn’t have to be done. Once blueprints are shown and funding is promised, RIA can begin working and figure out the funding later. Working with the commercial sector can be a little tricky but once direct sales orders are signed and funding has been paid, work can begin. Rock Island also works with small businesses through their small business office.

Q: Does RIA see benefits in partnering with private industry?

A: Yes, partnering is very important to this arsenal. Those who operate within the Materiel Enterprise know how important it is for us to engage private industry. Partnering with industry provides us with manufacturing capabilities that the Army’s industrial base just cannot match. It makes sense from a planning standpoint, as well as ensuring that we are putting taxpayer’s money to good use.

Partnering also allows us to bring the best of both worlds together. It is amazing the ideas that come together when our Army industrial base engineers and planners join forces with their private-industry counterparts.

This partnering isn’t just limited to big businesses. Small businesses also play a critical role in providing equipment to soldiers down range. Local small businesses have always played a critical role here at RIA. Many of the stone buildings on this island www.MLF-kmi.com

Do n’t wit to g miss h t row thi he s Ro your oppo ck Isla busin rtuni nd es ty Ars s ena l!

2012 Midwest Small Business Government Contracting Symposium May 22-24, 20I2 QUAD CITIES

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• EAGLE update • Prime contractor/small business matchmaking session • Army Sustainment Command (ASC) Advance Planning Briefing for Industry (APBI) • Presentations by Senior DoD Officials

For more information and to register for the Symposium, visit www.ndia-ia-il.org.

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The Rock Island Arsenal Joint Manufacturing and Technology Center (JMTC) is the only multi-purpose and vertically integrated metal manufacturer in the Department of Defense. JMTC supports the nation with worldclass products, services and logistics.

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were made from materials provided by local small businesses. Small businesses can provide a unique niche capability that allows for quicker manufacturing time for the end product.

Q: Does partnering bring workload into the arsenal and if it does, what kind?

A: Yes, it does bring workload into the factory and that is key to ensuring our skill sets stay sharp and ready for the next conflict. We have multiple partnerships that add workload and capability to our arsenal.

We have a partnership with BAE Systems that brings a composite armor capability to our facility. The partnership calls for BAE Systems to provide the technology and processes to allow the arsenal to produce composite armor utilized in military ground vehicles, commercial armored vehicles, soldier protection equipment and other safety and survivability applications. RIA is the manufacturer, providing floor space, skilled labor and infrastructure, while BAE Systems provides the technical and management oversight.

Another company we partner with is a veteran-owned small business in Rock Island, Ill., called Mandus Group Ltd. Mandus Group specializes in artillery innovation, logistics and life cycle support. We work with them to form a one-stop source for complete renovation and repair, parts resourcing, training, preventative maintenance, engineering and modifications.

Plus, we have others that support research and development and training.

Q: So, you don’t only partner with private companies, but also those in education?

A: Oh yes. We work with local educational institutions to provide a multitude of training opportunities for our employees. Our most recent one was our Arsenal Academy. Being the only vertically-integrated metal manufacturer in DoD, we manage more than 400 products from start to finish under its roof.

We needed to find a way to train our people to operate in the unique environment that is different than anyone else in the Army. The Arsenal Academy was a way for us to provide

a formal training environment to give our people the skills they need to operate at this unique facility. It is primarily geared toward first-time supervisors.

We issued a contract solicitation to provide the educational support to train our employees in multiple areas that are key to RIA business. A consortium of three educational institutions and a veteran-owned company provides a 14-week course consisting of classroom training coupled with guest speakers and hands-on training. We graduated our first 14 students last month and the feedback was outstanding. We plan to continue running this academy for the foreseeable future.

Q: RIA is located in the middle of the Mississippi River. What makes the island and the area attractive for companies who want to partner with you?

A: Having 17 major manufacturing processes managed here, we can fill niche needs for many companies. We have a skilled workforce across the entire operation. From journeyman machinists to advance engineers, we

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10 | MLF 6.3

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can work with companies in many ways. Just a few examples include using our machines to help with excess capacity or helping with technical issues to find a better way to engineer a system.

But we are not alone. The Quad Cities’ advanced manufacturing industry, a hallmark of the region, includes innovative Fortune 500 companies and a supply chain with a strategic national significance and global reach. Located in the heart of the Midwest at the crossroads of Interstate 80 and the Mississippi River, more than 35 million people are located within a 300-mile radius of the region. We have benchmarked and worked collaboratively with other manufactures in our area to ensure we are a world-class manufacturing facility.

In addition, there are more than 70 tenants on Rock Island Arsenal Island with the majority of them dealing with national logistics.

Q: With the conflicts in Southwest Asia dying down, how do you maintain a trained workforce that is ready for the next battle?

A: We continue to market our capabilities to not only the Army, but also to the joint services.

Also, partnerships are going to be more critical to our operations. These partnerships allow workload to continue to flow through this factory during times of peace. It also helps us reduce our overhead which reduces our burden on the taxpayer.

To ensure this arsenal is ready to answer the call for the next 150 years, we cannot drastically reduce its workforce in times of peace and expect to mobilize just in time of a national emergency. The skills resident in the workforce of an arsenal are perishable. The expertise and knowledge that is essential to put together the industrial processes required to build complex weapon systems effectively are not easily found when you need them most, but must be carefully cultivated over time.

My vision is that we will once again become an original equipment manufacturer for one large and one small weapon system program. We will continue to manufacture mobile maintenance systems that directly affect the readiness of the Army. We will be

transformed to support repair parts across all military branches. We will continue to reduce our burden on the American people through foreign military sales and commercial sales. All in an environment of continuous improvement, where we will become more agile than we are today and where we will never lose focus on people, costs, schedule and quality as we strive to become a model for production on demand.

Q: Thank you, Colonel Fly, for your time today. Is there anything else you want to add?

A: Thank you for taking the time to talk to me. If anyone has never seen the Rock Island Arsenal, I would invite them to come to this amazing island in the middle of the Mississippi River and see firsthand what a national treasure this place is. Thanks. O

For more information, contact Editor-in-Chief Jeff McKaughan at jeffm@kmimediagroup.com or search our online archives for related stories at www.mlf-kmi.com.

Critical Mission.

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3/28/12 2:31 PM

MLF 6.3 | 11

Greening

With thoughts to the long term, DoD is trying to become a more efficient consumer of energy.

the DoD

By Heather Baldwin MLF Correspondent

Lewis called DoD a “progressive client [that is] greatly reducing From radar development during World War II to computer scithe amount of waste they generate, water resources they consume and ence and the creation of the Internet, DoD has always been at the grid-produced energy they use—while at the same time increasing the cutting edge of technology research. Now, it is engaged in a massive use of renewable resources and green designs and technologies.” energy innovation effort that already is promising revolutionary To meet its aggressive targets, DoD is working not only with changes in the ways Americans will think about and consume energy private companies like LBG but also with other federal agencies—in in the years to come. particular, the Department of Energy (DoE) and Environmental This push to go “green” is far more than a nod to a Democratic Protection Agency (EPA). Most recently, the DoD and EPA signed a White House. As Secretary of the Navy Ray Mabus said last year, February 2012 memorandum of understanding (MOU) formalizing a “Energy reform will make us better fighters. In the end, it is a matter partnership between the two organizations to develop and implement of energy independence and it is a matter of national security.” technologies that will help create sustainable American military bases It is also a matter of fiscal prudence. DoD is the single largest worldwide. Under the MOU, the research of EPA and DoD scientists energy consumer in the U.S., accounting for about 90 percent of and engineers will be used to develop and demonstrate tools and the federal government’s energy use. Its fiscal year 2010 energy bill technologies that will aid DoD in achieving sustainability as well as was $15 billion. Of that, $11 billion was for operations (fuel used use military bases as test beds for innovative technologies that can to power ships, aircraft, ground vehicles and generators at forward then be shared more broadly. operating bases). The remaining $4 billion was for electricity to power In a sense, the agreement extends the work of the Environmenthe 300,000 buildings and fuel to operate the 200,000 non-tactical tal Security Technology Certification Program vehicles on DoD installations.

(ESTCP), a program established in 1995 to proDoD is tackling energy reform on three fronts: reducing mote the transfer of innovative technologies that its demand for traditional energy from commercial sources, have successfully established proof of concept expanding its supply of renewable and alternative energy, to field or production use. It identifies the most and boosting energy security. Projects under each of these promising technologies by annually soliciting for categories run the gamut from solar panels, wind farms and relevant project proposals, then putting selected building retrofits to vegetative roofing and dining facility oil projects through rigorous demonstrations and re-use. All are aimed at helping DoD meet various energy evaluations. goals, including one to produce or procure 25 percent of its In late 2011, ESTCP gave the green light to 27 total facility energy use from renewable sources by 2025 and projects—selected from 575 proposals—to demonanother to reduce energy intensity 30 percent by the end of Tom Lewis strate emerging energy technologies on military FY15 (compared to an FY03 baseline). installations in FY12. One of the selected projects “The goals of the military’s green initiatives, and the is for a smart microgrid at Fort Bliss. Smart associated initial efforts of many talented and dedicated microgrids allow a user to “intelligently control individuals across the ranks, all point in a very positive a diverse set of energy generation sources and a direction,” observed Tom Lewis, group vice president of U.S. diverse set of loads and optimize it for efficient, operations at The Louis Berger Group Inc. (LBG). “This has reliable and secure power,” explained Gil Metzger, created positive buzz and interest within the green technolintelligent microgrid solutions director for Lockogy industry, as well as a diversity of pilots and small projects heed Martin Corp., the company driving the Fort within DoD to get things started.”

Bliss project. “You are creating an energy cocoon LBG, a leader in green engineering and construction around an end-user’s facility.” solutions for more than 50 years, has more recently become The microgrid concept is gaining traction, as it active as a technology evaluation, alternatives and impacts Gil Metzger makes a lot of sense from both a power and secuanalysis, and solutions integration contractor for waste rity standpoint. The current power grid includes management, green power and energy efficiency. Among minimal or no renewable energy and energy storage, no intelligent its many projects, LBG has lately led or supported feasibility of energy distribution and uncontrolled load demands. Microgrids enable those crops grown on U.S. Army lands at six U.S. sites; completed a net zero capabilities and, when necessary, can disconnect from the national grid water, waste and energy environmental impact statement at Fort Bliss, network and function in ‘island mode,’ enabling critical military funcTexas; provided advisory materials on advancements in different wastetions to continue during commercial power disruptions. to-energy technologies to the Air Force Civil Engineer Support Agency Lockheed Martin’s ESTCP microgrid is slated for a brigade combat and others; and done a pilot study in Iraq for forward operating base team (BCT). Metzger said the microgrid should be fully operational by fuel use reduction through the re-use of dining facility waste oils.

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early summer and his team will collect data for six months to a year.

Altogether, the project will run roughly 18 months.

“Since this is a training facility, the power goes up quite a bit during the day and down at night,” said Metzger. “When they do exercises, they will also exercise the microgrid and allow us to react to unexpected outages.” Metzger said Lockheed Martin’s tactical microgrid systems have achieved anywhere from 10 percent to 40 percent savings, depending on how well facilities were optimized prior to implementation. Once the Fort Bliss project proves its value, “we’ll be looking to expand across the entire BCT, then across the entire base,” Metzger said.

Although smart grids are still in their infancy, Judy Marks, president and CEO of Siemens Government Technologies Inc., anticipates their usage will grow quickly. “DoD is just starting to do initial implementation and testing [of smart grids],” said Marks. “The technology exists, so it’s not a technology challenge; it’s a matter of people being able to understand their current energy baseline, how much of that should be traditional and renewable. I think we’re going to see microgrids emerge in late 2012 and they’ll come up a pretty quick curve.”

In August 2011, Siemens Government Judy Marks Technologies and Boeing announced a strategic alliance for the joint development and marketing of smart grid technologies. The alliance’s first contract, awarded under the ESTCP program, was announced on February 27. Under that contract, the team will implement intelligent energymanagement solutions that include integrated controls for cooling and heating systems, lighting, ventilation and plug loads at an unspecified DoD installation. The partnership said DoD will realize up to 40 percent savings in energy costs at the installation.

“When you think that the majority of power DoD uses today comes from the commercial grid, there are some reasons for this and also some reasons to function autonomously, on a mircrogrid, during a natural disaster or other threat,” said Marks. “That’s where the future lies: energy efficiency through improvements in building controls, chillers and boilers, renewables. There is much opportunity for improvement.”

So much opportunity, in fact, that a handful of installations are moving toward “net zero,” meaning they consume only as much energy or water as they produce and will eliminate solid waste to landfills. The net zero concept arose from a joint initiative formed between DoD and DoE in 2008 to address military energy use. Their work led them to examine the potential for net zero energy installations. Marine Corps Air Station Miramar was selected as the prototype installation for net zero energy assessment and planning. Now, the Department of the Navy aims to have 50 percent of its installations be net zero by 2020.

In April 2011, the U.S. Army identified six net zero pilot installations each for energy, water and waste. The goal for all is to achieve net zero by 2020. By 2030, the Army aims to have 25 net zero installations.

Fort Hunter Liggett (FHL), Calif., was selected as a net zero pilot in both energy and waste. FHL is the largest Army Reserve installation and the eighth largest Army installation in the nation. Colonel James Suriano, FHL garrison commander, said his post was likely selected from the more than 100 applicants because it was already moving in a net zero direction. “We are close to being net zero on water,” he said.

“Now we have a great opportunity to work with other professionals in the Army to reach our energy and waste goals in a more timely manner and with more support.” www.MLF-kmi.com

Todd Dirmeyer, DPW energy manager, said FHL is working closely with the National Renewable Energy Laboratory (NREL).

NREL recently studied FHL energy use and is currently creating a roadmap to help guide the post to net zero by the 2020 deadline. Dirmeyer expects that roadmap to be delivered in April 2012.

In the meantime, FHL is moving ahead with multiple energy initiatives. Taking advantage of its 292 average annual days of sunshine, FHL is building three 1-megawatt (MW) solar panel grids. The first one, stretching 40 feet by 1,200 feet over an existing parking lot, will tie into the FHL energy grid in April 2012. Construction on a second, identical, solar panel grid will begin in May or June this year. A third is awaiting funding. Each grid will produce about 1.8 million kWh annually. All three together will shave about 5.4 million kWh from FHL’s annual 23 million kWh of energy consumption, said Dirmeyer.

Separately, the post is getting ready to replace its highwattage light fixtures with LEDs. “Lighting is typically 20 to 40 percent of the total energy load,” said Dirmeyer, adding that the LEDs should decrease annual energy consumption by 2.4 million kWh. In FY14, Dirmeyer expects to see a further dent in consumption with the installation of an energy management control system (EMCS), which will automate building controls for lights, HVAC and other energy consumers. In October 2012, smart meters will be installed for precision measuring of electric, gas and water usage. “At this time the installation does not have a baseline established for individual building electrical, water and propane use.” said Dirmeyer. “The advanced smart meters will establish a baseline and give us the tools to measure our progress.”

For instance, the smart meters will enable FHL to compare energy use at the recently overhauled legal office with unmodified identical buildings across the street. Under net zero, the legal office was fitted with adjustable-light solar tubes, a treated concrete floor (eliminating carpet cleaning energy), high-efficiency R34 siding (eliminating heating and cooling) and dual-pane high-efficiency windows. “Now, the only energy used in that building is to power the computers,” said Suriano. “We don’t have to light the building during the day. And even during the winter when temperatures were below zero, the building lost only one degree of heat overnight.”

Ultimately, Dirmeyer envisions saving enough energy to export the excess to Pacific Gas & Electric (PG&E) for credit. And when the 1-MW export limit is reached, “we could siphon off additional energy to something else, such as a hydrogen fuel cell, and the EMCS could discharge the energy when the sun isn’t shining,” Dirmeyer said.

“We’re still working it all out. It’s all new.”

Still, FHL knows it is on the right track. “We are measuring the flow coming in from PG&E,” Suriano said, “and we know that even though PG&E’s rates are going up, we’ve been paying less. Our gross energy use is down even though the number of people on base is going up.”

During his nearly 30 years in the Army, Suriano said, he has seen [the concept of] “green” progress from something unheard of to something exotic to “the new normal. There’s great buy-in,” he concluded. “In a convoy, every tank of fuel we don’t have to use makes it easier to execute the mission and reduce threats to human life.” O For more information, contact Editor-in-Chief Jeff McKaughan at jeffm@kmimediagroup.com or search our online archives for related stories at www.mlf-kmi.com.

MLF 6.3 | 13

SUPPLY CHAIN Vertical Carousel and Cart System The new point of use Mini-Avenger vertical carousel and cart system provides ergonomic high density secure storage for military work areas and cells. This new system saves up to 66 percent of wasted floor space while increasing operator productivity by up to two-thirds by eliminating wasted walking and searching time.

The Mini-Avenger is portable and designed to move through facilities, standard halls and doorways to the point of use. The unit comes with roller ball bearing caster wheels that allow minimal effort to move quickly and easily. Units can be dedicated to a work station or area or rotated for replenishment, kitting, consolidation, buffer or pick and pass applications.

Inventory and items for military are stored on carriers or shelves that rotate on an oval track vertically and are delivered to an ergonomically located work counter. Every shelf can be configured uniquely to meet specific inventory and application requirements. A myriad of totes, trays, containers and boxes can be utilized to optimize virtually any application. An optional uninterrupted power supply allows for mobile software usage.

The system system is available with integrated software and pick to light systems to assure 99.9+ percent levels of accuracy, picking speed and increased productivity. Likewise, folding the work counter when placed up seals the unit for maximum inventory security and protection. By using the locking work counter and password software access, inventory and items can be tracked and monitored for improved management visibility. This helps in reducing inventory costs by eliminating misplaced or stolen items.

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Tank Rack Modules DRS Technologies Inc., a Finmeccanica Company, announced its Sustainment Systems division has been awarded a $68.7 million contract for tank rack modules for the U.S. Army’s modular fuel system (MFS).

This recent order from the Army’s Program Manager, Petroleum and Water Systems at the TACOM Lifecycle Management Command is the full rate production contract stemming from DRS’ successful design, development and qualification of the MFS. DRS’ MFS is a new, highly mobile tactical fuel storage and distribution system to support the warfighter in the field. Each tank

rack module stores 2,500 gallons of fuel and is transportable as an ISO compatible system directly to the field.

“One of our most important missions is to sustain our ground troops with flexible, responsive liquid logistics solutions where and when they need it. The modular fuel system significantly increases the deployability and efficiency of the Army’s fuel storage and delivery systems,” said Joseph Matteoni, vice president and general manager of DRS Sustainment Systems Inc. “We are proud to play a central role in our military’s ongoing efforts to improve its logistics and sustainment capabilities.”

Improving the FMTV Oshkosh Defense, a division of Oshkosh Corporation, is continuing its commitment to further improve protection and mobility for warfighters on the changing battlefield with new enhancements for the U.S. Army and National Guard’s Family of Medium Tactical Vehicles (FMTV).

The result for soldiers is better underbody protection and noticeably improved vehicle performance and ride quality on rough terrain.

Named the FMTV Enhanced Protection and Mobility Demonstrator (EPMD), the prototype vehicle utilizes the Oshkosh TAK-4 independent suspension system and a custom-fitted Oshkosh Underbody Improvement Kit (UIK) for previously unrealized levels of protection and mobility.

“We’re drawing on two Oshkosh Defense core competencies—survivability and off-road mobility—to give the FMTV plat-

form improved capabilities on the battlefield against evolving threats and severe terrain,” said Mike Ivy, vice president and general manager of Army Programs for Oshkosh Defense. “These upgrades build on that success and give soldiers a better protected, more mobile family of vehicles.”

The FMTV EPMD uses an Oshkosh-designed UIK to provide protection beyond the platform’s Long-Term Armor Strategycompliant armor suite. Oshkosh is in the process of delivering more than 8,000 MRAP all-terrain vehicle UIKs, which are protecting warfighters in Afghanistan today, as well as more than 400 UIKs for the Army’s Heavy Expanded Mobility Tactical Truck (HEMTT) A4. Oshkosh UIKs are designed for light, medium, heavy and MRAP vehicles in the ongoing battle against increasingly dangerous IEDs and roadside bombs.

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Focus Integrator Rear Adm. (Select) Cindy L. “CJ� Jaynes Assistant Commander, Logistics and Industrial Operations U.S. Navy Naval Air Systems Command

U.S. Navy naval Air systems command

U.S. Navy naval Air systems command

Focus Integrator

Q& A

Developing, Planning and Integrating Logistics Support Considerations Rear Admiral (Select) Cindy L. “CJ” Jaynes Assistant Commander, Logistics and Industrial Operations U.S. Navy Naval Air Systems Command Rear Admiral (select) Jaynes is serving as the assistant commander for logistics and industrial operations, Naval Air Systems Command.

She is responsible for overseeing logistics support efforts for both fielded and developmental aviation systems.

Jaynes graduated from Indiana University of Pennsylvania in 1979 with a B.S. degree in mathematics education, followed by a master’s degree in mathematics in 1982. She was commissioned in 1983 via the Officer Candidate School in Newport, R.I., and designated an aeronautical engineering (maintenance) duty officer in 1985. She was designated an Acquisition Professional Community member in 1996 and received an M.B.A. from Norwich University in 2008. Jaynes also completed the Naval War College Command and Staff (non-resident) program in 1995, and earned a Systems Engineering Certification from California Institute of Technology Industrial Relations Center in 1999.

Operational tours include Training Squadron Eighty-Six (VT86); Patrol Squadron Five (VP-5); Aircraft Intermediate Maintenance Department, commander Helicopter Wings Atlantic; Aircraft Intermediate Maintenance Department; and officer-in-charge commander, Strike Fighter Wing Pacific, Aircraft Intermediate Maintenance Detachment.

Jaynes’ acquisition tours include Naval Aviation Engineering Service Unit; Deputy Assistant Program Manager Systems Engineering for PMA-290, P-3 and EP-3 Program Office; F/A-18 Program Integrator Defense Contract Management Command Northrop Grumman; assistant program manager Logistics for PMA-265, F/A-18 & EA-18G Program Office; and PMA-265 F/A-18 deputy program manager fleet support. She assumed command of PMA-202, Aircrew Systems in June 2006. She assumed command of PMA-213, Naval Air Traffic Management Systems in 2007. In July 2011, she reported as NAVAIR assistant commander for logistics and industrial operations.

Her awards include the Legion of Merit (two), Defense Meritorious Service Medal, Meritorious Service Medal (four), Navy and Marine Corps Commendation Medal, Navy and Marine Corps Achievement Medal, National Defense Service Medal (with Service Star), Global War on Terrorism Service Medal and numerous unit awards. She is authorized to wear the Professional Aviation Maintenance Officer Warfare insignia.

Q: Could you start off with an overview of the size of the command, where the various elements are located, and some of its budget high points?

A: Right now, NAVAIR has roughly 36,000 personnel, a combination of civilian, military and contractor employees. Our logistics and industrial www.MLF-kmi.com

operations competency has about 3,775 employees, located at the primary NAVAIR and Fleet Readiness Center sites in Patuxent River, Md., Lakehurst, N.J., Orlando and Jacksonville, Fla., China Lake, San Diego and Point Mugu, Calif., and Cherry Point, N.C. Our team has a two-part mission. The first part is to provide the NAE [Naval Aviation Enterprise] with the resources they need to develop, plan and integrate logistics support considerations into their weapon system designs. Second, we establish and maintain integrated logistics support capable of sustaining fleet operations and maintenance throughout the life cycle of those weapon systems and related equipment.

As for budget, we’re responsible for over $3.8 billion of appropriated funds every year. It’s important to me that we remain diligent about prudent use of these dollars, for both the taxpayer and the Navy. As for the high points of that budget, there’s APN [aircraft procurement, Navy]. We have $1.2 billion for the naval aviation spares program, which provides initial spares and repair parts needed to support NAEsponsored Navy and Marine Corps aircraft procurement and operating programs and $1.5 billion in OMN [operations and maintenance, Navy] funds for aircraft depot maintenance and aviation logistics.

We also have over $700 million in OMN funds to provide engineering and logistics support for the Navy and Marine Corps operational inventory of aircraft, associated support equipment, automatic test equipment and aircraft systems; to train aviation maintenance personnel at the O and I maintenance levels; and to maintain and manage U.S. Navy Naval Air Systems Command | MLF 6.3 | 1

U.S. Navy naval Air systems command technical document databases that support our aeronautical weapons and equipment throughout their life cycle.

We have over $300 million in OMN funds for the weapons maintenance program, including air-launched missile rework and air-launched ordnance rework, and over $140 million in OMNR [operations and maintenance, Navy Reserve] funds to provide airframes and engines rework and emergent repairs for reserves aircraft.

Q: What will you do in 2012 to increase the efficiencies of NAVAIR logistics and industrial operations?

A: Our goal in 2012 is to better align our operations with our customers, think in terms of total program—not just the logistics piece—and increase our speed across the board. If we change the way we think and act in those three areas, we will become more efficient and more valuable to our customers.

In terms of alignment, an example would be the NAE and our role in supporting them. AIR 6.0 needs to be proactive and responsive to the NAE and focus our metrics analysis and activity on moving the needles that will benefit the NAE. Also, by understanding all aspects of a program, such as engineering, contracts, test, etc., we’re better positioned to make better decisions on the logistics side of the house and understand how we can positively impact the program.

Q: What are the key elements of your commander’s guidance?

A: My commander’s guidance is based on the priorities and tenets set forth by the CNO. I have three primary focus areas—current readiness, future readiness and people. These three areas form the foundation of the support that we provide our customers.

Let’s start with current readiness. Here the focus is on program office success. We can achieve success by aligning better with warfighter focus teams and outside organizations, promoting transparent engagement with program teams, and adequately staffing those program teams with qualified logisticians.

For future readiness, the main goal is to improve the acquisition process. We can do this by beginning sustainment planning pre-milestone A and continuing throughout the acquisition life cycle, driving logistics relevancy into the current systems engineering process. The goal is to use processes that promote analytical thinking, which effectively drives decision-making based on known and acceptable risks.

And last, but certainly not least, is the focus we place on our people. We must continue to improve the effectiveness of our valued workforce. We will do this by targeting training, which will drive the expansion and diversification of our workforce. We will develop standardized work and processes to improve efficiency, and we’ll also focus on their welfare and morale. We want to help our people work smarter, not harder.

Q: When new aircraft programs are being formulated, does Logistics and Industrial Operations have a seat at the table to ensure that total ownership considerations are in the planning from the outset? How important are those considerations when you are the one now at the maintenance and sustainment part of the chain?

A: Logistics and Industrial Operations absolutely owns a seat at the table from day one. It’s our responsibility to ensure fielding and sustainment costs are thoroughly vetted throughout the early stages 2 | MLF 6.3 | U.S. Navy Naval Air Systems Command

of development, and that our maintenance strategy is supportable and cost-effective. Once the design is set, it becomes more difficult to drive costs down, so we have to be there from the beginning. You only have one chance to truly influence the program’s supportability design—it is of the utmost importance to me to get that right, right away. The Navy will have to live with those decisions for years after I am gone.

Q: Much of asset visibility and management is IT driven. Does the command have a defined IT roadmap? Does the current IT network allow the optimum level of communication and information sharing across your supply chain?

A: NAVAIR has tools in place today that allow us to accurately track the location and condition of all of our assets. The capability in place today ensures that we successfully and effectively support fleet operations.

That being said, we are looking at opportunities to transition away from some of the current legacy systems. Specifically, we are looking at the opportunity to leverage the capability of Navy ERP to support total asset visibility, which would support the asset location and condition requirements, but add the benefit of full integration with financial value and reporting. We have already begun the process of transitioning some of the material at our Lakehurst site.

In addition, we are working with NAVSEA on a joint effort to transition material held at a common site. We’ll be applying lessons learned from these efforts to further define our overall material transition plan.

Q: What is the relationship between NAVAIR logistics and the Defense Logistics Agency? Do they now or do you expect them in the future to become more involved in your inventory and parts management?

A: We have a strong relationship and I’m confident it will grow even stronger in the future as DLA takes on a more expanded role in naval aviation readiness—and yes, they’ll be very well ingrained in our inventory and parts management as we move forward.

BRAC 2005 directed the transition of supply support at the fleet readiness centers [FRCs] to DLA from the Navy-owned fleet and industrial supply centers. Instead of DLA being responsible for managing wholesale inventories only, they are also responsible for managing retail inventories in the direct support of FRCs and naval weapon systems and acquisition of depot level repairables. Additionally, DLA is prototyping processes to develop of joint service performance based logistic contracts that will impact the NAE. As DLA becomes the NAE’s key partner in naval aviation readiness, it is essential that we operate from a position of mutual trust. To that end, we are strengthening our understanding of each other’s requirements and aligning our joint processes.

In preparation for this future, the NAE and DLA are partnering on a collaboration project designed to improve readiness of naval aircraft by focusing on forecasting and supportability. Traditionally, DLA procurement and stocking decisions were based on historical demand. The goal of forecasting is for the NAE to communicate changes in historical demands with adequate lead-time to enable DLA to purchase and deliver that material when needed. The ability to communicate projected changes in historical demands is essential for long-term success.

Forecasting is a process that allows the NAE and DLA to predict future requirements that are outside procurement lead-time.

Supportability is a process that allows the NAE and DLA to expedite near-term requirements that are within procurement lead-time. DLA www.MLF-kmi.com

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Instead of simply farming work out to additional maintainers, our core enabling philosophy helps our depot partners do even more of what they do best. We streamline processes, manage the supply chain, invest in capital improvements and maintain depot equipment.

We do the same for your forward supply points, to keep their shelves full and maintain balance between forward and depot repair demand.

Our proven PBL model is adaptable to any platform. Contact AAI Logistics & Technical Services to learn more at 800-655-3964 or RSC_AAIReg@aai.textron.com.

aaicorp.com © 2012 AAI Corporation. All rights reserved. AAI Logistics & Technical Services is an operating unit of Textron Systems, a Textron Inc. (NYSE: TXT) company. AAI and design is a registered trademark of AAI Corporation. Photo courtesy U.S. Navy.

U.S. Navy Air systems command U.S. Navy naval Airnaval systems command NAVAIR SYSCOM

Vice Adm. David Architzel Commander

Kalmen Leikach Deputy Commander

Rear Adm. Steven R. Eastburg Vice Commander

Cmd. Master Chief Bret A. Joel

Program Executive Officers

Rear Adm. Paul Grosklags Air ASW, Assault & Special Mission Programs

Rear Adm. Donald Gaddis Tactical Aircraft Programs

Rear Adm. William Shannon Unmanned Aviation & Strike Weapons

Vice Adm. David Venlet F-35 Lightning II Program

1. Nor

4 | MLF 6.3 | U.S. Navy Naval Air Systems Command

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U.S. Navy naval Air systems command NAVAIR COMPETENCIES

Keith Sanders Acquisition Executive Program Management

Diane Balderson Assistant Commander Contracts

Rear Adm. Jeff Penfield Commander Fleet Readiness Centers

Rear Adm. Randy Mahr Assistant Commander Research & Engineering; Commander Aircraft Division

Rear Adm. (select) CJ Jaynes Assistant Commander for Logistics & Industrial Operations

Rear Adm. Mat Winter Assistant Commander Test & Evaluation; Commander, NAWC Weapons Division

Gary Kurtz Assistant Commander Corporate Operations & Total Force

Logistics & industrial operations

Garry Newton Deputy Assistant Commander

Capt. JC Harding Executive Director

Dennis West Director Industrial Operations

Toni Meier Director Logistics Management Integration Department

Tracy Moran Director Industrial & Logistics Maintenance Planning/Sustainment Department

Dan Nega Director Aviation Readiness & Resource Analysis Department

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U.S. Navy Naval Air Systems Command | MLF 6.3 | 5

U.S. Navy naval Air systems command is fairly successful at supporting critical, near-term requirements but there are instances when required material is not available.

The relationship between NAVAIR logistics and DLA is strong today and will grow stronger in the future as DLA takes on a more expanded role in naval aviation readiness. I fully expect the collaboration team to improve readiness while remaining good stewards of our defense dollars. This is a win-win for the NAE and DLA. Q: Staying with the issue of parts, how concerned are you with the problem of counterfeit parts? What is your process to ensure that they remain outside your supply chain?

A: We’re very concerned about this and how they affect our business.

We’re looking into how to mitigate that problem and prevent them from becoming more of an issue.

Q: What is your role in reliability centered maintenance? Have there been measurable benefits to this maintenance philosophy?

A: We use reliability centered maintenance [RCM] extensively to determine and modify preventive maintenance tasks and intervals, and to recommend other actions to mitigate failure effects. RCM programs exist within NAVAIR for aircraft, engines and support equipment.

RCM has shown to have a beneficial impact—we’ve seen reductions in maintenance man hours and life cycle cost avoidances for scheduled maintenance, increased availability, less out-of-service time, and all while maintaining safe operations.

Q: What educational and training regimes do you have to develop and mature a professional NAVAIR logistician?

A: Our logistics professionals are instrumental to our AIR 6.0 team, so to further hone their knowledge, skills and abilities we are establishing the Logistics University, or what we’re calling LOG U. Right now it’s in its formative stage—our senior leadership is shaping LOG U’s framework and curriculum, which will define a clear career path and provide integrated, in-house opportunities that target their unique needs.

LOG U really benefits all of NAVAIR and the fleet—in addition to facilitating professional development in our competency, we’re nurturing the next generation of our 6.0 leadership, which will allow us to reap the benefits of a continuously improving organization, while providing the fleet with the most effective and efficient logistical support to meet their daily operations and maintenance needs.

Q: Any closing thoughts?

A: In this era of continuous improvement and overwhelming budget constraints, providing the best possible services to our customers is more than a nice-to-do—it’s an absolute must-to-do. We must make it our goal to not simply meet customer needs and expectations, but to exceed them whenever possible, and we can do this by re-energizing our efforts in focused efficiency.

I think what we discussed here today represents how we’re positioning ourselves for the future, how we’re going to be more successful in the future for the NAE. O

Top Critical Contracts NAVAIR’s Logistics and Industrial Operations provided information on recent high-dollar contracts, including contract amount, performance period, a brief work synopsis and the company awarded the contract.

Reset Project Organizational Level Maintenance for U.S. Marine Corps Aviation • $38,826,076.12 firm fixed-price contract • Performance period: February 2009 – February 2014 • Provide reset services to include preset, in-theater sustainment, reconstitution and scheduled/ unscheduled maintenance for AH-1W, UH-1N, CH-53D/E, CH-46E; lots 3 and 4 • Awarded to PKL Service Inc.

NALDA/Deckplate • $11,013,943.13 cost-plus-fixed-fee contract • Performance period: December 2008 – December 2013 • Support systems acquisition and life cycle support services for all the programs currently under the logistics IT systems within Aviation Readiness & Resource Analysis Department.

• Awarded to Spalding Consulting

Depot Level Maintenance • $36,961,986.63 cost-plus-fixed-fee contract • Performance period: August 2010 – July 2015 • Provide support services required by the Fleet Readiness Center Southwest, North Island, California, to augment the government workforce performing Depot Level Maintenance (DLM) work on aircraft and rework of associated components/ materials. Including: incorporations of modifications, inservice repairs, and all other categories of service associated with aircraft DLM and its planning, in accordance with the Performance Work Statement and the Quality Assurance Surveillance Plan.

• Awarded to Affordable Engineering Services LLC

Reset Project Organizational Level Maintenance for U.S. Marine Corps Aviation • $10,539,225.36 firm fixed-price contract • Performance period: January 2009 – January 2014 • Provide reset services to include preset, in-theater sustainment, reconstitution and scheduled/ unscheduled maintenance for F/A-18A+/C/D, AV-8B, EA-6B, and KC-130J; Lots 1 and 2.

Awarded to Defense Support Services LLC • F/A-18 A-F and EA-18G ILS • $7,360,766.97 cost-plus-fixed-fee contract • Performance period: June 2006 – June 2010 • Program management administrative support, logistics support, travel, material and NMCI. • Awarded to Anteon Corporation changed to General Dynamics Information Technology Inc.

6 | MLF 6.3 | U.S. Navy Naval Air Systems Command

Organizational-Level Electronic Warfare Test Program Set (OEWTPS) • $5,196,021.00 cost-plus-fixed-fee contract • Performance period: March 2007 – March 2012 • Design, development, integration, production and delivery of OEWTPS for the ALQ-211 used with the USM-670 test set; provide the OEWTPS, including the Antenna Coupler Interface Group (ACIG) for the CV-22, with an option to develop the ACIG for the MH-47G and the MH-60M; and include production of the CV-22, MH-47G and MH-60M ACIG. • Awarded to AAI Corp.

All Weapons Information System (AWIS) • $4,132,382.32 cost-plus-fixed-fee contract • Performance period: May 2011 – April 2016 • Provide design, development, enhancement and maintenance information technology services for the AWIS software application modules.

• Awarded to Engineering Management Concepts Inc. MH-60R • $3,060,200.00 firm fixed-price contract • Performance period: November 2010 – November 2011 • Depot level manual updates and new development • Awarded to Sikorsky Aircraft Corporation O www.MLF-kmi.com

SUPPLY CHAIN Better Protection The new Pelican HardBack Series of virtually indestructible cases offers ultimate protection in any situation—on the base’s medical station, while traveling, personal use, or as you perform in active duty. The HardBack Series includes: • • • •

Pelican 1055: Protects tablet-type computers and e-readers up to 8 inches, including the Kindle Fire, Nook Color, Galaxy Tab and more.

Pelican 1065: Protect tablet-type computers up to 10 inches including such devices as the iPad, iPad 2 and the Motorola Xoom Pelican i1075: Protects and organizes the iPad or iPad 2, Apple Bluetooth wireless keyboard, power adapter and download cables; includes an integrated easel to allow for hands-free viewing.

Pelican 1085 and Pelican 1095: Features security padlock slots, shoulder straps, and Pick N Pluck foam. Pelican 1085 protects computers up to 14 inches; Pelican 1095 protects computers up to 15 inches.

Uninterruptible Power Supply

Falcon Electric Inc. recently announced that it added a ruggedized wide temperature (-30C to 63C) extended runtime battery bank option to its popular SSG and SSG-RP UPS products. The wide-temperature-rated batteries provide long back-up runtimes for protecting connected computers and instrumentation operating in harsh environments during a prolonged power outage. The new battery pack gives users over 10 times the battery runtime, compared to Falcon’s standard 2U extended battery pack option.

The new battery bank carries a UL listing when powering Falcon’s unique UL-listed SSG2.5KRP-1. UL is pending for the remaining models in the SSG and SSG-RP Series wide-temperature-rated UPS product line. The SSGB-1S40-5U 40AH battery bank is a rugged battery option that consists of eight deep cycle, valve regulated

www.MLF-kmi.com

Compiled by KMI Media Group staff

Robotic USV Refueling Engineers from the NRL Spacecraft Engineering Department (SED) have successfully demonstrated the robotic fluids transfer from a stationary platform to an unmanned surface vehicle (USV) in wave heights greater than 3 feet. The Rapid Autonomous Fuel Transfer (RAFT) project exhibits the ability to track the motion of a Sea Fox naval vessel, safely emplace a magnetic refueling fitting to an on-board refueling receptacle and successfully complete fluids transfer.

“Refueling a USV at sea, particularly in adverse weather or in high sea states, can prove difficult and often dangerous,” said Dr. Glen Henshaw, Attitude Control Section, SED Control Systems Branch. “Transferring our extensive knowledge and proven success of robotic spacecraft servicing can prove equally successful in reducing risks at sea.”

Providing the host ship the capability to refuel USVs without the need to bring them aboard ship enhances mission efficiency and reduces host ship exposure. This works to improve the effectiveness of naval USV missions and decrease risks to personnel and potential damage to vessels and equipment.

Funded by the Defense Advanced Research Projects Agency (DARPA), the RAFT project teamed NRL with Clemson University, Science Applications International Corporation (SAIC) and Space and Naval Warfare Systems Command (SPAWAR). NRL was the lead robotics integrator and designed the robotics system.

Further robotic transfer tests will possibly include landbased autonomous HMMWV applications without the need to stop driving and on-air unmanned aerial vehicle refueling.

lead-acid, maintenance-free 40 amp hour (AH) batteries and two internal one amp chargers. The batteries and chargers are housed in a sleek rack mount enclosure which takes only 5U (8.75 inches) of vertical rack space.

The battery banks may be daisy-chained to provide exceptionally long battery runtimes and can be easily added in the field after the SSG units are installed and in service. In order to ensure a reasonable recharge time, Falcon offers an optional charger system housed in a separate 2U rack enclosure. Each 2U rackmount charger module can support up to two 4 AH chargers.

The 40 amp hour batteries join other options for the industrialgrade SSG UPSs including, an SNMP/HTTP agent board, frequency converter and ICB conformal coating.

MLF 6.3 | 15

Global Supplier

Q& A

Taking Steps to be More Efficient and More Effective Rear Admiral Mark F. Heinrich Commander Naval Supply Systems Command and Chief of Supply Corps

Rear Admiral Mark Heinrich became commander, Naval Supply Systems Command (NAVSUP) and 46th Chief of Supply Corps on July 22, 2011. Previously, he served as commander, NAVSUP Global Logistics Support headquartered in San Diego, Calif.

Heinrich’s additional flag officer assignments include extensive joint experience. He served as director, Logistics Operations and Readiness (J-3/4) for the Defense Logistics Agency (DLA), headquartered at Fort Belvoir, Va. He deployed to Kuwait from June to December 2008 as director of the United States Central Command Deployment and Distribution Operations Center at Camp Arifjan, where he applied deployment and distribution expertise to enable the planning and execution of joint and combined force military operations. His first flag officer assignment was as commander, Defense Supply Center Richmond, Va., the lead supply center for aviation within DLA. The center is now known as DLA Aviation.

Heinrich is a native of southern California. He was commissioned in the Navy Supply Corps following graduation from the Naval Academy in May 1979 with a Bachelor of Science degree in engineering. He also holds master’s degrees in business administration and petroleum management from the University of Kansas. He is also a graduate of the Kellogg Graduate School of Management Advanced Executive Program. He is a member of the Defense Acquisition Corps.

Heinrich’s sea tours included duties as assistant supply officer of USS Kinkaid (DD 965), and supply officer of USS Gridley (CG 21) and USS Constellation (CV 64).

His additional shore assignments included serving as force supply officer on the staff of Commander, Naval Surface Forces; commanding officer of the Naval Petroleum Office; supply officer of Naval Air Station Whidbey Island; executive assistant to the commander, Naval Information Systems Management Center; and special assistant for pollution prevention and compliance in the Office of the Assistant Secretary of the Navy (Installations and Environment).

His personal decorations include two Defense Superior Service Medals two Legions of Merit, a Defense Meritorious Service Medal, and various other awards. He is a qualified Surface Warfare Supply Corps officer and a Naval aviation supply officer.

Rear Admiral Heinrich was interviewed by KMI Media Group Editor-in-Chief Jeff McKaughan.

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Q: In terms of the budget, what are you doing to ensure you’re applying your resources to the maximum in terms of delivering your requirements in the current budgetary environment?

A: The harsh budget environment makes it the commander’s business to know where the taxpayers’ money gets spent. You can no longer assume that good people are making good decisions. Yes, that’s happening, but it’s important to know where your dollars are being spent. Work has to be done to shape the budget. You can delegate financial management but never abdicate your funding execution. The budget environment requires it.

Now that the commander’s intent is clear, NAVSUP is taking multiple steps to make ourselves more efficient and more effective.

We’re leveraging our experience in Lean Six Sigma and continuous process improvement. Green belts, black belts and master black belts are deploying to look at our most challenging processes and take out costs. That’s a top priority.

We’re leveraging new technology. We’ve made a huge investment in Navy enterprise resource planning [ERP] software throughout NAVSUP. Navy ERP integrates our financial and material accounting systems, creating a common, Navywide view. This SAP system is coming on strong. It will provide us greater transparency into our supply system and enable us to improve our asset utilization, further combine purchasing actions, and improve collaboration—both internally and with our DoD and industry partners.

By the end of this year, we should have all our ERP supply system www.MLF-kmi.com

deployments complete, including an additional to 4,000 users this year. This will save millions of dollars Navywide in inventory and IT costs as we work to reduce and then eliminate our dependence on old FORTRAN- and COBOL-based systems that have been around since the 1960s. We are confident that Navy ERP will give us the inventory management and supply system excellence that we can use to increase inventory velocity … and eventually reduce our total inventory costs.

We are also working on organizational change to be more efficient and effective. For example, we have two fleet-focused organizations. The first is the NAVSUP Global Logistics Support Command.

That command is in San Diego with a rear admiral and a senior executive service member as the deputy. The second is the NAVSUP Logistics Operations Center, headquartered in Norfolk, commanded by a Navy captain. We decided we could find efficiencies by combining the two organizations, which we will do this year. The efficiencies we gain include and improve fleet focus, and it becomes easier for people to navigate the NAVSUP organization. Essentially, we’ll have one ‘front office’ providing a single face to the customer … and creating increased agility.

We are changing the way we think about our products. I’ve talked about continuous process improvement, leveraging SAP and organization construct—my last and most important focus is culture. Culturally, we haven’t really thought about ourselves from a product and service perspective. With every product and service that we offer to the fleet, we’re working hard to understand the costs. Our business lines include contracting, transportation, supply management, hazardous material, warehousing, postal and everything else we provide. We’re offering the opportunity for everyone to understand how every dollar gets spent when it gets spent. That even goes for our general administrative costs. We’re targeting them, and once we understand how the dollar gets spent, we’re driving costs down.

Q: In regards to the culture and your workforce—is your workforce a stable workforce that you’re having to adjust to the culture, or are you looking at a younger workforce coming in to reinvigorate that?

A: I have thought a lot about our workforce. On the contracting side, our acquisition workforce is young and coming on strong. When you look at some of our key contracting teams, like the Fleet Logistics Center Norfolk’s contracting team in Philadelphia, about 40 percent are people who have less than five years of service. So we’ve had a youth movement, and I am proud of our contracting officers, some of the best-trained in the Navy. These overachievers are customerfocused and are some of the best contracting officers in the Navy.

They have lots of senior mentors and they will be with us for the next 20 years, which makes us really excited about the future of contracting.

Within the practice of supply management, we have continued to refresh our workforce. Because the challenge of transitioning from an old COBOL or FORTRAN-based system to a new state-of-the-art SAP-based system, we need people who are willing to lead this cultural change. We have a tremendous team of both young people and seasoned employees. At our HQ, we are re-engineering our position descriptions to emphasize ERP, the importance of jointness, the importance of partnering with DLA, with TRANSCOM, and tying in the importance of understanding cross-SYSCOM operations. What we do here—contracting, budgeting, all of the different business cross-cutting operations—is the same thing people do at NAVSEA, www.MLF-kmi.com

NAVAIR and some of the other SYSCOMS. Partnering with these different groups is key!

Q: Can you go into just a little bit more detail about the organizational change? Are there any more structural changes that you think the supply corps should to go through or that you’re planning to take them through?

A: To address that, I need to start with products and services.

Transportation was one of our products and services that existed in two commands, so it was sometimes challenging to visualize our transportation processes when we had two commands responsible for it. As we streamline our transportation processes we’re going to provide a better product. The planning work that was done in one organization, the NAVSUP Logistics Operation Center, often affected the operations and actions of our NAVSUP fleet logistics centers. We have shortened the flash-to-bang efforts, if you will, to get the planners’ plans translated into operational actions.

All of that will take costs out and increase agility. For a smaller organization with the need for quickness, agility is absolutely key.

So I’m very proud of that. Fleet focus is something that I really champion, and I will continue to look at the organization on a regular basis to ensure that we are fleet-focused.

I want to go a couple of steps further and talk about naval logistics integration. Our naval logistics integration effort being led by the 4s of the Navy, the Marine Corps and the Coast Guard will integrate supply systems in those services. This effort is supporting the Marines when they go float on our amphibious assault ships, supporting the Coast Guard when they’re operating in the proximity of our ships, and it’s supporting the Navy when we’re operating in places like the Great Lakes, which have robust Coast Guard infrastructure.

As an example, the Navy builds our littoral combat ships in Marinette, Wis., then we take them through the Great Lakes.

Nobody can say there’s a better organization than the Coast Guard that knows how to operate in the Great Lakes, so our collaboration with the Coast Guard in the Great Lakes makes perfect sense. The Coast Guard has been operating in the Arctic for years. So if it comes to the Navy operating in the Arctic, from a logistics standpoint, the Coast Guard knows how to do that, and we can leverage their experience. When the Coast Guard sends a cutter overseas, nobody has a better husbanding support contracts in a foreign port than the U.S. Navy. It’s a great way to take three sea services and start to build on logistics processes to take cost out and improve support to the warfighter.

Q: Let’s talk about your command here, Naval Supply Systems Command, and how you’re also chief of the Supply Corps. How are the organizations different and what mission does each serve?

A: They are different entities. The Supply Corps is not a command, but a community. I’m the community manager and the leader of a group of more than 3,700 logisticians who wear the uniform—the cloth of our nation—and are committed to supporting the warfighter every day.

The Naval Supply Systems Command is an Echelon II organization within the U.S. Navy, that has very much the same mission—to support the Navy and joint warfighters with everything they need to be effective. We are starting to blend the cultures of the Supply Corps MLF 6.3 | 17

and the cultures of the Naval Supply Systems Command together through common mission statements and similar visions. It is true that we have Supply Corps officers out on the pointy end serving on ships on the line, serving in expeditionary environments, but all of those Supply Corps officers out there should have confidence knowing that the Supply Corps officers and civilian logisticians are committed to supporting them with everything they need to be effective and successful.

I want to talk about the breadth and depth of the Supply Corps.

You have to go back to probably the time of Eugene Grinstead who was a salty three-star admiral, was also a former frogman in WWII, turned supply officer and ended up leading the Defense Logistics Agency [DLA] from 1980-1984. This was before joint logistics was cool, and he said, you can’t beat DLA, so join ’em and lead ’em.

Look at the contributions of the Supply Corps across the joint logistics enterprise now. We’re leaders with our joint national partners: DLA and U.S. Transportation Command. We understand how to leverage DLA and USTRANSCOM. We’ve had a supply officer in USTRANSCOM serving in a leadership position in the past, and we’ll have another flag officer reporting to USTRANSCOM this summer. The contribution of the Supply Corps is—and this is most important—to take naval logistics operations and solutions and bring them to DLA, USTRANSCOM, the Joint Staff, and the COCOMs. Then we take what we learn at these COCOMs and these defense agencies and joint staffs, bring them back to the Navy, and we further enrich the Navy.

The Supply Corps is the vehicle for the cross-pollination between joint logistics cultures and Navy logistics cultures, and we all benefit greatly from it.

Q: Let’s talk about biofuels. The Navy seems to be in the lead as far as participating in biofuel usage and leading that effort. What is your command’s role in that? What part do you play in acquiring, using, holding, storage and things of that nature?

A: I am proud to have recently visited the University of Kansas, where we train the Navy Supply Corps’ energy professionals. The program at the University of Kansas is a combination of classes in the school of engineering and the school of business.

We also have an internship program that we use to train junior fuels officers. We assign them to our Navy deep water fuel terminals and they learn the ideal—the process of bulk petroleum support to our ships and aircraft.

Our active and retired supply officers are present at DLA Energy where DoD’s petroleum contracts are managed to support our warfighters. As a result, the Supply Corps is perhaps the most important community of professional energy managers within the Navy.

Secretary Mabus has defined his strategy, and we have been the ones who have been executing. We’ve collaborated with DLA to execute contracts to buy 350,000 gallons of alternative diesel fuel and 100,000 gallons of alternative jet fuel. Those fuels will be delivered in the Northwest, loaded on a Strike group, and we’ll use them to demonstrate Secretary Mabus’commitment to alternative fuels this summer when we demonstrate our ability to deploy a Green Strike group.

Q: Along with biofuel, ‘going green’ is the catch phrase. Going green is never inexpensive; the first steps are usually expensive.

What is your command doing to take those steps and keep in mind the budget limitations? Where do those two things sync up?

18 | MLF 6.3

A: I know firsthand our commitment to the environment. Our environmental practice exists to ensure our Navy’s ability to operate and train effectively. That is why we have an incredible environmental practice and why we’re so successful, because we understand why we’re there.

I personally served as a special assistant to the assistant for pollution prevention and compliance in the assistant secretary of the Navy’s office, so I know that. This commitment goes far beyond just fuels. We’ve been going green for a very long time and we’re actually putting purchasing guides together for our buyers to have an understanding of how to buy green at their fingertips.

Our centralized, fleetwide programs have been around for years. This includes packaging programs to reduce or eliminate plastic waste on ships. We’re actually working with Amazon, which has a packaging team that’s looking at how to reduce frustration in packaging. We want to work with them and reduce the amount of packaging—where it makes sense—so we have less cardboard and less plastic. And, where we must have plastic, we’re working closely with Army researchers in Natick, Mass., to make it biodegradable.

Q: Awesome. Last year, NAVSUP single supply solution implementation of the Navy ERP planning won an award for best technology. Can you tell me about that program, what that award means and what the next steps are with it?

A: That’s our Navy ERP system, one that I’m very proud of, and that has been our focus for many years, to put an ERP system in place and turn off our legacy COBOL-based systems. Now that we’ve won this award, we need to go further, making the system “hum.”

We are also working with DLA, which has a similar ERP system. We are partnering with Vice Admiral Harnitchek’s team to ensure that our metrics and our presentations look the same. Our goal is to create a presentation on the Web where a sailor can go to one screen and get not just DLA material information, but Navy supply information as well. We want a one-stop shop for NAVSUP’s fleet and joint customers.

Additionally, DLA has done a lot of work building an SAP procurement platform, and we want to leverage their hard work to ensure that we can build an SAP procurement platform for the lowest cost. And the final thing is making sure that SAP systems talk to SAP systems. Lockheed’s got one, DLA’s got one, we’ve got one. Our systems ought to be able to trade data in a common format, so we should be able to share data back and forth. The key to this system is planning, anticipating the buy, and then putting the material on the shelf in advance of customer need. That’s where we make our money. And one last thing, we must position it correctly.

Q: You talked about coordinating efforts with the Marine Corps and the Coast Guard. Can you discuss how you work with the other services? Do the different log supply services communicate with the Air Force to Army, Army to Navy? Do you coordinate that or is it still not quite as seamless?

A: We must coordinate effectively. We have lots of weapons systems that are joint platforms, like the H-60 helicopter. I mean, who doesn’t fly it these days? The Army’s got 2,000 of them, the Navy’s got 600, the Air Force, Coast Guard and the Marine Corps www.MLF-kmi.com

even fly it—so does the Customs Service. You can point to the C-130. Same thing. Who doesn’t fly one these days? Our collaboration with the services and DLA is robust and well understood.

We have demonstrated our ability to collaborate really important programs and we can collaborate on new systems like the Joint Strike Fighter. We know how to do it, but we have to do it more effectively and efficiently. I look forward to working with my friends and professional partners in all of the services as we become more joint in our weapons systems.

I’m sure the Joint Strike Fighter is just the tip of the iceberg.

There are many other opportunities like fuel, medical supplies, construction equipment, uniforms and package patrolling, transportation services, and distribution products. Things like household goods are one of the most joint processes that we’ve ever had.

One of the things that I talked about in the beginning is leveraging Lean Six Sigma to find efficiencies. Here’s one example of how we’re working with our other services and our joint, national partners to make it better: In the old days, within each geographic area, each service had their own household goods office, household goods back office and a central household goods office.

Household goods cost a total of $700 million. We’re improving the costs of our back offices and those household goods counselors; we’re making joint processes in each geographic area.

Q: The DLA manages the parts at the Air Force logistics centers.

I believe the last time we talked, DLA was going to assume some warehouses and some depot management. Has that happened?

If so, is progress satisfactory? Where do you stand with that?

A: We’re very pleased with the progress. We turned over more than 5 million square feet of warehouse space to DLA, and are working with the DLA team to identify savings and warehouse reductions. In the tidewater area, perhaps 30 percent of our warehouse space can be reduced—and we’ve done that by collaboratively working with DLA. Warehousing reductions are hard … we work it one warehouse at a time. What’s stored in it, who’s the customer, how often do people need to get to it, and where else can we store it.

There are no easy wins here. One warehouse at a time. If you work with DLA you find efficiencies.

Q: Asset visibility—knowing what’s in that warehouse and all of the warehouses and the ships and so on—where do you think asset visibility technology is? Is it where you want it to be, or does it need to go further before it’s really going to be effective?

A: I need to work hard to ensure I have an aligned asset visibility plan for the future. It is such a fast moving train that I must always refresh my strategy—it’s something I’ll be doing this coming year.

But in the near term, one of the things I’m very proud of is our advanced traceability and control system, which is a Navy home-grown system that provides excellent visibility of the retrograde coming back from the theater. When you need to track your million-dollar-plus repairables, there’s no better way to track them coming back to the depot than using our advanced traceability and control system. The other services have taken a look at this system and have said they love it. So I hope in the future 20 | MLF 6.3

that that system becomes a USTRANSCOM system and that they help take that to the next level.

Q: Let’s turn now to the sailor and Marine, where everybody travels on their belly, and talk about the dining services, which fall within your lane of responsibility. Tell me about the dining services and food services you’re responsible for.

A: We have a tremendous team here—not just the senior leaders within the Navy who have provided decades of service ensuring effective food service for the Navy. We actually have here on our staff an executive chef, Chef Michael Harants, and a registered dietician, Jennifer Person-Whippo—both part of our food service team led by Commander Danny King, who is leading efforts to improve food in the Navy in collaboration with commander, Naval Installations Command, Defense Logistics Agency, Fleet, and TYCOMS. The Navy laid out three aggressive goals in November 2011 to improve culinary specialists’ [CSs] quality of work—with NAVSUP leading the charge. These goals include incorporating more scratch cooking and bakery products, increasing training, and ensuring appropriate manning levels. These goals ensure our CSs stay proficient in their training, which will ultimately result in guaranteeing sailors receive nourishing, high-quality food.

We have food management teams out in the fleet concentration areas that will go aboard ships and help with training, menus, raw materials and the supervision on the ships. These are things that I think about all the time. If we get it all right, we ensure the Navy’s fighting forces operate at peak performance and are ready to respond to threats worldwide The Navy has about 7,300 CSs who feed more than 92.5 million meals per year. Nothing impacts sailors more on a day-to-day basis than the great food they eat.

As I mentioned before, we’re aiming to offer more scratch cooking on ships. This not only provides tastier meals, but it also helps cut down on trans fats. We are always aiming to reduce fats, sodium and sugars in our recipes, while balancing output with good taste. Sliders will always be the number one favorite, but there is plenty of room for our CSs to interject their creativity and skills into everyday menus to make them interesting, tasty and nutrient-rich.

Q: Sounds great. Last question: Is there anything else you’d like to add about the men, women and mission of Navy Supply?

A: We’re 217 years into the history of the Navy Supply Corps. The Naval Supply Systems Command has been around for a very long time as well. Our business has transformed and I credit that to my superb team of military and civilian employees. They are truly the best of the best. It’s a fast-paced environment and it’s going to move even faster.

I’d be remiss if I didn’t mention the tremendous support I get from our national partners, our allies and industry partners. So beyond just the relationships inside of DoD, we’re working very hard outside the department, as well.

In closing, I have a great team in the Naval Supply Systems Command and the Supply Corps. I am confident that we will continue to adapt and face the challenges that are brought before us and succeed in supporting the needs of the warfighter and improving the quality of life for our sailors and their families. O www.MLF-kmi.com

Long gone are the days of Ouija board logistics. Today’s supply chains are managed to every detail.

By Bill Murray MLF Correspondent

With the drawing down of military presence in Iraq, followed by the eventual end of the war in Afghanistan, military logisticians are under increased pressure to lower sustainment costs to shrink their “tail.”

Add to that reality the growing likelihood of sequestration in the DoD budget—$500 billion in across-the-board budget cuts spread out over 10 years beginning in January 2013—and efficiency becomes all the more important.

“It creates a tremendous pressure on logistics,” said James Curtis, vice president of defense logistics at SRA International. “We need to squeeze out the inefficiencies.”

As much as 70 percent of total life cycle costs in logistics are associated with operations and maintenance. According to Alan Heckler, a principal with A.T. Kearney of Chicago, 50 percent of maintenance costs are replacing parts in the supply chain. Being able to predict with sufficient accuracy the demand for spare and replacement parts is therefore becoming more important.

As a sign of the stress on reduced logistics costs, the Air Force Materiel Command in November 2011 announced its plans to reduce the number of its centers from 12 to five. This move, according to the Air Force, will cut overhead costs and redundant layers of staff and is savings $109 million annually while improving AFMC’s overall management and lines of communication.

“With organizational alignment of the five-center concept, the Air Force will have one belly button to push for logistics and support,” Heckler said. He advocates single line accountability for its benefits and cost savings. “The system support manager will have responsibility for cradle-to-grave sustainment, which is the way it should be. They are spot on by doing better by doing differently,” he said of the Air Force.

Contractors seem to be in the mix increasingly in the constrained budget environment. “We use demand planning and forecasting to help determine proper stocking levels, when to buy products and where to stock them—most notably DLA’s Tires Successor Initiative and DLA’s Privatization of Chemicals and Packaged Petroleum, Oils and Lubricants,” said John Haima, an SAIC senior vice president. His company holds more than 20 large DoD supply chain management contracts.

“On these contracts, our success is highly dependent upon effective demand planning and forecasting. We use a combination of different demand planning and forecasting models that are embedded in our Integrated Logistics Toolset, which includes both COTS and SAICproprietary models and tools.”

What Heckler sees is military organizations working closer to predict demand and manage the risk of having too much supply with warfighters, program officers, primes and subprimes. “Organizations like Wal-Mart and Intel found that it wasn’t enough to have world-class IT systems,” Heckler said. “Everyone has the same goal [in the military]: an agile value chain.” He also sees military organizations outsourcing more work to third-party logistics providers.

According to SRA’s Curtis, the comparisons to the supply chains of Fortune 500 companies such as Apple, FedEx and Wal-Mart are limited.

“They know what their stores need,” he said of Wal-Mart. “Their stores are all the same.” In contrast, the U.S. military is “much more reactive to conditions on the ground,” in its supply chain, which affects demand planning and forecasting, according to Curtis. He argues that the www.MLF-kmi.com

just-in-time logistics model used by many large corporations doesn’t apply to the U.S. military’s operating environment. The military does benefit, however, from the new technology insertion that DoD’s contractor community can help it accomplish onto existing programs and contracts, according to Curtis.

The stakes are high for effective demand planning and forecasting since it is very expensive to ship unneeded items to forward operating areas, and it is also expensive to warehouse excess goods.

Through his duties with SRA International, Curtis works with the U.S. Transportation Command at Scott Air Force Base, Ill., which is implementing the Advanced Transportation System for the 21st Century. SRA International also helps manage the Defense Personal Property System, a web-based system to help military and civilian employees of DoD better manage permanent change-of-station moves.

Program managers, as a part of this effort of working together with a virtual team, are more inclined now to give the same visibility to supply logistics portals to warfighters, primes and subprimes, according to Heckler. “There’s a new version of collaboration across the food chain,” he said. “In the past, logistics was very much about meeting the demands of the customer,” but not engaging with the supplier base as much. “The tail end of the dog has the same visibility as program officers” of web logistics portals, he said.

Defense Logistics Agency spends $38 billion per year to manage 95 percent of the repair parts procurement for all of the armed services as well as 100 percent of the food, fuel, medical supplies, clothing and construction equipment across the Department of Defense. DLA activities reach 126 nations with 520,000 shipments annually and 54,000 requisitions in any one day. It manages over 5 million items in eight supply chains across 26 distribution depots. DLA employs over 160 demand planners, some of whom are deployed to theater at any given time.

The military has learned a great deal from commercial logistics companies, with many innovations started in the oil and gas industry and then practiced in the commercial airlines industry before military leaders began implementing them, according to Heckler. Just like in a commercial enterprise, military leaders don’t want to have too few of a particular weapons part, for example, to meet demand. They also don’t want to have too much, since the supply chain has to operate efficiently, with any unnecessary costs diminished.

In the late 1990s, DLA began to replace its decades-old legacy systems with an SAP Enterprise Resource. DLA started feeding the JDA tool with data in 2003.

In 2006, all items subject to demand forecasting were in the system.

DLA has more than 5 million items in their catalog and at any given time about 1.5 million are active. Of the active, about 300,000 were replenishment and therefore relatively easier to forecast.

“There are many capabilities in almost all of the commercial enterprise resource planning (ERP) products on the market,” SAIC’s Haima said. He added that DoD has “faced the same challenges” as commercial enterprises to adapt ERP tools effectively to meet their customers’ particular needs. Demand planning needs to reflect those differences.

“The quality of demand planning and forecasting is in choosing the ‘best fit’ model and then acting upon the implication of the forecast.

There is still some art mixed in with the science. That’s where our deep MLF 6.3 | 21

knowledge of the customer and the mission come in,” Haima said.

“DoD is making steady, solid progress and is devoting significant resources to improving their forecasting tools,” he concluded.

Kearney’s Heckler said the decision support tools tend to dominate “90 percent of the coverage,” but probably only merit about 10 percent of the conversation about demand planning and forecasting. “Those tools are very good,” he said. “They’re not enough to move the needle, so to speak, but they’re good at automating [demand planning] and availability demand. Nothing is the panacea.”

One fallacy of decision support tools, in Heckler’s mind, is that they can help military planners “make the wrong decision faster,” when users input inaccurate data into them. Heckler calls this phenomenon “garbage in, garbage out.”

Another misunderstanding of military logistics systems, in Heckler’s mind, is the assumption that some onlookers have that military logistics systems lag behind logistics systems of a similar scale in Fortune 500 companies. According to fill rates in spare parts, however, some DoD organizations are reporting a 60 to 70 percent performance, which is similar to the fill rate of commercial airline companies.

The environments in Afghanistan and Iraq are highly dynamic, according to Haima. “That places extraordinary emphasis on adapting our demand planning and forecasting to the ‘real world’ variances at the ‘tip of the spear,’” he said. “This increases the need to use ‘causal modeling,’ the use of independent explanatory variables to predict demand, over and above more traditional methods.

“Most forecasting and demand planning software rely on simple time series models that leverage the past demand observations to forecast the future demand,” Haima said. He calls past demand observations “the rear-view mirror.”

“The dynamic environment in Iraq and Afghanistan drive more reliance upon causal modeling,” Haima said. “Maximizing our collaborative demand planning techniques allow us to react quicker, resulting in SAIC buying the right products in the most economical quantities in advance of order receipt and subsequently fulfilling orders on time.”

With the decrease over time in purchasing new military planes and weapons systems due to a shrinking budget, Inventory Locator Service LLC of Memphis, Tenn., is seeing a steady increase in its work with the

military, according to Ryan Brown, manager of market intelligence solutions with ILS. The company works with the Air Force, DLA, Coast Guard and foreign militaries to find parts for older weapons systems with expired warranty agreements.

“Once DLA can no longer get it, then they’re on their own,” Brown said of military organizations seeking to replace parts on older weapons systems. “Especially now that budgets are getting cut, we see more interest,” he said. “There’s more business growth as people stop buying airplanes,” and need to use their existing fleet longer. ILS works both with military agencies and defense contractors. “The lead time with ordering parts from a manufacturer can be long,” he said.

To effectively engage in demand planning and forecasting, Brown suggests surveying the aftermarket for parts to determine both the supply and demand that exists for them. It’s important to note trends.

If there is hearty demand of particular parts but limited supply, it makes sense to stockpile those parts, according to Brown. Conversely, if the supply for a part is robust but the demand is weak, then military organizations can order more conservatively, confident that these parts will be readily available when they need them and that there’s no need to worry about obsolescence.

To engage in effective demand planning and forecasting also requires one to effectively gauge failure rates for particular parts, according to Brown.

SRA’s Curtis credits the military for improving its demand modeling, which he calls a precursor to moving equipment across the supply chain. “They’re using better analytics,” he said.

Haima calls this field “knowing the demand environment,” which is critical for the company to be able to use the appropriate model for demand planning and forecasting. “We have a deployed staff of fieldbased customer support representatives that work with our end-user clients CONUS and OCONUS,” he said. “Part of their responsibility is to help identify changes in production schedules and trends in parts usage that impact demand as early as possible. We then take this collaborative demand data and feed our Integrated Logistics Toolset forecasting models. Our staff of inventory planners then works to interpret the forecast data to make optimal inventory buying decisions.” O

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Many take logistics for granted—though never the logistician.

By J.B. Bissell MLF Correspondent

Not too long ago, a university professor of business told me he was surprised every time he walked into the corner coffee shop and the barista poured him a cup of joe. His amazement didn’t stem from the inflated cost of the mocha latte or because it tasted so good. No, he was astounded that they actually had the beverage to serve in the first place.

He explained that the coffee beans were grown in Colombia, had to be processed and packaged, and shipped to America where they would be distributed to various outlets before being roasted, ground up and finally run through the espresso machine. When he put it like that, his sense of wonder at a simple cup of coffee seemed justified.

We were discussing supply chains and how important they are to a successful business model. Turns out, materiel logistics are just as critical to mission success for the armed forces operating in Afghanistan—more so, actually, since military supply delivery can be a matter of life and death, not just a tasty macchiato.

And it’s even more complicated. “There are a variety of routes through which material moves into Afghanistan,” said Lieutenant Colonel Robert A. Benjamin, who is part of Joint Sustainment CommandAfghanistan’s Support Operations group at Kandahar Air Field.

The majority of the needed cargo is shipped aboard sea-going vessels to a port, where it is unloaded and trucked into theater. Some equipment is flown on either a commercial or military aircraft, while other supplies travel the NDN (Northern Distribution Network), which channels “cargo from sea ports in Europe through overland routes to the border crossings at Hairaton and other towns in northern Afghanistan,” Benjamin explained.

“Coordinating these movements requires close cooperation among a variety of stakeholders, including strategic partners such as U.S. TRANSCOM, U.S. Air Force, Surface Deployment and Distribution Command, Defense Logistics Agency, CENTCOM Deployment and Distribution Operations Center, USFOR-A, Joint Sustainment CommandAfghanistan and various contracted goods and service providers.”

As complicated as it all sounds, one of those service providers manages to maintain a relatively simple perspective on the entire process.

“The supply chain that we follow for our military customers is our commercial supply chain, modified to account for the difficulty of ensuring that the parts reach the end customer,” said Jim Grooms, director of integrated logistic services for Navistar Defense.

Ground Support Navistar’s niche in that supply chain is providing “tactical wheeled vehicles and military-grade commercial off-the-shelf vehicles that the armed forces use for logistics—to move equipment and people,” said Elissa Koc, Navistar’s manager of communications.

Navistar Defense officially got started in 2004, but the company, previously known as International Harvester, has actually been around for more than 100 years, building trucks, buses and engines. www.MLF-kmi.com

No matter which conflict Navistar is supporting or which vehicle the military is using, though, one thing the company has learned is that the delivery of the automobile is just the beginning of successful in-theater material delivery. “Vehicle sustainment is key,” Koc continued. “We have a global support network—more than 1,100 locations throughout the world, including Iraq and Afghanistan—to keep our vehicles mission ready. In theater, we also have field service representatives ready to handle vehicle maintenance and repair battle damage.”

Sometimes it’s not the means of transport that require attention, but the network of roads that cause problems. “Initially, the U.S. military partnered with commercial carriers, including Maersk Line, Limited (MLL), to develop the Pakistan ground line of communication (PakGLOC),” said Torben Svenningsen, senior director of government sales, MLL. “Due to the vulnerability of supply chains, however, the need for multiple routes into Afghanistan became apparent.”

In fact, PakGLOC was closed in November 2011. Svenningsen, along with many other men and women who oversee the transport of supplies to American troops, realized that “the ever-changing security environment of this region of the world continues to drive the need for new and innovative supply chain solutions,” he said.

One of those solutions is the aforementioned NDN, a series of varied supply routes that run into and from Afghanistan through gateways in Northern Europe and the Black Sea. And while MLL is probably best known as an ocean carrier, since the beginning of Operation Enduring Freedom, the company has been acting as a fullservice distribution provider, moving cargo by sea, through ports, and ultimately over land to the major operating bases in Afghanistan.

“MLL is well positioned to meet the requirements of the U.S. military and strives to expand and enhance the capacities of the Northern Distribution Network,” said Svenningsen. Once the NDN was established, “commercial carriers, MLL included, started expanding their NDN networks significantly, adding rail and truck routes to mitigate political, infrastructure and throughput risks.”

This type of forethought paid off, because once the Pakistan/ Afghanistan border crossings were shut down, “the NDN became the primary means of land-based transportation into Afghanistan,” explained Svenningsen. “The multiple corridors that encompass the NDN have served as alternative routes for cargo that would have normally moved via the PakGLOC. This mitigated potential supply issues. In addition, Maersk’s global U.S. flag network of ocean-going ships allowed for cargo bound for Pakistan to be quickly diverted and successfully moved to ports in Northern Europe for transportation on the NDN.” Another solution, of course, is to avoid long, multi-country, landbased transportation operations and border crossings altogether. “The C-5M Super Galaxy is redefining the art of air mobility operations,” MLF 6.3 | 23

said Chad E. Gibson, communications manager, Lockheed Martin Aeronautics. “It is the first U.S. Air Force aircraft to perform a direct polar overflight delivery mission from Dover, Del., to Afghanistan.”

By delivery, Gibson is referring to an almost incomprehensible payload of goods. “The C-5M is the first true strategic airlifter capable of unrefueled global reach in excess of 5,000 nautical miles with a full wartime payload of 122,000 pounds,” he continued. “This is combined with the ability to carry all Department of Defense cargo. The C-5M is the only aircraft capable of carrying 100 percent of certified air-transportable freight and has a dedicated passenger compartment enabling commanders to have troops and their equipment arrive in an area of operation simultaneously.”

Direct-to-theater dispatches of this sort are unprecedented and invaluable to soldiers in Afghanistan. “Flexibility, reliability and speed are the necessities for successful warfighter support,” continued Gibson. So it’s not a coincidence that the end result of Lockheed Martin’s Reliability Enhancement and Re-engining Program (RERP) created an aircraft with these exact characteristics and attributes.

“The more than 70 improvements we made to the C-5M during RERP helped reduce a day in the resupply process by eliminating an en route stop,” Gibson said. “Additionally, many of the required resupplies have been large, oversized tanks and other equipment.

This is tailor-made for this plane’s capabilities.

While the C-5M has definitely provided some very recent advances to forward logistics, Lockheed Martin’s C-130 Hercules continues to be an important cog in the overall supply chain. “It was designed as a theater airlifter for the insertion, extraction and resupply of troops to, and those already in, theater,” said Peter Simmons, communications manager for Lockheed Martin’s C-130 program.

“It’s still the most in-demand resupply asset because it allows for both rapid ground offload of troops and supplies, as well as aerial resupply.”

Certainly some of the reasons for the C-130’s popularity are obvious: “It can operate from rough dirt strips, and can perform in one day what it would take 60 trucks to achieve,” Simmons said.

Simmons, though, believes there’s more to it than just that. “It is always necessary to look at what the customer and end-user need,

not what it is perceived they want,” he explained. “So often technology drives planning, where the reverse should be true. In many of today’s theater scenarios, it is the simple and ‘effective’ technologies that are needed as opposed to a high-cost, high-complexity solution.

“The C-130 Hercules has demonstrated for decades that it is often a product that addresses the basic requirements that has greater theater longevity. ‘Get things to theater and then move them around theater.’ Those were the original requirements for the C-130.

Very simple.”

Whether equipment and supplies get to and around Afghanistan by means of the NDN or aboard a C-130, one of the most important behind-the-scenes tasks is to keep track of it all.

Benjamin noted that “a number of innovations have helped improve the supply chain. One of those is more of a process than a product: The notion of end-to-end distribution works to streamline the entire shipping process. Rather than creating iron mountains of supplies and acres of depots to support our efforts, we rely on a more responsive and flexible demand-based system that pushes supplies directly from the originator to the end-user.”

In order to make this work, however, commanding officers need to know what’s available, where it is and when it’s needed. That’s where Honeywell Technology Solutions Inc. (HTSI) can enter the equation, with property accountability services.

“Property accountability of assets, especially in-theater provided equipment, remains a difficult challenge,” said James Kennon, acting vice president for logistics at HTSI. “Given these austere times, the military has been tasked to do more with less. By performing detailed analysis of equipment data—everything from location to condition—we provide the ability for the military to make the bestinformed decisions about sourcing equipment for future missions.

Being able to provide the military a clear and concise picture of what resources are available saves time, money and ultimately lives.”

“Honeywell is able to help the military view the larger picture by managing global inventory, maintenance and operations,” said Kennon. So just like the college professor who is able to get a cup of coffee every morning, soldiers are sure to have everything they need to successfully complete their missions while in theater. O

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Market research looks at metrics to develop a comparable ranking of the industrial supply chain

By Ray Barger Jr. and Jane Feitler elements for the aerospace and defense market.

This article summarizes that research on the Aerospace & Defense (A&D) Top 25 supply chain companies’ performance for 2011. This is the third year we’ve listed the A&D Top 25 firms. As part of our 7th Annual Supply Chain Top 25 research, over 200 manufacturing companies were analyzed on supply chain financial metrics: ROA, inventory turns and revenue growth. In addition, Gartner and industry supply chain peer opinions were added to create a total composite score for each firm. Results for 2011 included both A&D prime contractors and major subcontractors. The goal is to raise awareness of the supply chain discipline and describe how A&D companies are positioning their supply chains to cope with industry changes. We also discuss key trends we are seeing in top A&D firms.

Key Findings •

•

•

•

•

Changing markets resulted in declines in Top 25 A&D metrics, so firms are re-positioning for flat or declining Western defense spending, and for growth in global defense and commercial aerospace markets—fulfilling commercial backlogs is currently constrained by supplier capacity.

Mergers and acquisitions (M&A) and program/platform terminations are impacting firms’ industry positioning, growth opportunities and talent requirements.

Performance based logistics (PBL) sustainment contracts of >5 years are the “new normal” as reduced budgets drive longer service life cycles for existing platforms.

Leading A&D companies are focused on sustainability compliance and on achieving cost savings by actively managing reductions in emissions, waste and power usage.

Security is increasingly important in A&D supply chains, including cyber-threats and counterfeit part detection and control.

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Recommendations •

•

•

• •

Position for growth in commercial aerospace, global defense and emerging markets. Assess your core competencies, supply chain design and the capacity/flexibility of your key supply partners.

Re-assess your supply base, and reconsider your supplier segmentation and risk management practices for the “new normal.”

Get closer to customers and prospects in commercial aerospace and global defense, including demand for both production and life cycle services; enhance cost management capabilities to estimate life cycle costs and support trade-offs.

Review your organization structure to leverage common processes and shared resources—re-assess talent requirements.

Expand sustainability programs and security measures to help further reduce costs, ensure compliance and mitigate corporate risk.

Analysis With aggregate Western defense demand being reduced and aerospace backlog increasing, the demands on companies to effectively manage supply chain strategy, capability and execution has never been greater. Lockheed Martin is once again ranked as the No. 1 A&D company. The company leads the nine prime contractors included in this year’s A&D supply chain ranking, based on composite score. Major A&D subcontractors are broken out for the first time this year, and they did not fare as well as the prime contractors.

While A&D as an industry vertical did not break into the overall, global Top 25, both Lockheed Martin and Raytheon are listed in the Next 25.

MLF 6.3 | 25

The past year has been challenging for the A&D Top 25. In prior years, firms (*) may have been ranked in another industrial vertical. Return on assets (ROA) and Inventory Turns were down slightly from 2010 levels, but a 38 percent drop in threeyear weighted revenue growth from 7.5 percent to 4.6 percent confirms a transition to a slower growth period for DoD/ MoD prime contractors.

Comparing 2011 to 2010, A&D industry average inventory turns were down from 8.3 to 6.7 turns, prompting companies to more closely manage inventories and working capital. Some major subcontractors have been M&A targets in the past and may be in the future; alternately, some of these major subcontractors may acquire other companies or divisions to gain leverage, or to expand and rebalance their defense/commercial mix.

Key Capabilities for A&D Companies In response to changing market conditions, we’ve found seven key capabilities this year that are impacting supply chains now and will into the near future. Top 25 A&D companies typically exhibit many, if not all, of these capabilities. The table,

however, provides only one example per capability.

Looking Forward – Challengers For 2012, we are closely watching Boeing and UTC for very different reasons.

Boeing has the opportunity to move up the rankings as the 787 Dreamliner and 747 freighter production programs get underway along with the USAF KC46A tanker program. Boeing has had to do some production balancing with its supply base to synchronize ramp-up activities, and we’ll be looking to see how effective their supply chain team is in stepping up to these supplier, production and 767-derivative tanker platform challenges.

As a major subcontractor, United Technologies (UTC) is using M&A to gain scale, reorganize and obtain a more diverse commercial/defense product and service portfolio. The pending consolidation and reorganization will challenge the new supply chain leadership to align processes and suppliers to realize economies of scale during a period of great market flux. O

Table 1: Gartner Supply Chain Top 25 for 2011: Aerospace & Defense (A&D) 2011 A&D Rank

Company (in A&D Ranking)

Prime Contractors 1

1

Lockheed Martin

2

2

Raytheon

3

4

Northrop Grumman

4

3

General Dynamics

5

5

BAE Systems

6

7

Boeing

12

8

Bombardier

13 14

Finmeccanica 9

EADS

Major Subcontractors 7

*

United Technologies

8

ITT

9

Rolls-Royce Group

10

6

L-3 Communications

11

*

Honeywell International

15 16

Ray Barger, CPSM, CSCP, BB, and Jane Feitler, PhD., are research directors, Supply Chain Research, Gartner Inc.

2010 A&D Rank

Textron *

Thales Group

Note: Lockheed is #1 in the A&D Top 25 but ranks 30th in our ranking of over 200 global manufacturing companies.

Table 2: Key Capabilities of A&D Companies

Key Capabilities

Description

Examples

Develop Alliances and Offshore Opportunities

Companies are expanding commercial aerospace alliances, and are cultivating more domestic government/agency and foreign MoD opportunities.

General Dynamics acquired Vangent Inc. to expand its federal health care business.

Utilize Supply Chain Segmentation

Supply chains are using segmentation to become more efficient, responsive and agile, and to consciously understand metrics trade-offs.

UTC has segmented its strong global aftermarket support network, which uses facilities rationalization and low cost sourcing as part of its five-year plan.

Review Supply Base

Companies are reassessing their existing supply base for global footprint and upside commercial capacity. Suppliers are being leveraged and managed, based on spend and volume, supply factors, market opportunities and relationships.

Lockheed Martin manages its best-value suppliers based on business requirements, supply base rationalization, cycle time savings, oversight cost reductions and weighted evaluation criteria.

Assess Organization and Talent

Companies are changing and consolidating organizational structures and using center-led councils and corporate centers of excellence (COEs). Talent management and skills training are seen as globally significant issues.

Rolls-Royce is leveraging off-shore government support to train new hires to produce jet engines.

Evaluate Cost Management Practices

Cost management capabilities are being reassessed. Supply chain organizations are collaborating with Finance and Human Resources to train or hire financially capable supply chain personnel.

BAE uses its “Supply Chains in the Twenty First Century” (SC21), including cost modeling, to help identify and gain supply chain efficiencies.

Build in Sustainability

Sustainability is a key to brand reputation. Cost savings and avoidance, recycle/reuse and corporate sustainability goals also work with increasing compliance demands.

In 2011, the U.S. EPA awarded Raytheon their 4th Energy Star Sustained Excellence Award for their successful strategies and programs to reduce energy consumption, improve energy efficiency and cut their greenhouse gas emissions.

Investigate Supply Chain Security

Supply chain processes and controls are needed to ensure sourcing traceability and counterfeit prevention. Use reputable suppliers with upstream quality and testing processes.

Supply chains must collaborate with IT to ensure customer and supplier related processes and portals do not compromise network security, export controlled sensitive technologies, corporate Intellectual Property (IP) or other competition sensitive data.

Exostar is working with many primes, subcontractors and suppliers to enhance trading hub portal security through improved user authentication and control, and to reduce risk through greater upstream supplier visibility.

For more information, contact Editor-in-Chief Jeff McKaughan at jeffm@kmimediagroup.com or search our online archives for related stories at www.mlf-kmi.com.

26 | MLF 6.3

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The advertisers index is provided as a service to our readers. KMI cannot be held responsible for discrepancies due to last-minute changes or alterations.

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NEXTISSUE

May 8-10, 2012 AUSA Sustainment Symposium Richmond, Va. www.ausa.org May 14-16, 2012 Army National Guard Logistics Management Seminar Austin, Texas www.technologyforums.com May 21-24, 2012 Environment, Energy & Sustainability Symposium New Orleans, La. http://e2s2.ndia.org June 4-8, 2012 GEOINT Community Week Washington, D.C. area www.usgif.org

July 16-18, 2012 Performance Based Life Cycle Support Washington, D.C. www.wbresearch.com/pblusa/ July 25-27, 2012 Performance Based Logistics Alexandria, Va. www.pblusa.com June 25-27, 2012 Military Logistics Summit Washington D.C. www.militarylogisticssummit.com August 13-15, 2012 Tinker and the Primes Oklahoma City, Okla. www.tinkerandtheprimes.com/index.php September 9-12, 2012 NGAUS Conference Reno, Nev. www.ngausconference.com/12NS May 2012 Vol. 6, Issue 4

The Publication of Record for the Military Logistics Community

Cover and In-Depth Interview with:

Lt. Gen. Raymond Mason U.S. Army Deputy Chief of Staff, G-4

Special Section

Life Cycle Management

SPecial Pullout Supplement

With budget stress, there is heightened awareness on managing program costs over the life of a program.

Features

LOGCAP Performance Measuring success in the Logistics Civil Augmentation Program.

Aerial Delivery Resupply via air is great. Precision unmanned resupply is even better.

Shelters & Shelter Support Keeping the elements out and the occupants dry and comfortable.

Equipment Diagnostics Using internal and internal monitoring systems to track equipment health.

This special pullout supplement will feature a detailed look at the 309th Maintenance Wing, Ogden Air Logistics Center with an exclusive interview with Colonel Allan Day, the 309th’s wing commander. Other features include an insightful article on doing business with the Center plus a profile of their top critical contracts.

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MLF 6.3 | 27

INDUSTRY INTERVIEW

Military Logistics Forum

Donald J. Wetekam Senior Vice President, Government & Defense Business Development AAR Corp.

Donald J. Wetekam joined AAR in 2007.

He served 34 years in the U.S. Air Force, retiring as a lieutenant general after his final assignment as deputy chief of staff for installations and logistics. Prior to that, Wetekam directed operations at the Warner Robins Air Logistics Center and held several key leadership positions in aircraft maintenance and supply chain management.

Q: Please provide some background on AAR and the company’s work with DoD in the logistics arena.

A: AAR provides comprehensive supply chain management services to the U.S. government and its allies and to OEMs that support military programs. We started supplying aircraft parts to the military in the early 1980s. In 2000, the company won its first major defense contract for a tip-to-tail supply chain program.

Today, our programs cover the entire supply chain from forecasting, procurement and inventory warehousing to distribution, component repair management and overall program management. For many customers, we have dedicated program operations and customized IT solutions to ensure rapid response and reliable parts availability.

Q: Please indicate the primary business areas of AAR and briefly explain the functions of each.

A: AAR’s corporate structure has four main business groups. The first encompasses supply chain management and engine parts management—this was really the core of the company going back to its founding in the 1950s.

Secondly, there is a maintenance repair and overhaul group which has grown to be the largest independent provider in North America.

It’s largely commercial-based, although we are seeing an increasingly amount of government work in that sector.

The third area is our manufacturing segment, called structures and systems. This group is largely governmental, focusing on mobile shelters, air transportable containers, design and build of cargo products and systems for aircraft and also precision fabrication capabilities.

Our fourth group is government and defense services—built around our airlift and communications technology businesses. We operate a fleet of over 60 aircraft and are Trans28 | MLF 6.3

includes lean initiatives and efficiency improvements across all of our operations.

Q: How is AAR ready to meet the challenging DoD budgetary times that are ahead?

portation Command’s largest expeditionary airlift provider in Afghanistan.

Q: As a major player in the military logistics arena, how is AAR helping DoD meet current key logistics objectives?

A: There is a variety of answers to this—I’ll give you a few examples. The 463L pallets that DoD uses to move their material are almost exclusively from AAR, along with our containers and others. We provide expeditionary airlift for the transportation command and also for the U.S. Navy. Since 2005, we’ve flown more than 90,000 missions, transported 850,000 personnel and delivered 140 million pounds of cargo and mail.

We also manage supply chain for strategic weapons systems throughout DoD, including the entire KC-10 fleet, as a team member to Northrop Grumman.

Q: What are some of the new programs you are working on in partnership with DoD agencies and the military services?

A: Throughout AAR’s history, there have been periods where the commercial aviation businesses saw decline due to worldwide economic challenges, most notably after 9/11. We had to shift our business model considerably and faced a number of challenges similar to what DoD is facing now. Our experience during that time and afterward was key to realigning our focus, and we believe that we can bring that same experience and focus to DoD. We recognize that the military’s needs and challenges are quite different, but there are a number of things we learned during the commercial downturn that can be applied here. For example, on a recent project, we recommended applying a proven, safe and efficient commercial model for using overhauled engine parts. They followed that recommendation and saved in excess of $35 million on one program alone. We work closely with DoD, making recommendations that were successful on the commercial side and have real potential on the military side, and as a result, are moving up the value chain as a trusted supplier.

Q: How has AAR positioned itself and prepared for 2012?

A: AAR has a number of recent programs; the KC-10 fleet supply chain operation and the airlift capabilities previously mentioned are both fairly recent. We have also introduced some new products in the shelter business including a lightweight, multi-purpose shelter that is electromagnetically shielded.

A: The pillars of our strategy remain the same: a customer-centric business model, a solid financial position and continual investment in diverse capabilities that align to customer and market needs.

Q: What are some of the main challenges you are facing in meeting the needs of the 21stcentury warfighter?

A: We plan to further diversify the business and find additional ways to serve our customers within our current U.S. network and by branching out to other international governments.

A: Keeping up with the demands and changing global footprint is important to us—we go where the military goes. We have to change our operating environment as they change their operating environment. We also face budgetary pressures, just like they do. We understand DoD’s requirements for better value for their defense dollar, so we’re driving cost out of our own processes to remain competitive. This

Q: What are your goals for 2012?

Q: Are you involved in partnerships with others in the industry?

A: Yes, we have a long proven history as a top-tier supplier to some of the large defense primes and we have increasingly taken on the role of the prime contractor in select markets, as well. O www.MLF-kmi.com

Coming in June 2012

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Featuring: Exclusive interviews with Vice Admiral Mark Harnitchek, DLA’s Director, and Redding Hobby, the Deputy Director of DLA’s Logistics Operation.

Vice Admiral Mark Harnitchek

Redding Hobby

This DLA-focused issue will look at the importance of partnerships to DLA, their supply chain, strategic supplier alliances, and their medical, clothing and textile supply chains.

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Military Logistics Forum For more information on reaching the DLA, contact Jane Engel, MLF associate publisher, at 301.670.5700 x 120 or jane@kmimediagroup.com