MLF 6-6 (July 2012)

AMC 50th Anniversary Issue with Commemorative Poster

The Publication of Record for the Military Logistics Community

U.S. Army Materiel Command

Special Pull-out supplement

Warfighter Supplier John B. Nerger Executive Deputy to the Commanding General U.S. Army Materiel Command

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July 2012

Volume 6, Issue 6

Exclusive Interview with:

James Dwyer

Deputy Chief of Staff G4 U.S. Army Materiel Command

End-to-End Supply Chain O Army Depots O Joint Munitions Command Partnerships O Sustainment O Logistics Transformation

Military Logistics Forum

July 2012 Volume 6 • Issue 6

Features

Cover / Q&A

Managing the Ammunition Enterprise Military Logistics Forum had the chance to sit down with Brigadier General (P) Gustave F. Perna and talk about the role of Joint Munitions Command and the Joint Munitions and Lethality LCMC.

8 Providing the Decisive Edge for 50 Years A commemorative poster celebrating Army Materiel Command’s 50th anniversary.

11 End to End During the 1990s, the Department of Defense studied how it could depart from older concepts of stockpiling supplies and emulate private industry concepts of lean inventory management. The answer in many cases is to take an end-to-end approach.

By Peter Buxbaum

13

Who’s Who U.S. Army Materiel Command

John B. Nerger Executive Deputy to the Commanding General U.S. Army Materiel Command

Special PULL-OUT SUPPLEMENT

1

21

Exclusive interview with

James Dwyer Deputy Chief of Staff, G4, U.S. Army Materiel Command

4 8 13

Army Materiel Command Office of Small Business

By Kelly Fodel

Depot Excellence

2 Editor’s Perspective

AMC’s Top Critical Contracts

4 Log Ops

Sustaining Major Platforms

26

Managing the supply chain and integrating materials efficiently are critical to the economic sustainment of defense assets. These tasks are done somewhat differently in different platforms, with the government or industry playing varying roles.

By Henry Canaday

Partnering for the Future

30

6 People 18 Supply Chain 35 Resource Center

Partnerships between contractors and military organizations for depotlevel maintenance and repair activities, in addition to performance-based logistics contracts, are allowing DoD to save millions of dollars annually.

By William Murray

Logistics Transformation

32

Departments

Global logistics professionals know that streamlining the materials delivery process and maximizing efficiencies across the supply chain are integral, ongoing parts of any effective transportation operation. Nowhere is this more true than in meeting the often changing supply needs of U.S. military.

By Christian Bourge

Better Decisions—Faster www.promodel.com/army

Accelerating the Army’s Logistics Readiness with Leading-Edge Predictive DecisionSupport Technology

Industry Interview

36

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June Shrewsbury Vice President of Technical Services Lockheed Martin Global Training and Logistics

Military Logistics Forum Volume 6, Issue 6 • June 2012

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EDITOR’S PERSPECTIVE As the principal supplier of virtually everything to the Army, the recognition of Army Materiel Command’s 50th anniversary in this issue is particularly appropriate. Activated on August 1, 1962, AMC has led the way for the Army’s procurement and R&D. It is also noteworthy to recognize the role the command is playing in the current budgetary conditions. John Nerger, AMC’s executive deputy to the commanding general, describes in his interview that AMC has provided more than $3.8 billion in cost avoidance in the past three years simply through value engineering. Similarly, the command is heavily invested in Lean Six Sigma and is turning those process advantages into dollar savings across the command. Jeffrey D. McKaughan Editor-IN-CHIEF Military Logistics Forum is proud to help celebrate 50 years of this great command.

Be sure to pull out the historical timeline poster commemorating the 50 years of the Army Materiel Command found on page 11. From stand up to the present, the poster highlights the important mile markers along their history that have brought them to where they are today.

Turning the page after the poster, you will find a page dedicated to previous AMC commanders, a headshot and their command years at AMC. Of the more recent, after serving their country, many have gone into the civilian world and have once again become leaders in their field.

The Who’s Who pictorial in the center of this issue also illustrates something else in AMC’s history—that it is always changing. As we go to press, the command is preparing to say farewell to General Ann Dunwoody and to welcome Lieutenant General (P) Dennis Via as the new commander, from his previous position as deputy commanding general. Also scheduled is the arrival of Major General (P) Patricia McQuistion from Army Sustainment Command to become the new deputy commanding general at AMC. The challenges that face the new commanders are many, as the country is still engaged with a great number of equipment needs during a time where budgetary restraint is mandated and the cry for efficiency is greater than ever. AMC was already on the path to meet those challenges head-on, and the new leadership has the pedigree and background to lead the command in meeting all of its mission requirements—most important of all, to fully equip the warfighter.

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LOG OPS

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New DLA Supply Chain Defense Logistics Agency Director Navy Vice Admiral Mark Harnitchek has approved the establishment of a fifth supply chain, industrial hardware, for DLA Troop Support.

The new supply chain now joins the organization’s other four: subsistence, clothing and textiles, construction and equipment, and medical. This brings the DLA-wide total to nine supply chains.

“A separate supply chain is the optimal integration strategy for DLA Troop Support due to the diversity of business models, products, customers and industry partners,” Harnitchek said. “Furthermore, it will support my strategic guidance by providing world-class support for our nation’s warfighters, focusing on performance outcomes, achieving efficiency and effectiveness, and streamlining support.”

The industrial hardware will support a supplier base of more than 850,000 items.

Industrial hardware will manage items such as screws, bolts, nuts, washers, pins, gaskets, O-rings and other items typically referred to as benchstock. Many of these items are essential in repairing aircraft including F-18s and Black Hawk helicopters and land vehicles to include HMMWVs used in missions around the globe.

The supply chain is the supplier support for DLA Aviation in Richmond, Va., and DLA Land and Maritime in Columbus, Ohio.

DLA Troop Support Commander Navy Rear Admiral David Baucom said he is pleased with the announcement and what it means for the organization.

“We have all known that establishing industrial hardware as its own supply chain was the right thing to do,” Baucom said. “It’s best for our industrial hardware team, whose items and operations are unlike anything else in DLA Troop Support.”

Baucom added that the prime beneficiaries of this decision are the men and women in uniform and the American citizens.

“Most importantly, standing up industrial hardware as its own supply chain is best for providing world-class support for our nation’s warfighters and for America’s taxpayers, enabling sharper focus on performance outcomes, increasing efficiency and effectiveness, and streamlining support— getting the most value out of every dollar we spend,” Baucom said.

Army Colonel Eugenia Snead, who Baucom appointed to lead the establishment of the new supply chain, said she is happy this “labor of love” has finally come to fruition.

“It has been a long journey to get to this point, but I am very happy that we are here, and I look forward to industrial hardware

Aircraft Maintenance Support The Air Force has awarded DynCorp International (DI) a task order under the Contract Field Teams (CFT) contract to provide aircraft maintenance support at Robins Air Force Base, Ga. “We are proud to support the U.S. Air Force and are pleased to expand our Contract Field Team work in one of the largest CFT programs,” said Jim Myles, group vice president, aviation, DynCorp International. “The DI team has been an integral part of the CFT program since its inception and we’re proud to deepen those ties with this new program.”

DI team members will provide depot maintenance operational support on USAF aircraft such as the C-130, C-17, C-5 and F-15. The competitively-awarded, indefinite delivery/ indefinite quantity contract has one base year with one, one-year option and a total contract value of $92.6 million if the one-year option is exercised.

being a great asset to DLA Troop Support,” she said.

By Janeen Poulson, public affairs specialist in the DLA Troop Support public affairs office.

Lighter, More Fuel-efficient Generator U.S. Army engineers were recognized for their collaborative efforts with small business to develop a transportable 100 kW generator that is 3,150 pounds lighter than those currently in theater.

Members of the Research, Development & Engineering Command’s CommunicationsElectronics Research, Development and Engineering Center, or CERDEC, received an Army Small Business Innovation Research, or SBIR, Phase II Achievement Award at the Women’s Memorial Center, Arlington National Cemetery, for their work with Spectrum Research Corporation of Albany, N.Y. The effort resulted in a generator light and compact enough to be towed by a HMMWV, yet sturdy enough to be transported off road. The towable 100 kW is a load-following, variablespeed generator set; this potentially allows for 4 | MLF 6.6

a 20 percent fuel reduction and mitigates wet stacking, which is a deposit buildup that clogs the exhaust system, resulting in serious damage to the generator.

“Our goal was to improve fuel efficiency, reduce the weight and size, improve power quality and reduce the number of generator sets used in the field,” said Edmund A. Nawrocki, leader for CERDEC CP&I’s Advanced Electromechanical Team. “This generator could support medical units, kitchens, command posts, base camps and disaster relief efforts. It’s plug-and-play, so it drastically reduces training time.”

“This effort is highly innovative on many levels,” Nawrocki said. “It features a hybrid electric architecture that reduces strain on the engine, an energy storage subsystem that provides uninterruptable power until the engine catches up, the

intelligent variable engine speed improves fuel conversion efficiency; and the electromechanical components will help extend mission times while reducing emissions. It will not only help reduce operational costs, but it will also translate to fewer soldier casualties associated with fuel runs.”

By Edric Thompson, RDECOM CERDEC Public Affairs. www.MLF-kmi.com

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LOG OPS

Compiled by KMI Media Group staff

One More C-5M

Condition-Based Maintenance Plus QinetiQ North America (QNA) recently announced it had been awarded a contract to deliver a condition-based maintenance plus (CBM+) pilot system supporting the U.S. Army TACOM Life Cycle Management Command in Warren, Mich. The three-year contract has an estimated value of $17 million.

In the CBM+ program, QNA will deliver analytical tools and an autonomic logistics system to collect and analyze operational data on 2,000 tactical wheeled vehicles worldwide. The data and tools will allow personnel responsible for logistics, operations and maintenance to provide more timely and accurate maintenance decisions and integrated logistics processes. QNA’s CBM processes, data collection and analysis procedures and tools are based on ISO 9001:2008,

CMMI Level III and Lean Six Sigma certifications.

Leveraging more than 19 years of successful performance on similar programs, QNA’s technical approach will give the Army an efficient, innovative and cost-effective CBM+ solution for the Tactical Wheeled Vehicle Pilot Program.

“Our extensive experience with the Army in field maintenance data collection is very important to successfully supporting TACOM’s CBM+ requirements under this new contract,” said David Shrum, executive vice president and general manager of QNA’s Engineering and Life Cycle Management business unit. “That experience and our detailed knowledge of the customer and their mission will allow us to provide the U.S. Army with a low-cost solution that maximizes efficiency.”

Lockheed Martin has inducted the second C-5B Galaxy from Travis Air Force Base, Calif., to become a C-5M Super Galaxy. Aircraft 87-0036 has been assigned to Travis Air Force Base since 1994, but will be delivered to Dover Air Force Base, Del., in 2013 after modernization.

This is the 13th aircraft to enter the Reliability Enhancement and Re-Engining Program production line. Throughout its career, this aircraft has supported the warfighter’s operations across the globe. The aircraft has accumulated nearly 22,000 flight hours and more than 4,500 full-stop landings.

PEOPLE Brigadier General Arnold W. Bunch Jr., commander, Air Force Security Assistance Center, Air Force Materiel Command, WrightPatterson Air Force Base, Ohio, has been assigned to commander, Air Force Flight Test Center, Air Force Materiel Command, Edwards Air Force Base, Calif.

Brigadier General James E. Haywood, director, strategic plans, programs and analyses, Headquarters Air Force Materiel Command, Wright-Patterson Air Force Base, Ohio, has been assigned to commander, Air Force Security Assistance Center, Air Force Materiel Command, Wright-Patterson Air Force Base, Ohio.

Brigadier General Stephen T. Denker,

6 | MLF 6.6

Compiled by KMI Media Group staff

commandant, Air Command and Staff College and vice commander, Spaatz Center for Officer Education, Air University, Air Education and Training Command, Maxwell Air Force Base, Ala., has been assigned to director, strategic plans, programs and analyses, Headquarters Air Force Materiel Command, Wright-Patterson Air Force Base, Ohio.

Brigadier General Mark M. McLeod, director of logistics, Headquarters Pacific Air Forces, Joint Base Pearl Harbor-Hickam, Hawaii, has been assigned to director for logistics, engineer and security assistance, Headquarters U.S. Pacific Command, Camp H.M. Smith, Hawaii.

Kathy Cutler has been assigned as director, Defense

Logistics Agency Information Operations, Defense Logistics Agency, Fort Belvoir, Va. Cutler previously served as deputy commander, Defense Logistics Agency Aviation, Defense Logistics Agency, Fort Belvoir, Va. Captain David R. Pimpo, who has been selected for the rank of rear admiral (lower half), will be assigned as commander, Defense Logistics Agency-Land and Maritime, Columbus, Ohio.

Pimpo is currently serving as deputy commander for fleet logistics operations, Naval Supply Systems Command, Mechanicsburg, Pa. Rear Admiral (lower half) Thomas K. Shannon, who has been selected for the rank of rear admiral, will be assigned as commander, Military Sealift

Command, Washington, D.C. Shannon is currently serving as commander, Carrier Strike Group One, San Diego, Calif.

Captain Donald L. Singleton, who has been selected for the rank of rear admiral (lower half), will be assigned as deputy chief of staff for logistics, fleet supply, and ordnance, N4, U.S. Pacific Fleet, Pearl Harbor, Hawaii. Singleton is currently serving as vice commander, Naval Supply Systems Command, Mechanicsburg, Pa. Rear Admiral (lower half) Charles K. Carodine will be assigned as reserve assistant deputy chief of naval operations for fleet readiness and logistics, N4R, Office of the Chief of Naval Operations, Washington, D.C.

Carodine is currently serving as deputy commander, Naval Warfare Development Command, Norfolk, Va. Rear Admiral (lower half) Brian Laroche will be assigned as reserve deputy commander, Navy Surface Force Atlantic, Norfolk, Va. Laroche is currently serving as deputy commander, Military Sealift Command, Washington, D.C. Captain Douglas G. Morton, who has been selected for the rank of rear admiral (lower half), will be assigned as commander, Naval Facilities Engineering Command Atlantic, Norfolk, Va. Morton is currently serving as chief of staff to the commander, Naval Facilities Engineering Command, Washington, D.C.

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Managing Making sure the warfighter is locked and loaded.

Few items that a warfighter takes to the fight are as important at the time when it’s needed as ammunition.

You can be a little hungry, a little thirsty or a little tired, but when it comes time to pull the trigger, you had better not be a little out of ammo. Such is the mission of the Joint Munitions Command [JMC] and the Joint Munitions and Lethality Lifecycle Management Command [LCMC]—to make sure that doesn’t happen and to make sure that the ammunition is the best available, properly stored and handled, and is where it needs to be when it needs to be there.

Before he transitioned as the commander to his new assignment as deputy chief of staff, G3 at Army Materiel Command, Military Logistics Forum had the chance to sit down with thenBrigadier General (P) Gustave F. Perna and talk about the role of JMC and the JM&L LCMC. Q: General Perna, you are the commanding general of both the Joint Munitions Command and the Joint Munitions and Lethality Lifecycle Management Command. What is the JM&L LCMC mission?

A: As with the other three life cycle management commands, the JM&L LCMC integrates the work of the research and development, acquisition and sustainment organizations for a particular commodity. Our commodity is Class V, conventional ammunition.

The research and development is performed by the Armament Research, Development and Engineering Center at Picatinny, N.J., which is part of Research, Development and Engineering Command. The Program Executive Office, Ammunition, does the acquisition piece and reports to ASA(ALT), which is true of all PEOs. And Joint Munitions Command executes logistics and sustainment as a major subordinate command of Army Materiel Command.

The three organizations collaborate to provide the Army the world’s best conventional ammunition. JM&L is more of a team than a command; before there were LCMCs, we had an arrangement that we called the Ammunition Enterprise.

8 | MLF 6.6

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the Ammunition Enterprise That is probably more accurate, rather than command.

Q: Can you elaborate more about JMC’s mission?

A: Joint Munitions Command produces, stores, distributes and demilitarizes conventional [not nuclear or chemical] ammunition and missiles for all military services, other government agencies and allied nations.

Our installations load, assemble and pack about 25 percent of all conventional ammunition, with defense contractors making the rest. Also, several key components that go into munitions end items—such as explosives and propellants—are made at JMC installations. The production is important, but it is not our primary mission, which is storage, distribution and demil—because no one else can do that for DoD. Q: What is JMCs current footprint [infrastructure] to execute mission?

A: JMC has 14 installations. [There are] eight store munitions, and nine are involved in manufacturing. The numbers do not add up because some do both.

Five installations—Blue Grass Army Depot, Ky.; Crane Army Ammunition Activity, Ind.; Letterkenny Munitions Center, Pa.; McAlester Army Ammunition Plant, Okla.; and Tooele Army Depot, Utah—serve as the main distribution hubs supporting one of five regions. They guarantee that training ammunition meets the required delivery dates to the 85 ammunition supply points in CONUS. They also ship ammo and missiles to the AMC terminals on the coasts in support of global operations. Three other facilities—Anniston Munitions Center, Ala.; Hawthorne Army Depot, Nev.; and Pine Bluff Arsenal, Ark.—provide needed war reserve storage and enhance the demilitarization capability of the five regional centers.

A primary factor for our distribution network is the contingency outload requirement. We have worked to size the network so that there are enough trained and skilled personnel to accomplish the mission in support of any contingency operation.

JMC also manages the Army’s eight ammunition production facilities. Crane, www.MLF-kmi.com

Let me explain. The most effective way McAlester and Pine Bluff have dual misto store ammunition is at unit location, sions—storage/distribution and production. but that is not very efficient. The most The other production facilities are Holston efficient storage capability is at one masArmy Ammunition Plant, Tenn.; Iowa AAP, sive site, but that drives up our distribuIowa; Lake City AAP, Mo.; Milan AAP, Tenn.; tion costs. ILS led us to the solution of Radford AAP, Va.; and Scranton AAP, Pa. having five regional distribution centers Those, along with Hawthorne Army Depot, with three additional sites for war reserve Nev., are owned by the Army, but operstorage, which provides ated by commercial firms on both efficiencies and effeclong-term contracts that we tiveness—best product and periodically recompete. logistics at the best value.

Our footprint is enorNow we are growing into mous. We have more than an improved version of ILS, 11,000 ammunition storcalled Enterprise Integrated age structures and nearly Logistics Strategy [E-ILS], 400,000 acres of land because which accounts for all miswe need a buffer zone around sions at our installations in all the ammunition to ensure determining the most effipublic safety. Our facilities Maj. Gen. Gustave F. Perna cient and effective ways to date back to the 1930s and execute daily requirements, early 1940s. while ensuring that we are ready for any contingency.

Q: What is the strength of JMC? I want to mention that we are highly effective today. We already ensure that 99.7 A: The workforce is our strength. JMC has percent of all training ammunition arrives approximately 6,500 Army civilians and at the right place at the right time. This a like number of contractors. No other number goes up to 100 percent on-time organization has the ammunition logistics delivery for predeployment training and expertise that resides in JMC. They are true for in-theater operations. I can assure our patriots, selflessly serving their country customers that they will never need to canevery day, providing the joint warfighter cel training due to a lack of ammunition with the right ammunition on time, every when and where it is needed. But we do time! believe strongly that there is always room for improvement, and this is why we are Q: What systems do you have in place to implementing E-ILS; better is better! accomplish the mission?

We also use a process called Centralized Ammunition Management [CAM].

A: We use the Logistics Modernization ProSimply put, we know exactly how much gram [LMP] like the rest of AMC. LMP was ammunition is in each ammunition supnot designed for Class V, which has shelf-life ply point [ASP] in CONUS, so we are able and hazmat issues that are not common in to push ammunition to meet training Class IX, so we have struggled at times in requirements. In the past, we knew how implementation, but we are growing daily much we shipped, but not how much in our capabilities because of LMP. We are was turned back in after gunnery, so that also moving into GFEBS [the General Fund installations accumulated excess inventory Enterprise Business System] and the other over time. With CAM, we enable the ASPs parts of the Army architecture, which will to operate more efficiently, rather than also enhance our capabilities. have a unit order something that is already For planning, we are using the Intein stock at that installation. grated Logistics Strategy [ILS] to determine how to store and distribute the ammunition Q: What are some ways to improve mission in the most efficient and effective way while efficiency while maintaining effectiveness simultaneously maintaining our continin support of the joint warfighter? gency outload capability.

MLF 6.6 | 9

A: Six organizations have a piece of munitions demil, which frustrates me as a taxpayer and as commander responsible for logistics of all conventional ammunition. Demil is critical to stockpile management. If we do not demil obsolete and unsafe munitions, they take up valuable storage space and reduce our outload efficiency. And I have to ask someone to inventory it, and be accountable for it and guard it.

Continuing to store unneeded ammunition creates potential safety, security and environmental concerns. Today, 32 percent of the ammunition in our stockpile sits in the demil account waiting for funds to destroy it. The problem is funding. For one thing, our customers do not pay for storage. That is free to them as part of the 1977 transfer of responsibility to the Army. So there is not much incentive for the Navy, Air Force or Marines to change the way they keep ammunition on record. But even the Army, which has a goal of reducing the demil stockpile by 6 percent annually, has not put enough funding into this area. To summarize, reducing demil stocks allows us to reduce our overall footprint, which leads to efficiencies with storage, surveillance and distribution—but we need to invest in demil to do so.

A second area where efficiencies are possible is with modernizing facilities. As I mentioned earlier, our infrastructure is from the World War II era. That aging capability requires a consistent stream of funding to maintain its readiness. For some things, we can depend on the marketplace, although that is not always efficient; however, when it comes to storage and distribution, there is only one source—JMC. You cannot find a single commercial firm with a 20,000-acre facility and 1,000 ammunition storage igloos, which can replace even one of our smaller JMC storage and distribution facilities. Our facilities have roads and rail systems, hundreds of buildings, sewage and water systems, electric and steam grids—all the infrastructure of a modern industrial park. Just like a commercial industrial park, our facilities and equipment require modernization. Investments in modernization ensure efficiencies because it provides safer environment, better production quality and rates, and better work areas, which promotes good workforce morale—all ensuring our output equals the best product, the best logistics and the best value.

Q: What keeps you up at night?

10 | MLF 6.6

A: Several things. First, is that I have not done a good enough job informing decision-makers that 90 percent of all that we are doing today, we will still be required to do after the war ends. Therefore, they think, “Well, the war is over, so we can cut the ammunition budget.” Of course, this type of thought is misguided. Our training doctrine and our war reserve requirements determine how much ammunition we need. We need to produce and store the right amount of ammunition—“right amount” is important; producing or storing too much causes a different set of problems, but is also a real challenge.

The second thing that keeps me up at night is a concern that we will decide to reduce the war reserve stockage while simultaneously reducing production requirements.

A similar decision was made in 1991 following the Gulf War. The result was that in 2002 most ammunition families were black [that is the category below red]. Saving money by using war reserve ammunition for training and not replenishing it may seriously impact our industrial base capability, both organic and commercial, and our capacity to go to war. We must achieve a balance between what we have in the war reserve stocks and what we produce. It is important that we maintain a steady flow of production in order to preserve our industrial base capability. We must keep qualified workers employed and ensure we modernize our equipment and facilities.

Our future success is directly linked to our management of the organic and commercial industrial base. We must look outside of the soda straw in order to make the right decisions for the future.

Third, as I mentioned, I am concerned about the infrastructure. We need about $200 million annually to modernize our GOCO [government-owned, contractor-operated] production facilities. For the time being this money is available and is being used to ensure the right modernization projects are being executed. It is the military construction funding for our GOGO [government-owned, government-operated] facilities that is not reliable. We need a steady annual stream of $80 million for those facilities; our projects are not selected, thus no funding. I want to emphasize again that these installations serve a joint service function, so the issue may require a joint solution.

Q: What do you think the impact of future budget constraints will have on your ammunition mission?

A: At this time, I do not want to speculate on the impact. Many smart people are engaged in making sure we gets the funds necessary to meet all mission requirements—no soldier, sailor, Marine or airmen will go without ammunition on the battlefield. What we need to do is to continue the work we are doing to achieve greater efficiencies in our operations.

We need to think beyond status quo and find solutions that ensure we can provide the joint warfighter with the best product and logistics and the best value. I am not talking about a Lean Six Sigma project; I am talking about make bold innovative changes to the current operating system. We must reduce excess capacity; focus on our core competencies of production, storage, distribution and demil; eliminate unnecessary work which increases indirect costs; and we must ensure that the workforce is sized to execute our mission—100 percent of the workforce doing 100 percent of the work—no less and no more.

Finally, I think we must explore possibilities for developing and executing a joint munitions production and logistics solution.

JMC’s workload is about half for the Army and half for the other services, so we have jointness not just in our name, but also in our DNA. Q: What do you see as the future of ammunition management?

A: The Defense Business Board recommended that DoD move to a single defense logistics organization. I believe Class V is an area where we can implement their vision.

I see a single DoD entity, recognized as the leader for all aspects of conventional ammunition, that operates from a revolving fund. I see that organization responsible for all aspects of the ammunition life cycle after Milestone C. While I do not believe all munitions research and development needs are joint, once the munitions are fielded and it is time to store, distribute and eventually demil the ammunition, then I see the day when a single organization is in charge for all conventional ammunition production and logistics. I clearly see this type of organization as significantly greater in efficiency and effectiveness—is this not what we want or need? 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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U.S. Army Materiel Command

th

Anniversary

50 Years of Leadership

General Frank S. Besson Jr. 1 Aug.1962 - 9 March 1969

General Ferdinand J. Chesarek 10 March 1969 - 31 Oct. 1970

General Henry A. Miley Jr. 1 Nov. 1970 - 5 Feb.1975

General John R. Deane Jr. 12 Feb. 1975 - 31 Jan. 1977

Lieutenant General George Sammet Jr. 1 Feb. 1977 - 17 May 1977

General John R. Guthrie 18 May 1977 - 30 Aug. 1981

General Donald R. Keith 31 Aug. 1981 - 28 June 1984

General Richard H. Thompson 29 June 1984 - 13 April 1987

General Louis C. Wagner Jr. 14 April 1987 - 26 Sept. 1989

General William G. T. Tuttle Jr. 26 Sept. 1989 - 31 Jan. 1992

General Jimmy D. Ross 1 Feb. 1992 - 11 Feb. 1994

General Leon E. Salomon 11 Feb. 1994 - 27 March 1996

General Johnnie E. Wilson 27 March 1996 - 26 April 1999

General John G. Coburn 14 May 1999 - 30 Oct. 2001

General Paul J. Kern 30 Oct. 2001 - 5 Nov. 2004

General Benjamin S. Griffin 5 Nov. 2004 - 14 Nov. 2008

General Ann E. Dunwoody 14 Nov. 2008 - 7 Aug. 2012

General Dennis L. Via 7 August, 2012

Providing the Decisive Edge For

Years

Only a holistic view of the entire supply chain will yield solutions for the future.

By Peter Buxbaum MLF Correspondent

During the 1990s, the Department of Defense studied how it could depart from older concepts of stockpiling supplies and emulate private industry concepts of lean inventory management. This involved wrestling with the problem of how to supply quickmoving, forward-deployed forces characteristic of modern warfare.

The answer in many cases has been for the U.S. military to adopt

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industry’s approach of taking an endto-end view of the supply chain. DoD has, in partnership with industry contractors, applied best practices and cutting edge technologies to deliver material from the factory to the foxhole more effectively and at lower cost than before.

“Some people talk about supply chain management in terms of planning to bring material in house,” said Jane

Malin, account manager for Defense and Army at SRA International. “They are focusing on the acquisitions side and they think that is where their focus should stop. We think that is half the job. You have to get products to the customer or else you’re not doing your job.” SRA provides logistics and other training, technology and operational support to U.S. military and private industry customers.

MLF 6.6 | 13

“Taking an end-to-end approach means getting a holistic view of the supply chain,” Malin added. “We’re talking about reaching out as far as we can to suppliers and their suppliers, through the entity we are working with and then out to the opposite end-to-end customers.”

“What DoD faces is a multi-party, multiechelon problem,” said Gary Bradt, public sector vice president for One Network Enterprises. “They have a lot of silos that can’t communicate with each other. You can’t derive value or achieve rapid responses with all these disparate systems and processes.”

One Network provides a real-time network that connects the various segments of a supply chain. “We set out to build responsiveness into the supply chain network by eliminating lead time and continually syncing and re-syncing supply, demand and capacity across all trading partners,” said Bradt.

“This way, the supply chain can be managed by exception. Achieving total asset visibility, Combat logistics advisers with the Regional Logistics Center, Regional Support Command Southwest, tally up their count of ammunition at the Afghan National Police provincial supply point. The combat advisers helped the ANP inventory the ammunition regardless of what systems are running across stocks. [Photo courtesy of the DoD] the enterprise, helps provide the highest posframework for the development of consistent capabilities to shape purchasing decisions. sible service level at the lowest possible cost.” performance metrics.

In the military, this is huge.”

“In a military supply chain, you might SCOR divides supply chains into five “The more you know about your suphave small businesses making components major process categories: plan, source, make, plier’s issues and capabilities, the more you of a weapons systems and selling them to a deliver and return, and examines these procan understand what your order does to that larger manufacturer,” said Malin. “All this cesses in four hierarchical levels. Level 1 supplier and how quickly the supplier can goes through a product manager who is is concerned with the strategic or entermove products to your organiacquiring goods and services prise view. Level 2 breaks this down into zation,” said Malin. “The betfor the ultimate customer in SCOR’s major process categories. Level 3 ter you know your customer’s the field: the warfighter who is further breaks this into process segments needs and requirements, the going to use the system.” such as inventory handling, shipping, transbetter you can support that For Malin, fostering colportation and theater distribution. Level customer. In defense supply laboration is the number one 4 describes individual activities, such as chains, the primary customer best practice for end-to-end picking and packing, building and consoliis the warfighter.” supply chain management. dating loads, selecting carriers, delivery to Another best practice is “You have to knock down the ports, and so on until customer receipt. to follow the Supply Chain walls between supply chain “Applying certain technologies is also considOperations Reference model, stakeholders,” she explained. ered a best practice,” said Malin. “Integration or SCOR, a methodology “That means systems integraJane Malin of systems and development of portals help developed in the private section, sharing data, and creatfoster collaboration and dissemination of tor. “SCOR is used to simplify and optimize ing visibility and transparency throughout information.” processes and to create uniform performance the supply chain. You want to see where the The U.S. Marine Corps applied One Netmetrics and risk analyses across the supply supply chain bottlenecks are so that you can work’s technology to the Marines’ Ammunichain,” said Malin. “It doesn’t matter if it is best get around them. That way, you’re not tion Automated Information Systems. “The a commercial supply chain or a defense or purchasing things you don’t need, and you Marine Corps doesn’t hold its own invenother government supply chain. The same don’t have to carry extra contingency inventories,” said Bradt. “It is mostly the Army best practices and improvements and optimitories.” and the Navy that hold the inventories for zations are translatable across industries and “You have to tie things together and the Corps. The Marines came to us and said agencies.” get rid of silos,” agreed Bradt. “When you they need to achieve total asset visibility for SCOR is essentially a model for describdo that, you get actionability. When you ammunition worldwide. They had old sysing a supply chain, allowing consistent manhave things that are not in sync with each tems from the 1970s that wanted to sunset.” agement across each piece of a supply chain. other, long-term planning is not connected In order to gain visibility to their supply One part of the SCOR model provides a to short-term planning, and planning is chain, the Marine Corps had integrate its sysstandard nomenclature in order to align disconnected from execution. When they tem with those of the Army, Navy and others. improvement projects. SCOR also provides a are connected, you can align supply chain 14 | MLF 6.6

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The U.S. Marine Corps had unique requirements, a short implementation schedule, and could not initially replace their existing legacy systems. They also required an extensible platform that would rapidly modernize existing capabilities while providing for the future in terms of business transformation opportunities and supply chain capabilities.

The U.S. Marine Corps selected One Network to rapidly integrate their suite of solutions with the Navy and Army legacy systems.

“This was an important factor given the magnitude and complexity involved in the legacy system modernization of the Marine Corps global ammunition inventory management system,” said Bradt.

One Network delivered the main part of the system within five months of contract award. “We took another six months after that to take care of any remaining functionality issues,” said Bradt.

The system supports 124 sites with over $6.4 billion inventory, and provides global inventory visibility into worldwide asset postures across all principal inventory items.

“Often within the defense sector, when business processes are re-engineered, it can take months or years, costs can become exorbitant, and users can get disillusioned,” said Bradt. “One Network’s implementation was radically different. The brevity of the project timeline underscores the flexibility of One Network’s solutions because they were easily adapted to meet the U.S. Marine Corps’ specific functional and integration requirements.”

The One Network system provides the Marine Corps with a number of features. “We do network coordination and connectivity,” said Bradt. “We have a single pipe into the network to provide integration across multiple entities.”

One Network can be installed on top of existing systems and those systems can be the system of record. The system can also provide additional functionality that may not be present in existing systems.

In the case of the Marine Corps implementation, One Network connected the Marine Corps legacy system with those of the Army and Navy. Eventually, the Marines asked

One Network to replace its legacy system.

One Network provided the Marines solutions that included inventory management, requisition management, lot tracking, serialized item tracking, master data management, inventory planning and in-transit tracking.

“These solutions helped the U.S. Marine Corps achieve total asset visibility and provide end-to-end order management from procurement to the warfighter,” said Bradt.

One Network also helped the U.S. Marine Corps reduce total system cost of deployment, maintenance and support, improve service levels to 124 supported activities, and improve customer satisfaction with over 99 percent system uptime. It reduced the transaction error rate from over 60 percent in the legacy system to the low single digits with the new system.

“One Network Enterprises has successfully helped the U.S. Marine Corps accelerate the migration of its applications and data to a modern network-centric environment that will support rapid development of future capabilities and accelerated business transformation,” said Bradt.

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The Navy Department was so impressed by the One Network implementation that it awarded the Marine Corps the Department of the Navy Information Management IT Excellence Award. The award recognizes superior quality of information technology projects, teams and individuals helping to transform the Navy and the U.S. Marine Corps through information technology.

SRA International also won an award for its work on a military supply chain. SRA won the Supply Chain Council’s Operational Excellence Award along with its client, U.S. Army CECOM Life Cycle Management Command. They received the award for the endto-end supply chain management of assets being returned from Iraq designated for repair or disposition.

The project dates back to 2008. “SRA and CECOM won the award for demonstrating excellence in the design, operation and improvement of CECOM’s complex supply chains,” said Malin. “The team set itself apart by utilizing commercial best practices, applying the SCOR model, and converging it with Lean Six Sigma tools to significantly

enhance CECOM’s reliability, flexibility and responsiveness.”

SRA also applied technology to the project to gain visibility to the location and status of assets. “We gained a better handle on what assets were in the supply chain,” said Malin.

“We were able to improve the efficiency and transparency of that supply chain of those assets coming into the Tobyhanna Army Depot in Pennsylvania.”

Current technologies that promote visibility include mobile devices and radio frequency identification (RFID) technologies, according to Malin. Cloud computing is also a growing area.

“The use of mobile devices improves visibility because you can gain information from the field so you can know exactly what warfighters need,” she said. “RFID data can be fed to various kinds of systems so that stakeholders across the supply chain can have access to that data. Different entities running different systems can ascertain the location and condition of assets.”

Bradt noted that One Network’s realtime system is cloud based. “Why cloud?”

he said. “You get quicker time to value with cloud computing. It promotes collaboration, encourages continuous improvement and decreases complexity. The cloud-based architecture with service-oriented architecture capabilities enabled One Network to provide rapid development and configuration to the Marine Corps in a fraction of the time and at a fraction of the cost of more traditional systems.”

On One Network’s system, all the stakeholders have common processes and data models, Bradt noted. “On top of that they can have business intelligence, analytics processes, and evaluation so that they can achieve continuous and incremental planning integrated with execution,” he said.

“Supply chain segments can work together to re-plan on the fly so if the battlefield changes, they can move quickly and adapt to the changing conditions.” 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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MLF 6.6 | 17

SUPPLY CHAIN Next Generation of Trailer-mounted Water Containers

Camel II, primed by Choctaw Defense with WEW of Germany as a major partner, has now reached TARDEC’s Aberdeen Proving Ground facility for extensive testing.

Camel II is an upgrade to the M107, M149 and M1112 series 400-gallon water trailers (Water Buffalo) that have been in service for many years. Camel II is the result of over three years’ conceptual and prototype development, and an initial contract for more than 300 units was agreed between TACOM and Choctaw Defense of Oklahoma in July 2011.

Camel II represents a considerable capability upgrade from the Army’s

existing systems, including a doubling of the unit payload and the coupling of complementary systems, such as pumping, chlorination and preservation in any climatic conditions. While the Camel II unit itself is demountable, the tank unit will be dedicated to service with the M-1095 MTV trailer, which will also house the ancillary services.

The prime contractor for Camel II, Choctaw Defense, is a business unit of the Choctaw Nation of Oklahoma and has over 25 years of experience in engineering and manufacturing military ground support systems.

MRAP Support ManTech International Corp. has won a $2.85 billion contract from the U.S. Army to continue logistics support for the Army’s mine resistant ambush protected vehicles. The company said it won the five-year contract from TACOM Contracting Center for the MRAP support program, which the company has participated in since 2003.

“As one of the very first contractors on the battlefield, we have built a strong working relationship with the U.S. Army over many years,” said ManTech Chairman and CEO George J. Pedersen.

“This relationship is an essential part of who we are at ManTech, and winning this contract is a statement about the quality and professionalism of our people.”

Under this contract, ManTech will continue to provide services to rapidly assess and repair battledamaged MRAP family of vehicles systems and mechanical failures, insert technology, integrate systems, and perform upgrades and modifications to enhance and sustain fleet operational readiness.

The company will also continue to manage supply and transportation support for route-clearance vehicle fleet, including demand analysis, warehouse operations, logistics data reporting, and material management to ensure optimum distribution of parts at all repair locations.

“MRAP vehicles provide significant protection for our servicemen and women, so it is imperative we maintain them at a high operational readiness level,” said Louis M. Addeo, president and chief operating officer of ManTech’s Technical Services Group.

A Better Engine Oil—From Down Under Every year more than 38 billion liters of oil are used worldwide, equaling more than 240 million barrels.

Valvoline has developed the technology to produce re-refined engine oil that meets Valvoline’s stringent performance criteria and delivers exactly the same protection and performance as Valvoline’s other lubricants, but at a much lower environmental impact.

“In the past, attempts to re-use engine oil were less than successful because the technology to re-refine the oil to acceptable standards was not available,” explained Ed Kopinksi, technical director at Valvoline Australia.

“A commonly misunderstood fact is that engine oils do not wear out. The oil becomes dirty and the additives get depleted, but the oil is still an effective lubricant.” he continued.

18 | MLF 6.6

“Used engine oil can now be collected, filtered, de-watered, re-refined and re-hydrogenated. The end result is a base oil that has the same performance characteristics as base oil derived from crude oil.”

Contaminants and broken down additives eventually reduce the lubrication of oil, but these add up to only 15 percent of the total lubricant being affected by engine operations. The remaining 85 percent is regular re-usable base oil.

Using 50 percent re-refined base stock and advanced additive chemistry, Valvoline NextGen meets or exceeds industry standards including API (American Petroleum Institute) and ACEA (Association des Constructeurs Europeens d’automobiles) standards, and has been approved by major engine manufacturers, delivering on performance that rivals any refined crude oil products.

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SUPPLY CHAIN Managing Base Closures in Afghanistan

Compiled by KMI Media Group staff

Computers Keeping Their Cool Impact Cases has designed, engineered, manufactured and drop tested a transportable air and watertight aluminum 19-inch rackmount chiller case system to cool military battlefield computers.

The chiller case unit travels in its own dedicated welded aluminum single lid case along with the main welded aluminum rackmount case, which houses the mission critical battlefield computers that need cooling.

On the battlefield, the single lid aluminum shipping case is opened, the cooling unit lifted out and placed on top of the rackmount case. Within minutes, the cooled computer system is ready to receive and send critical battlefield information.

The main function of Impact Cases military chiller case system is to ensure that the instruments housed within the rackmount case arrive at the intended location suffering no physical damage. The chiller unit purpose is to ensure that the computers do not overheat when in use.

King of All Hoists

Serco Inc., a provider of professional, technology and management services to the federal government, has been awarded a contract to support the United States Forces Afghanistan base closure and transition initiative through the coordination of logistics and deconstruction of bases throughout Afghanistan. The new three-year contract has a one-year base period and two one-year options with a value of $57 million, if all options are exercised.

Serco will provide base closure assistance teams (BCATs) to manage multiple concurrent base closure tasks. BCATs are responsible for organizing, coordinating and assisting military units with the key aspects of redeployment associated with base closures and transfers. Serco expects to hire over 70 employees to support this contract at various locations throughout Afghanistan.

Serco has provided similar services to the United States Forces Iraq BCATs. The company assisted military and base commanders in the closure and return of U.S. Coalition Bases to the government of Iraq and to local landowners. Serco also contributed to the Army’s current Base Closure Smartbook, as well as the base closure lessons learned documents.

“This contract award demonstrates Serco’s commitment to supporting our military service members overseas,” said Ed Casey, chairman and chief executive officer at Serco. “We are honored to have been selected to provide these services to the U.S. Army. Our mission critical logistical support services provide our customer with structured and proven solutions.”

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Columbus McKinnon Corporation, a designer, manufacturer and marketer of material handling products, recently unveiled the high capacity Yale LodeKing electric wire rope hoist. With capacities from 15 to 60 tons, the new wire rope hoist combines durability with the higher capacities that today’s applications demand.

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Warfighter Supplier

Q& A

Providing the Warfighter with the Decisive Edge John B. Nerger Executive Deputy to the Commanding General U.S. Army Materiel Command Selected for the Senior Executive Service in July 2000, John B. Nerger became the Executive Deputy to the Commanding General, U.S. Army Materiel Command, in May 2011. As the command’s chief management officer, he is responsible for materiel life cycle management; acquisition support; personnel and resource management; industrial base operations; enterprise integration and provision of research and development; and science and technology. Army Materiel Command’s 70,000 personnel span the globe to give warfighters a decisive edge, with an annual appropriated and working capital fund budget over $40 billion.

Nerger has a B.A. from Northwestern University, Evanston, Ill., and a Master’s in public administration from the University of Virginia, Charlottesville, Va. From July 2008 to May 2011, he served as the executive director of the U.S. Army Installation Management Command, where he directed the multi-disciplinary management of facilities, programs, services and infrastructure for Army installations worldwide, overseeing a $13 billion annual budget, 85,000 employees, 15,000 million acres and 934 million square feet of facilities.

From October 2004 to July 2008, he was the Deputy Chief of Staff, G-1/4 (Personnel and Logistics) for U.S. Army Training and Doctrine Command at Fort Monroe, Va., an organization of 40,000 soldiers and 16,000 civilians at 16 locations. From July 2000 to October 2004, he was director of facilities, housing and environment on the Army staff responsible for a $3 billion global capital investment program.

His major awards and honors include: Presidential Rank Award Meritorious Executive; Decoration for Exceptional Civilian Service (3); Meritorious Civilian Service Award (3); Commander's Award for Civilian Service (3); Silver De Fleury Award; and Federal Energy and Water Management Award.

Q: On August 1, 2012, the Army Materiel Command [AMC] will celebrate its 50th anniversary. What does the military community need to know about AMC’s history and what can you tell us about the way ahead?

A: For 50 years, the AMC has provided the decisive edge to the warfighter. Today, we define the warfighter as not only Army soldiers, but also our joint partners in the Navy, Air Force, Marine Corps and Coast Guard, as well as our coalition partners and allies.

Throughout its history, AMC has continued to evolve, adapting to an ever-changing military environment. Over the past half a century we have been a technology leader, developing everything from rations to rifles, helmets to helicopters, bullets to missiles, and body armor.

In addition to producing ammunition, weapons and repair parts, our depots and arsenals repair, refurbish and overhaul every type of major www.MLF-kmi.com

weapon system in the Army inventory. We also have the critical mission of safely storing and disposing of the nation's stockpile of chemical weapons, and we manage billions of dollars in foreign military sales to our allies. As we look to our next 50 years, we will focus on shaping ourselves to be a globally networked logistics command—a key enabler for global materiel management.

Q: The retrograde from Iraq, by most opinion, went extraordinarily well. What is AMC doing to use those lessons learned to prepare for the retrograde from Afghanistan?

A: When Assistant Secretary of Defense for Logistics and Materiel Readiness Alan F. Estevez recently visited AMC, he called the retrograde of equipment from Iraq a “logistics miracle.” The difference in the retrograde and return of equipment from Iraq, and the decadesearlier return is significant. General Dunwoody talks about the “iron mountains” of the previous war—tons upon tons of equipment that sat unaccounted for and immobile. We didn’t have that in our recent operation, and we are certainly making efforts to avoid it as we start the drawdown from Afghanistan.

Clearly, there are a different set of challenges. Afghanistan is landlocked. It lacks the ports and access to Kuwait we had for operations out of Iraq. The current political situation limits our passage over most of the roads in Pakistan—something the Department of State and Department of Defense are still working to resolve. We know it won’t be easy, but we are prepared to make this work by leveraging our forward MLF 6.6 | 21

deployed Army Field Support Brigade, Responsible Reset Task Force, and subordinate commands with TRANSCOM’s and DLA’s capabilities, along with a host of reachback capabilities to optimize the process.

We’ve got millions of pieces of equipment that have to be moved; we won’t underestimate the effort it will require.

Q: Assistant Secretary of Defense for Logistics and Materiel Readiness Alan F. Estevez recently visited AMC. What were the focus areas of his visit? Were there any action items that AMC is working on as a result?

A: We’ve welcomed many senior visitors since we opened our new headquarters, and everyone leaves impressed. We showed Mr. Estevez the capabilities of our state-of-the-art global operations center, which gives AMC real-time information and visibility of Army equipment and unit readiness. He was also given a demonstration of the Decision Support Tool, and other tools that support AMC’s new role and Lead Materiel Integrator. He encouraged us to show those capabilities to the Joint Staff and the United States Marine Corps, who have similar requirements. He also spoke to AMCOM leadership, who briefed him on the Logistics Modernization Program and the efficiencies we are finding.

We were pleased to be able to get him down to Anniston Army Depot where he saw our new Small Arms Facility and several other aspects of our organic industrial base and our public-private partners there, which have been tremendously successful.

It’s important to us that senior level Army and DoD leaders, as well as our fellow four-star commands and combatant command commanders visit AMC. We want everyone to know what steps we are taking to provide unwavering support to the warfighter.

Q: The small arms repair facility has been open for some five months now. How would you characterize the work being done there and how it will ultimately benefit the warfighter?

A: Anniston’s Small Arms Rebuild Center is a great asset for AMC and the Army and especially to the warfighter. This facility overhauls weapons for all branches of the armed forces—the M2 and M240 series machine guns, M9 pistol, MK19 40MM machine gun, M16/M4 series rifle, M134 mini gun, grenade launchers and mortars—they are all overhauled there.

The new facility, which opened in January 2012, consolidated all of the small arms repair processes under one roof and replaced a 65-yearold converted warehouse. Our repair processes had been located in multiple buildings across the depot; in fact, there was a one-mile round trip from the main facility to the support shops, and a 5-mile trek to the range to test the weapons. The building’s design incorporated LEED and Lean principles, making it energy smart, and work efficient. The Rebuild Center really has tremendous features and allows us to focus on making those critical repairs and readjustments to the weapons systems. It includes areas for disassembly, repair, reassembly and testing.

There’s an indoor function fire, test, target and accuracy firing range.

It helps AMC provide only the safest and most reliable weapons to our warfighters.

Q: Where are AMC’s greatest opportunities to generate the kinds of efficiencies that are becoming necessary in the face of fiscal austerity?

A: We need to focus on how we can find efficiencies and work with what we have while continuing to provide the support our Army expects and deserves. Exactly how we will accomplish that remains to be seen.

22 | MLF 6.6

However, AMC’s Continuous Process Improvement programs provide a strong foundation for constant review of processes to assess efficiency and effectiveness.

There are abundant opportunities throughout AMC for gaining efficiencies from maintenance and manufacturing, research and development, green energy programs, and transactional or administrative activities. AMC continues to develop our culture as one that pursues, identifies and acts on these possibilities. AMC excels in the application of Lean and Lean Six Sigma methodologies with 21 certified LSS Master Black Belts across the command, $1.2 billion in cost savings and avoidance over the last three years, and increased quality and performance of the equipment placed in the hands of our warfighters. In addition, our Value Engineering program continues to look for innovative cost-saving measures for application across the life cycle of weapon systems.

Over the last three years, Value Engineering has provided $3.8 billion in cost savings and avoidance for AMC and supports ASA [ALT]’s better buying initiatives. The use of these continuous process improvement methodologies contributes to mission impact predictability for leaders making difficult decisions related to shrinking resources. AMC’s multiple task force teams, such as the Optimization Task Force and the Redstone Task Force are looking for efficiencies as defined by capability analysis and combining common services. These programs and our dedicated workforce are working towards a cost-conscious environment to ensure that our depots and arsenals cannot fail.

Our industrial base—those depots and arsenals, and the civilian counterparts to those facilities—are the heartbeat of our defense efforts. Their health determines Army readiness and supports the joint force to defend the nation’s interests.

Q: Virtually every time someone is asked what can be done to most benefit the warfighter, “lighten the load” is at the top of the list, especially when it comes to batteries and power sources. Do you think we are close to seeing any real change in the weight paradigm to where there will be a significant reduction in power-related weight? What are the technology issues that have not yet been solved?

A: AMC is collaborating continuously with TRADOC and ASA [ALT] to develop and refine lighter, more efficient equipment, and increase power for our warfighters, whether dismounted or mounted. We are developing and evaluating lightweight solar panels soldiers can use to recharge their batteries, reducing the number and types of batteries soldiers have to carry. We’ve already reduced the weight and extended the life of the batteries soldiers carry now, and they’re going to keep getting even lighter, with longer life cycles.

We have teams of engineers at many of AMC’s engineering centers and laboratories working hard to reduce the burden on soldiers, and on the entire logistics system. We’ve got to unburden soldiers, increase their mobility, reduce fatigue, reduce the time needed to recharge batteries, and reduce the number and types of batteries we have to supply to the soldier. It’s not just something we’d like to do; it’s something we have to do, and we are doing. Earlier this year, we opened the Ground Systems Power and Energy [GSPEL] Lab at RDECOM’s Tank & Automotive RD&E Center [TARDEC]. Its 8-labs-in-1 will provide the most advanced solutions possible to meet the next generation of power, energy and mobility needs.

We’ve got to lighten the load—both physically and logistically. We need to make use of today’s lighter materials and technology—seemingly small changes can achieve tremendous results. www.MLF-kmi.com

STRATEGY & ORGANIZATION

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TECHNOLOGY

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ENGINEERING & OPERATIONS

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A N A LY T I C S

Creating new

capabilities.

Sustaining

readiness.

Shaping the

future.

In today’s complex and global operational environment, the US Army must constantly prepare for its future. Leaders balance people, programs, and budgets to meet today’s demands and tomorrow’s requirements for full-spectrum maintenance, supply, and transportation operations. Booz Allen Hamilton is helping the Army logistics community create innovative strategies and solutions for overcoming emerging challenges and budget uncertainty. Our experienced people provide modern capabilities to solve complex problems the materiel enterprise faces. Whether you’re managing today’s issues or looking beyond the horizon, count on us to help you be ready for what’s next.

www.boozallen.com/defense Use of the Department of Defense image does not constitute or imply endorsement.

Q: Staying with power for a minute, what about larger facility power supplies, including micro grids and alternative energy sources that the Army is looking at?

Q: AMC ran a Bold Ideas campaign that ended in early 2012. What was the concept behind the campaign and do you think the results warrant having a Bold Ideas II campaign?

A: AMC’s serious interest in alternative energy sources comes from our focus on the deployed warfighter—from a sustainability perspective, we must reduce the need for fuel resupply by 25 percent, reduce the need for water resupply by 75 percent and decrease waste generation by 50 percent.

Our versatile team at RDECOM has been deeply involved in technology-enabled capability demonstrations since 2011—a three year effort encompassing technology development, demonstrations and operation evaluation. Stakeholders across the Army identified 24 science and technology challenges to address in the near term. Even though the Army’s equipping strategy is not yet fully developed, we are taking a methodical look at integrated waste, water and fuel management solutions for base camps ranging from small 50 to 150 person outposts manned and operated by small unit leaders, to 600-1,000 person systems with an established base infrastructure.

Closer to home, we’re generating our own energy at Tooele Army Depot using the Army’s first wind turbine. The first year it was in operation, it generated 1.5 megawatts of electricity, delivering $78,000 in annual savings. Our engineers at RDECOM are leading research on tactical micro grids that will deliver more efficient power to soldiers, independent of traditional grids and integrating multiple sources of energy for use and storage. They are looking at ways to harness the sun and wind to ease the burdens associated with the use and transportation of traditional fuels.

A: AMC launched the Bold Ideas Campaign to encourage our great employees to identify processes and programs that could potentially save money, and fundamentally change how AMC and the Army do business. Good ideas have no rank. Who better to ask than those who are at the heart of the work? We received more than 300 suggestions over three months. Nearly a dozen of those garnered real savings for AMC and the Army.

One particularly popular suggestion addressed reducing the amount of calendars AMC and its major subordinate commands populate in order to save time and money. We’ve encouraged our folks to continue the suggestion process by submitting their ideas to the Army Suggestion Program, where they will undergo a more comprehensive assessment to determine their impact Armywide. It’s no secret that we are entering austere times in the Army. We’ve got to look at ways to effect change, and soliciting for solutions from the people who work the issues, day in and day out, was a great solution for us.

We would be deceiving ourselves if we thought most good ideas come from higher headquarters. It also sends a message that AMC values everyone’s contributions, both big and small, to sustain a bold, adaptive and innovative workplace. While we haven’t decided yet on another campaign, bold ideas have no time limit, so we expect our employees to be bold, adaptive and innovative in all they do.

In addition, at General Dunwoody’s direction, a simplified process to capture, track and report efficiencies in theater was developed to encourage “Bold Ideas” from soldiers and civilians deployed in support of the war fight.

Q: In the right circumstances, public-private partnerships certainly have a place in the maintenance chain. How do you see these relationships maturing for the Army and do you see the number of arrangements going up down or remaining relatively the same?

A: Certainly, partnerships are a vital element in AMC maintenance and reset objectives; they are a key enabler to the sustainment of our organic industrial base capabilities. We must partner and work together with industry to provide our Army and the nation with the capability needed to support our National Security Strategy. Partnering benefits both the Army and the partnering industry agency. Our industry partners gain access to our organic industrial capabilities.

For instance, industry will have access to advanced-technology equipment, potential use of hard-to-receive hazardous waste permits, leverage long-term use agreements, decrease capital investment cost, leverage ISO-certified facilities and Lean Six Sigma programs as well as access to a diversified and skilled workforce and secure locations.

Our successful partnering at Anniston Army Depot is a key example. We have a mix of civilian employees and industry partners working side by side in the same facility, with access to the same equipment and using established work procedures and policies. We are able to accomplish more as a team when we use our public-private partnerships. There are a myriad of benefits to partnering with AMC, both for AMC and for the partner agency.

We are always looking for industry partners, and encourage those who are interested to access our website at www.amc.army.mil/amc/ partnershipopportunities.html or send an email to reds.partnerships@conus.army.mil to gain additional information on those critical relationships.

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Q: What are some of the primary initiatives to take care of your people from the perspective of physical and mental health?

A: Anything good you see coming out of AMC is a direct result of our talented and motivated workforce, so it’s important for leaders to create a proper climate for employees to work, contribute and feel valued.

A wellness program is one way to show our great employees we care about the whole person, not just what they do 9 to 5. Over a decade of conflict has increased our appreciation for the need for resiliency among our soldiers, hence the Army’s efforts to create its Comprehensive Soldier Fitness program. Our civilians have been doing heavy lifting to support our Army and there are signs of strain just like there are among our military colleagues. Creating opportunities to strengthen civilian resilience will have positive effects on morale and productivity.

Additionally, all of us have a responsibility to do what we can to address the national epidemic of obesity. At the headquarters, our G-1 Wellness team leads daily walks around the perimeter of the building, offers boot camp classes, seminars on stress reduction and various mental wellness initiatives. Our chaplain runs programs that support the spiritual dimension.

Because AMC is 97 percent civilian, you don’t always see a focus on fitness the way you do with soldiers. Though there’s no annual weigh-in or PT test to keep us honest about our weight and wellness, resiliency and wellness are significant aspects of a healthy life for our AMC employees. In the end, there’s no doubt a focus on wellness will save lives and improve the quality of our lives. O www.MLF-kmi.com

Industry and DoD collaboration delivers efficiencies to sustainment programs.

By Henry Canaday MLF Correspondent

26 | MLF 6.6

www.MLF-kmi.com

Managing the supply chain and integrating materials efficiently are critical to the economic sustainment of defense assets. These tasks are done somewhat differently in different platforms, with the government or industry playing varying roles, the Defense Logistics Agency (DLA) available where it is most efficient and formal performance based logistics (PBL) contracts used where suitable. But emphasis on close collaboration between government and industry, performance metrics and solid information systems is common throughout sustainment efforts.

F-35 Joint Strike Fighter The main sustainment challenge for the F-35 is affordability and finding a common solution for a multi-service, multi-nation program, according to Scott Ogden, director of business development, F-35 sustainment at Lockheed Martin. Each service will have to use a common solution, different from its current practice. Having a common integrator will promote efficiency and affordability, as it has already done for the F-22 Raptor, Ogden said.

Lockheed Martin is the product support integrator for the F-35, and DLA will serve as one supplier, based on best value. Organic government depots will build sustainment capacity necessary for Title X requirements. “We have already begun weapons depot stand-up and started planning earlier for the F-35 than any other weapons system,” Ogden noted.

The F-35 sustainment strategy was designed to use the PBL approach. Total asset visibility will be provided by the F-35 Autonomic Logistics Information System (ALIS), reducing turn-time for repairs. “This system will also reduce the number of spares on hand, cutting total cost over program life,” Ogden said. Lockheed Martin is working with all services to establish critical interface between ALIS and some legacy IT systems.

Standard metrics used by services will be used for the F-35, including turnaround time on repairs and repair rates. The F-35 program constantly works to enhance the supply chain. “With the F-35, we have already seen a 40 percent reduction in cost of spare parts by using joint warehousing and commonality of parts across the three F-35 variants,” Ogden said.

CV/MV-22 Osprey Don Schmitt, director of logistics at the joint program office (JPO) for the V-22, said the main sustainment challenges result from the aircraft’s versatility and capability. “The V-22 can self-deploy, deploy aboard ship and deploy or employ with a Marine air ground task force. Its speed and extensive range far exceeds that of traditional rotorcraft. The V-22 supply chain must be robust, flexible and incorporate numerous different packages to support various deployment scenarios. Responsive reverse logistics capability and fast repair turnaround time at both intermediate and depot repair sites are critical.”

The V-22 supply chain exploits DoD’s logistics infrastructure but also uses PBL contracts whenever possible. “PBL contracts incentivize logistics performance, in many instances in partnership with defense repair depots,” Schmitt explained. “By using PBL, specific logistic performance metrics can be contracted that are tailored to support the V-22 supply chain.”

V-22 sustainment mostly uses existing defense logistics information systems at present.

In maintenance, the V-22 uses Comprehensive Automated Maintenance EnvironmentOptimized (CAMEO), designed from the ground up to improve aircraft readiness and reduce sustainment costs for warfighters.

Schmitt said the V-22 supply chain has performed very well in aggregate, but there are areas that need improvement. As evidence of solid overall performance, he cited numerous V-22 deployments, including Iraq, Afghanistan, Africa and shipboard.

Support of the MV/CV-22 is broken down between Bell and Boeing, explained Ed Apollo, sustainment program manager for the V-22 at Boeing. “Boeing leads support for the entire aircraft except wings and nacelles, while Bell does wings, nacelles and gearboxes.”

Part orders are split into two kinds. Orders for spare parts go to production buyers, who can save money by combining spares with manufacturing orders.

For repairs, Boeing has a cost-plus-fixed-fee contract. Once the government funds a repair, Boeing generally sends it to a shop or component OEM. The company has also set up its own repair facility in Fort Walton Beach, Fla., where some but not all components www.MLF-kmi.com

MLF 6.6 | 27

can be repaired. By investing its own money in this facility, Boeing can repair critical parts quickly and economically.

Boeing has invested $100 million in the supply chain for the V-22, the bulk in long lead-time parts stocked at OEM facilities. “When we get an order we can provide them the part out of our money,” Apollo said. “We did this to show that we have skin in this game.”

Boeing uses the same forecasting system, SPO, as the government. Bell has not had direct access to SPO, but SPO is being integrated into the Osprey Support Network, so Bell will be able to use it as well.

Rapid growth, rapid deployment and multiple engagements on ships have been the major support challenges, according to Apollo. “[Other challenges have been] high demand, sand and temperature, and there have been some obsolescence issues,” he added.

The aircraft comes in multiple configurations, and the MV-22 had three blocks: A, B and C. “That was a challenge to configuration management,” Apollo admitted. Fortunately, there is funding to convert As to Bs, “a step in the right direction.”

“We are on the cusp of doing a five-year PBL,” Apollo noted. He expects award in July or August. Incentives will be given to Bell and Boeing for response times on orders, and these will translate into incentives for other suppliers to keep repair turn-times short.

Littoral Combat Ships (LCSs) Two LCSs have been steaming, one more was delivered in early June, four are expected in the winter of 2012-2013, and the Navy should acquire two to four per year, summarized Rob Asselin, deputy program manager for LCS fleet introduction and sustainment at Naval Sea Systems Command (NAVSEA). “We started planning on sustainment in 2006,” Asselin said.

Although there are two different manufacturers, Lockheed Martin and General Dynamics Bath Iron Works, supply chains are very similar. With a small crew of about 40, much of the maintenance on the LCS is done on-shore. The ship carries a 60-day supply of parts to sustain it through two 30-day cycles, so it can go one cycle without replenishment.

For parts, the LCS relies on the U.S. Naval Supply Systems Command (NAVSUP), DLA and, for unique parts, on one of the OEMs. “So far, there have been no major problems, it has worked well,” Asselin summarized. “There have been no significant stock-outs or maintenance issues from not getting materials.”

Depots do engines or water-jet work, and some maintenance can be included in depot work. NAVSEA works with OEMs or NAVSUP to plan depot stops.

Depot visits are scheduled, with availability every four to six weeks for five days of work and a bigger visit scheduled every three to four months for up to 21 days to repair major equipment or pull the LCS out of the water.

“We are the train conductor,” Asselin said. NAVSEA uses standard Navy information systems, which are also used by OEMs. It uses a DLA demand model that emphasizes short-term, high-usage items.

“We also work with engineers to make sure forecasts make sense.”

NAVSEA also uses standard Navy requisition tools, Maintenance Figure of Merit Data and a condition-based maintenance tool.

About 68 percent of LCS materials come from military units and DLA with the remainder coming from OEMs. Changes are possible as the fleet grows. “We may shift to a PBL as we get more ships,” Asselin said. “PBLs become more attractive to 28 | MLF 6.6

OEMs with more ships. Firms like Fairbanks Morse or Rolls-Royce may want to take on more risk under a PBL for engines and move to total equipment care.” At present, LCS exploits only existing PBLs, for example with NAVSUP for navigation systems.

Joseph North, littoral ship system vice president at Lockheed Martin Mission Systems and Sensors, sees several sustainment challenges.

LCS’s low-manning concept drives a new maintenance philosophy and requirements. “LCS crews are not intended to perform a significant amount of maintenance on the ship at sea,” North noted.

The LCS concept of operations supports this by relying on shore-side support for repairs and maintenance.

The LCS is designed to operate over a 21-day cycle, spend a significant amount of time forward-deployed, and is required to spend more than half its time underway. “The supply chain must be flexible to meet these stringent deployment requirements,” North says.

Many LCS systems are unique to its frame, so contracting relationships with specialized support providers is required. LCSs are being contracted, built and delivered in half the time required for traditional ships. Time to react to notification is short, and waterfront support infrastructure must be flexible to accommodate rapid processes.

“Flexibility, affordability and responsiveness are paramount,” North stressed. “From back-end logistics, such as shipping and handling, suppliers need to be on schedule and on budget. There’s no room for error.” This has also required close coordination with designers and vendors for troubleshooting and repairs.

LCS vendors were selected to be affordable, reliable and flexible. Agreements focus on ensuring quick turnaround for emergent maintenance needs. Vendors are re-evaluated regularly to ensure they meet needs. Also critical to the supply chain have been long-distance support by help desks, the ability to access performance data remotely and fly-away support teams. Lockheed Martin manages shore-based spares for the LCS program. “Optimal shore-support footprint, both in home port and overseas, is still being adjusted based on experience from ship operations,” North said.

LCS information systems combine existing Navy systems integrated with contractor-configured systems. Lockheed Martin tracks materials in warehouses and spares held in remote or forwarddeployed sites. This and other data are made available to the crew and Navy shore representatives through a Lockheed Martin sustainment portal. The portal will be a fully-integrated information management system that includes Navy systems.

M-ATVs Karen Kulie is mine resistant ambush protected (MRAP) group leader and assistant program manager for logistics and sustainment at the U.S. Army Tank-automotive and Armaments Command (TACOM) Life Cycle Management Command. “We went on contract for M-ATVs in June 2009 and started work at Oshkosh in July 2009,” Kulie said.

MRAPs use organic support. DLA manages 95 percent of spare parts, mostly consumables, and TACOM manages repairable assemblies. “Oshkosh is the primary configuration manager and decides how to make improvements, for example the underbody improvement kit (UIK),” Kulie said. “They are also a primary source of parts.

We also work with some of their suppliers directly, depending on the system.” www.MLF-kmi.com

MRAP repairs are done in Kuwait and at 10 regional stations in Afghanistan that install retrofit kits and do battle-damage repairs.

These facilities use both military and civilian staff. “It’s a universal workforce,” Kulie said.

Kulie predicts organic support will continue. She said that, in aggregate, M-ATV has met its readiness goals from the beginning.

“We had some isolated challenges on parts, for example radiators.

Initially, we were above goal, and DLA increased the quantity of parts. Then we worked with Oshkosh, and they came up with a material solution and installed shielding.”

Kulie does not think the M-ATV is suitable for a PBL. “We have a big fleet. PBLs are sometimes good for low-density or complicated weapons like airplanes. This is just a truck and we use it everywhere. I can’t rule PBLs out, but it is not obvious we will use them.”

Kulie believes 90 percent of M-ATVs will probably be kept.

“There are no plans to divest, but the Army has not made a final decision on the fleet.”

“There was an urgent request to get the M-ATV into the field,” stressed John Bryant, vice president and general manager of Joint and Marine Corps programs at Oshkosh Defense. “Production rates exceeded traditional rates.” Oshkosh produced more than 8,000 M-ATVs in a year and half, versus 10,000 vehicles over 10 years for typical programs.

“And they did not want a vehicle that they could not fix,” Bryant noted. So the company had to deliver spares and repairs in tandem with the vehicles.

Oshkosh worked closely with both TACOM and with DLA to meet fast demand for both maintenance of M-ATVs and upgrades.

It supplied field service representatives (FSRs) and developed upgrades for increased protection. And it managed the evolution of configurations in a tough wartime environment.

“We leaned forward in all areas, supply of parts, tech manuals, FSRs, manuals and training,” Bryant said. Oshkosh’s experience with other MRAP programs, both medium and heavy, gave it a mature system for providing this forward support. “We knew what to do, and the JPO also had experience. We could supply part kits and battle-damage kits in the right quantity and quality. We watched demand and lead times.” Having hundreds of FSRs in theater providing real-time information made the job easier.

Oshkosh’s M-ATV contract was with TACOM and it worked closely with DLA on spares support, to provide needed parts without excessive inventories. FSRs worked closely with the JPO on the installation of upgrades. “DLA tends to purchase consumables and parts common to many vehicles, as opposed to secondary repairs,” Bryant explained. “If it goes on more than one platform, DLA tends to take it—for example, bolts.”

Jeff Koga, associate vice president of integrated product support, said Oshkosh forecasts demand for parts using history from similar platforms and ran its own tests on the M-ATV to get more test data. “This helped develop the initial push packages, then when that ran out, to fill DLA coffers.”

TACOM will sometimes order parts from Oshkosh, but also goes direct to other suppliers—for example, on tires. “Sometimes they buy from suppliers, who must meet performance levels in percentage fill rates and take the shelf risk,” Koga explained. “Others they buy on lead times.”

For repairs, the JPO uses a universal workforce, including MRAP OEMs sent out to work on multiple platforms. Oshkosh www.MLF-kmi.com

deployed 400 FSRs at eight forward operating bases in Afghanistan after training them at its own MRAP University.

For the UIK, Oshkosh developed a lean process to manufacture these in the harsh in-theater environment. “Lean is usually used only in the United States,” Koga noted. In seven months, 3,500 highquality UIKs were installed. “We supervised the setup, designed it, installed quality control and tooling.”

To monitor the fleet and collect data, Oshkosh used its Logistic Support Analytic Record, and to forecast spare needs it used its enterprise resource planning system, customized for the M-ATV. “It can track demand in real time, it knows lead times from suppliers and changes in these lead times, and it knows the variability of demand spikes,” Koga said. “So we know when to reorder and how to keep safe on spikes.”

There is no PBL on the M-ATV, but “we handle it as if we were under a PBL,” Bryant emphasized. “We focus on outcomes, not on the buys of commodities.” Although the U.S. will draw down in Afghanistan, Bryant sees the integration of M-ATVs into Army and Marine Corps fleets. “The contract on the vehicle may change, but we will continue to do what we do now, focus on customer needs, support them at low cost and stay ahead of obsolescence issues.” 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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Partnering for the Future Sorting out the benefits of working closely with industrial partners.

By William Murray MLF Correspondent

Partnerships between contractors and military organizations for depot-level maintenance and repair activities, in addition to performance-based logistics contracts, are allowing DoD to save millions of dollars annually through more efficient operations to sustain war fighting capabilities and the introduction and fostering of commercial best practices, according to vendors and a key Pentagon official who oversees $190 billion in military logistics programs.

These agreements are novel in the sense that they involve an “organic” government civilian and sometimes military workforce reporting to contractor oversight. According to contractors, their success sometimes hinges on the ability of government and vendor contractor officials to engage in open communications, as well as strong advocacy from within military services to consider new solutions to old problems.

According to Alan F. Estevez, assistant secretary of Defense for Logistics and Materiel Readiness, public-private partnerships can serve as a risk mitigation strategy. “It brings the best from government and industry to bear on providing support for the warfighter,” he told Military Logistics Forum. “Furthermore, it gives government access to expertise and technology it may not have and mitigates the risk of having a single sector (public or private) responsible for providing a needed capability.”

Estevez assumed his post in August 2011, the first federal career official to hold the position. For nearly five years previous to his becoming the assistant secretary of Defense for Logistics and Materiel Readiness, he served as principal deputy assistant within the same office. From October 2002 to November 2006, he was principal deputy undersecretary of Defense for Supply Chain Integration, when he became a member of the Senior Executive Service. He previously worked for the Office of the Secretary of Defense.

Cost savings are the most important benefits of public-private partnerships, according to Brian Lettiere, vice president and general manager of technical services at Honeywell Technology Services, whose company holds partnerships or performance-based logistics agreements with all the DoD services.

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“Public-private partnerships and [performance-based logistics] create cost savings through reduced inventories through better management/forecasting and in some cases use of contractor-furnished material,” he said.

“In these austere times, cost consciousness is best practice,” Lettiere said.

Working on an Air Force contract, for example, Honeywell has introduced more than 200 proprietary repairs and processes into the depots to improve efficiencies, product quality and productivity. “With that, we have seen depot product quality deficiency reports (quality escapes) drop to less than 1 percent over the entire contract period—ultimately saving time and money,” Lettiere said.

“Our defense-related [public-private partnerships] tend to involve collaborative arrangements related to the objectives of sustaining and enhancing readiness while providing more reliable, responsive and timely support to the warfighter,” said John Haima, senior vice president and business development director for Logistics and Engineering Solutions Business Unit at SAIC. Public-private partnerships for DoD logistics are usually discussed in the context of depot-level maintenance agreements, as allowed through the U.S. Code Title X in sections 2208(j), 2460, 2464, 2466, 2474, 2539B or 2667, according to Haima. SAIC also holds public-private partnerships with state and local governments and with federal agencies, which are different by their nature.

SAIC, for example, holds cooperative research, development agreements and testing services agreements with federal agencies, and those agreements are different by their nature than depot-level maintenance agreements with DoD organizations, according to Haima.

In the U.S. Code Title X Section 2466, Congress has enacted a law commonly known as the “50-50 Rule,” which states that no more than 50 percent of depot maintenance funds provided to a military service or defense organization can be spent on contractor work.

Pentagon officials have sought more flexibility in abiding by this law, since the capacity of defense depots can fluctuate substantially.

Public-private partnerships can enable military agencies to retain their skilled, organic

workforce, while having the flexibility to accommodate shifting demands for depot services during the drawdown from Afghanistan and Iraq, the need for reset services on fielded equipment, and the retirement of old weapons systems. When military agencies have more flexibility in how they spend their money, the logic goes, they are less likely to have to make painful choices between organic personnel layoffs during times slower times and paying for personnel who are not fully occupied.

The profit motive that contractors bring to public-private partnerships can work to both parties’ benefit, according to Steve Hurt, partner with A.T. Kearney Inc., a global management company in Chicago that works with the Air Force, Army and Marine Corps. Given the profit motive, “the contractor will bring in commercial best practices,” he said. He said that the Navy is particularly receptive of public-private partnerships for its depots.

Haima has seen public-private partnerships based on four models: workshare, direct sale, lease, and government-furnished resources or teaming. Workshare involves a shared workload for depot funded by a buying activity. Direct sale uses private entity subcontracts to depot for facilities and personnel. A lease involves a private entity leasing DoD facilities and/or equipment. Finally, government-furnished resources or teaming uses a pre-contractual memorandum of understanding. SAIC, according to Haima, seeks to help the government’s military and civilian workforce to better perform core competencies through public-private partnerships.

“For example, under a major indefinitedelivery/indefinite-quantity contract with a DoD agency, we entered into a partnership agreement with an aviation depot, whereby they could provide government furnished supplies and services to SAIC in support of contract delivery orders,” Haima said. After the aviation depot partnership agreement, according to Haima, SAIC won a delivery order for modification and extensive maintenance on C-130 aircraft for a foreign military sales end-user.

“Under our partnership agreement and a specific work agreement (SWA), our team included the depot’s personnel who provided the core capability to support operational www.MLF-kmi.com

flight program software for key aircraft navigational systems,” Haima said. “SAIC provided the depot with a statement of work detailing the deliverables and data required under the SWA.” When asked to describe a successful public-private partnership, Honeywell’s Lettiere chose the Army T55/CCAD partnership at the Corpus Christi Army Depot.

“Over the last seven years Honeywell has provided Logistic Support for the T55 engine overhauls for the Chinook helicopter,” he said.

In 2012 they were awarded the CCAD Weapons System Award for reducing turn time by 50 percent and also reducing overall program costs, said Lettiere.

According to Estevez, the Navy’s Fleet Readiness Center Southeast and General Electric’s (GE) partnership that supports the F404 engine, and the Air Force’s Warner Robins Air Logistics Center and Lockheed Martin partnership supporting the Sniper advanced targeting pod have provided “improved and affordable support to the warfighter.”

Public-private partnerships for DoD organizations have resulted in improved public facility and equipment utilization by introducing commercial technology and management practices, providing access to proprietary technical data, engineering expertise, and providing commercial spares provisioning, according to Estevez. “Contractors have benefited by avoiding capital investment when using public organic facilities and a motivated, skilled and fully trained organic workforce to perform maintenance tasks normally done by the original equipment manufacturer (OEM),” he said.

According to Haima, a non-OEM company like SAIC would otherwise need to invest in capital, equipment and other resources to give government agencies the competitive environment they seek.

“Working collaboratively with the government team also improves the use of available organic capacity, improves government facility utilization, and exposes the government team to industry’s best business practices and technologies,” he said.

Estevez doesn’t see a fundamentally different approach taken towards public-private partnerships between the military services.

“Partnering requires assessments of benefits and risks, clear agreements between the partners, and continual work to develop and maintain the relationship,” he said. “The end product is a partnership that reflects the priorities and interests of both parties, gains efficiencies and more importantly, supports the warfighter's requirements.” www.MLF-kmi.com

There are risks associated with public-private partnerships for contractors. “We tend to bid a significant portion of our work as fixed price,” said SAIC’s Haima. “The statutory and regulatory restrictions that are placed on the government teams often restrict the ability of the depots to bid in a like manner, placing the risk of the government’s [cost] performance on the contractor.”

“Schedule risks are often mitigated by clauses that prevent the prime contractor for being penalized due to government team performance or delays,” Haima said. “Additionally, we prefer to fully engage all team members during the proposal development process. Under [public-private partnership] guidelines, we are sometimes restricted in this regard with our government teammates due to the government team’s ‘rules of engagement.’ This can create risks through impacts on communication during critical proposal phases but may be offset by the benefits of the ‘core’ expertise that the depots provide.”

According to Honeywell’s Lettiere, publicprivate partnerships and performance-based logistics agreements can break down because of poor data validity and communications. In addition to ongoing and open communication between both parties, “current data and accurate forecasts are absolutely critical to the business case analysis of the government and the [contractor’s] business model.”

A big risk with public-private partnerships is expectation management, according to A.T. Kearney’s Hurt. “Things don’t always go well,” he said. “How do you respond to problems?” He advises both military organizations and contractors to take “joint ownership over the problem and the solution” and to avoid finger-pointing, which tends to result in a mutual erosion of trust.

Public-private partnerships naturally evolve through the development, production and sustainment phases from being contractor-focused during the initial stage, said Hurt. “Later, it starts becoming more organic-focused,” which means the partnership begins to put more emphasis on the government workforce, he said. Contractors should beware. “Don’t turn it into a scope or land grab opportunity,” he said.

According to Haima, SAIC is open to partnerships with both government and industry, given the company’s competencies. For example, “in collaborative demand planning, we work together with defense depots to better understand operational and maintenance trends, thus improving forecasting accuracy

and our ability to stock the right products in inventory to meet ever-changing warfighter demand,” he said.

Contractors can fill different roles in a public-private partnership, according to Hurt.

For example, a contractor can help to negotiate on behalf of the government a sustainment contract with OEMs and other contractors for a complex weapons system. In a reset scenario with DoD, furthermore, given the military drawdown in Afghanistan and Iraq, a contractor can help the military determine where to repair equipment and when it makes sense to “bury in the sand” equipment that has served its purpose. Contractors can also help government agencies evaluate alternate business models for hardware and software maintenance, according to Hurt.

Future prospects for public-private partnerships look good, particularly in the current budget environment, according to Estevez.

“If a program or industrial activity provides a good case for implementing a partnership that provides improved performance at reduced cost it will be considered. Furthermore, as our force structure and budgets shrink, maintaining our capabilities and capacity within the national industrial base is critical to maintaining our readiness. Partnerships are an important part of the solution.”

Lettiere sees an opportunity for Honeywell with the next generation of defense products, such as the Reaper turboprop engine, a component on the V-22, F-22 and F-35 air vehicles. “We expect our solutions to provide significant cost savings versus traditional support approaches while meeting or exceeding program performance goals,” he said.

“For legacy products, we are looking for greater integration and synergies across the joint services,” Lettiere said. “For product types that are common to the services, such as turbine engines, auxiliary power units, avionics, and wheels and brakes, Honeywell is looking to establish common support solutions,” he said. Through common operating systems, supply chains, program management and a logistics footprint, Lettiere thinks that Honeywell can provide even greater savings for DoD organizations.

SAIC’s Haima sees a lot of potential for public-private partnerships for complex and expensive systems, and he thinks they will evolve over time to keep pace with rule changes and requirements. He sees particular promise in the Federal Emergency Management Agency, which has shown “considerable flexibility in innovation” with its public-private partnerships with SAIC. O MLF 6.6 | 31

Transforming logistics is not so much about using faster ships or planes, but becoming more efficient and streamlining processes.

By Christian Bourge MLF Correspondent

Global logistics professionals know that streamlining the materials delivery process and maximizing efficiencies across the supply chain are integral, ongoing parts of any effective transportation operation.

Nowhere is this more true than in meeting the often-changing supply needs of U.S. military, which is currently dealing with the evolving transport logistics needs of troop presences across the globe along with an ongoing war with unexpected urgent supply needs that have to be addressed as quickly as possible.

The importance of streamlining the defense supply chain as part of broader global logistics transformation efforts has taken on heightened importance as the Department of Defense prepares for the possibility that on January 2, 2013, $500 billion in planned across-the-board military spending cuts will take effect as part of the Budget Control Act of 2011. In addition, even while logistics planners look toward the planned 2014 drawdown of U.S. troops from Afghanistan, the evolving situation along the Pakistan/Afghanistan border—which was recently reopened to NATO supply transport by Pakistan’s cabinet after being closed in November 2011 in retaliation for the killing of two dozen Pakistani troops by U.S. air strikes on border posts—demonstrates just how important planning and assessment, as well as flexibility, are in the supply transport sphere.

USTRANSCOM has had its eye on the importance of finding such efficiencies for some time. Much of that effort lies with their Strategy, Policy, Programs and Logistics Directorate, known as the TCJ5/4. Air Force Lieutenant Colonel Tom Doan, branch chief, and Major Lance Fraley, deputy branch chief, explained that the group collaborates with the Defense Logistics Agency (DLA) under the DoD’s Distribution Process Owner Strategic Opportunities (DSO) effort with each of the service and combat commands to identify inefficiencies and increase the overall effectiveness and interoperability of DoD supply chain activities, systems and data without adversely impacting the warfighter.

With the DLA charged with handling supply alignment and strategic network optimization, J5/4 deals with finding greater efficiencies through strategic surface and air optimization as well as overall process improvements.

“To put it bluntly, we look for ways to pack containers better,” said Fraley. “We look at ways to increase utilization on surface and air transportation modes.”

The breakdown for deliveries of military supplies and cargo is an often complex one, with a combination of truck, trains, ship and plane shipment potentially coming into play. The decisions about what mode of transportation to use are often algorithmically-based and can vary. However, if materials are classified as urgently needed, such as weapons systems or ammunition, they are typically sent to their final 32 | MLF 6.6

destination primarily by aircraft, while multi-modal distribution is used when timing is less of an integral factor. This often means moving deliveries as far forward as possible using surface transportation to a seaport if the destination is accessible by ship, or travel by ship to be then transported by truck or train. Plane transport is also employed at this point if the destination is not ground accessible from port or because of delivery timing concerns.

One major challenge to intermodal transportation is that sea and land transport utilize 20-foot or 40-foot containers, while airlifting relies mostly on the use of the 88-inch-by-108-inch pallets under the Air Force 463L materials-handling system. This creates packing challenges both in terms of how much can be shipped as well as the need for potential repackaging between air, land and sea transportation modes. This can result in not only shipment delays but also lost cargo and increased shipment costs.

Doan noted that for surface matters, the group pushes for as much use of the 40-foot container as possible because it offers the greatest cost containment.

“What we always try to advocate is use of the 40-foot container,” said Doan. “Although it costs about 20-25 percent more than the 20-foot container, it gives more capacity. The more you can utilize the 40-foot container to the warfighter, the greater efficiencies you can utilize.”

Similarly, Fraley noted that 463L pallets should be built to maximize load as much as possible. To that end, their branch is working with partners on a pallet maximization program aimed at making the best use of the time available for ground crews to build the best pallet possible. This means shipping as much as is possible on the mode of transport to a specific destination.

While crews were once given a designated amount of time in the past to build pallets, Air Force Air Mobility Command broke down the process several years ago, providing the realization that if restrictions on how pallets were built were lifted and more time was given based on the specifics of the situation, including delivery deadline and other factors, they could be more efficiently used with more cargo being flown to both intermodal and end destinations.

“The more efficiently you build a pallet, the more efficiently you can build an aircraft,” he said. “If given enough time you can build it perfectly.”

Overall, the effort is a prime example of how J5/4’s application of performance matrixes to the military transportation supply process leads to their recommendations on how to improve the delivery side of the supply chain in order to most efficiently to meet warfighter requirements. www.MLF-kmi.com

Looking to the future, Doan said their branch is currently working with AMC on examining ways of combining different logistics missions, contingency and channel, with the same starting point and destination into a single aircraft. The concept, currently in the planning stages, has the goal of reducing the number of aircraft used to move cargo to the same place and lower shipping costs.

The branch’s work with the DLA and GSA to identify ways of streamlining materials delivery has shown process improvements of 17 percent to 25 percent in some areas by its logistics partners.

In terms of cost avoidance, their fiscal year 2012 target of garnering $500 million in savings was reached four months ahead of schedule.

The DSO effort has a goal of finding an additional $500 million in cost avoidance by FY15.

“It’s really applying our experience and expertise, both military and contractors, with commercial benchmark experience,” said Doan of their work as “middle man” between stakeholders. “Using this combined expertise, that is where we figure out solutions.”

Partner Supply Chain Model Defense logistics transport-related innovation is not only being seen within TRANSCOM but also within DoD industry partners.

DynCorp International, whose U.S. military contracts include operation and maintenance of communication suites for three Navy Military Sealift Command (MSC) maritime prepositioning squadrons and as many as nine of its joint high speed vessels, has in the last 18 months put into place what Eric George, senior vice president of supply chain for the firm, said is a unique, holistic logistics model for the company.

The model combines a combination of propriety technology and concentration of supply chain operations into a cohesive whole that is being used to fulfill supply needs for all DoD contracts.

“We were able to put a supply chain in place that [incorporates] the entire [supply] life cycle,” George told MLF. “It’s the entire piece, not just one thing. I would say we have a very progressive idea of what a supply chain is. It’s truly the whole gambit of everything a company would need to buy in terms of services all the way to endgame of the delivery.”

George, who joined DynCorp International in 2010 to establish and lead its global supply chain capabilities, explained that the firm’s supply chain team works around a centralized supply chain center of excellence that controls sourcing and logistics for company supply using a combination of cost analytics, e-sourcing and targeted sourcing, which combine to provide cost savings for their customers.

Important to this model is the movement from a pure transaction-based purchasing model to one where the entire supply effort is leveraged, a move which he said has so far provided $150 million in savings. In addition, all portions of supply efforts are critiqued through a supplier rating system intended to ensure efficient supply management, which he said has provided “exponential improvements in procurement” while allowing for improvement in synchronization of their logistics tool set. The company’s senior team reviews scorecards for individual companies on a monthly basis and performance updates are sent to the suppliers as needed.

Another integral part of their model is a hub and spoke distribution operation that consolidates supply transport and quality control at two quality control centers, one in Texas and another in Dubai, through which all materials are received, inspected and www.MLF-kmi.com

shipped to destinations worldwide on the customer’s schedule. At these centers, each order is inspected for quality, repacked for the least expensive shipping method appropriate to delivery timeline and—in the case of U.S. government property—checked, tagged and entered with proper serial numbers and coding into the firm’s automated inventory system. The firm relies on various modes of surface and air transport to deliver materiels, depending on client need, relying on forwarding companies to control the process.

Williams said their methods have eliminated the need to go through the entire supply cycle when things arrive broken or if shipping counts are wrong, and demonstrate how forward-looking planning can help ensure efficient supply logistics.

“We are now able to control here on the stateside and quality inspect to make sure it is right before it’s shipped forward,” he said.

“The other part of establishing [efficient] supply chain capability is establishing behaviors. Operational improvement is really a planning mindset. Now we are looking to be in front of the [contractual] requirements, when it is possible.”

Next Gen Military Sealift Command Another important component in the internal U.S. military logistic effort to streamline the mobility aspect of the supply chain is that of the MSC. The Navy’s sea transportation integrator works with DLA and TRANSCOM to make sure materials are at the right place at the right time, according to Navy Captain Don Williams, of their logistics directorate.

“We’re a cog in that wheel,” explained Williams. “DLA does a lot of the forward positioning; TRANSCOM determines the optimal way to get it where it needs to be, where we can pick it up and get it to our end user.”

Williams said that as DLA and Naval Supply Systems Command are examining their global stock posture and how they source materials, there is a focus on improving transparency throughout the supply system to provide better real-time demand visibility and assessment.

“We have been implementing revolutionary IT technologies that have allowed us to obtain global visibility of our assets, centralize stock control and reduce manpower involved in some of these functions,” said Williams.

Implemented over the last three years on combat logistics ships, MSC’s modified Shipboard Configuration Logistics Information Program (ShipCLIP) for load management provides supply personnel with ship-specific tools allowing for automatic updating of operations logistics supply data. Once entered, the system ensures that the data is supplied to both onboard and onshore logistics personnel. The module is an add-on to existing systems and unifies relational supply as well as material financial control in the onboard data system.

This has helped streamline combat logistics ship workloads by taking stock control off individual vessels and has increased delivery efficiency by decreasing the time for relaying logistics supply information to shore command from 30 days to within 24 hours. This also allows for a streamlining of the level of resupply materials delivered to combatants by combat force ships because resupply is based on improved logistical data.

“That has been a significant money saver for Military Sealift Command to the tune of about $4.5 million a year,” said Williams.

In addition, he added that the increased asset visibility and data sharing allows for improved forward deployment of assets for MLF 6.6 | 33

delivery (based mostly on historic demand), reduced manpower requirements, and centralized stock control at the Norfolk-based command. He compared this centralization to the process by which Wal-Mart headquarters controls deliveries for all of its stores, noting it is now possible because the end-user needs are better understood by the command.

And while MSC deals with ship-based transport, Williams said that in the current budget environment, the high cost of premium transport will mean the greater use of surface transportation by DoD and Navy along with comprehensive forward stock positions to keep down delivery costs.

Afghan Connections Logistics transportation and supply chain management is not only about streamlining processes to maximize efficiencies but also overcoming unexpected challenges. Much of what ends up in the hands of the warfighter was, at some point, in the hands of commercial carriers that handled mode selection for delivery of contracted shipments.

Commercial vehicle transport—land, sea and air—has also proved vital for the U.S. military in recent months, both as an augment to existing military sea mobility operations long used to get material to transport shipping points overseas and also to complete the last mile of delivery when existing operations are limited.

A primary provider of commercial air and sea services to the MSC is Maersk Line, Limited, the largest U.S. flag commercial carrier moving cargo overseas and intermodally for the U.S. military and a major contractor operating and maintaining vessels for the MSC. Their recent experiences ferrying supplies to the warfighter show that logistical flexibility is more than just improving technology or supply chain management processes; it is also about advanced planning and having efficient networks in place to allow for alternative operational capabilities when a portion of the primary supply chain is compromised.

In 2010, the U.S. opened the Northern Distribution Network (NDN), a commercial logistical network for supplying Afghanistan by connecting it with contacting Caspian and Baltic ports via Central Asia, Russia and the states of the Caucasus. This network has become central to delivering supplies to U.S. soldiers in Afghanistan after routes over the Pakistan border were closed last year [since reopened], according to Torben Svenningsen, senior director of U.S. government sales for Maersk.

“We first said that is a long, long way, 5,000 kilometers into Afghanistan,” Svenningsen told MLF. “Who would have thought, but we did it. The designers of this NDN never imagined that it would be for 100 percent of the U.S. military cargo.”

Once Maersk’s sealift cargo shipped from ports on the U.S. East and Gulf Coasts reaches European destination ports, military cargo was traditionally moved via rail and truck into Afghanistan through its northern border. Svenningsen said that prior to the border shutdown, this network accounted for around 35 percent of the military cargo heading into the country, but was forced to handle the entirety being sent into theater.

He explained that part of the ability to meet the increased need through this so-called new Silk Route was because of already existing efforts to augment land-sea shipment with air shipping to increase the speed of delivery. It’s a model that’s been used commercially for years but not common in military transport, which the firm adapted to the unexpected shift in the transport supply chain.

Existing political relationships and internal capabilities were needed to deal with varied regulations for transporting supplies across borders and transport mode types, and these relationships remain important, said Svenningsen.

Having technology in place to ensure accurate product visibility also remains an important factor to logistics transportation success.

The NDN system requires the ability to go from sea containers to air and land transport pallets across multiple countries while scanning every box to identity discrepancies based on the data provided by manifests, federal government TCN tracking numbers, and the multiple RFID tracking tags placed on any given shipment.

In the end, Svenningsen echoed the thoughts of the other logistics officers and experts, noting that not only planning but constant vigilance remains central to ensuring ongoing increased logistics efficiency.

“We’re always looking for efficiencies in both price and speed to market,” he said. “We’re constantly looking and weighing those factors. The most important thing to us is servicing the warfighter and meeting the contract to do that.” 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.

34 | MLF 6.6

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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.

MLF RESOURCE CENTER Calendar

Advertisers Index AAR..........................................................................................................7 www.aarcorp.com Aviall......................................................................................................25 www.aviall.com Booz Allen Hamilton.............................................................................23 www.boozallen.com/defense GSA........................................................................................................15 www.gsa.gov/specialorderprogram IHS.........................................................................................................C4 www.ihs.com JLG Industries.........................................................................................3 www.jlg.com John Deere..............................................................................................5 www.johndeere.com/military New Breed.............................................................................................20 www.newbreed.com Northrop Grumman Technical Services..............................................11 www.northropgrumman.com/ts Oshkosh Corporation...........................................................................C2 www.oshkoshdefense.com ProModel...................................................................... Table of Contents www.promodel.com/army SAIC.......................................................................................................C3 www.saic.com/logistics SupplyCore...........................................................................................16 www.supplycore.com/partner TSSi.......................................................................................................29 www.tssi-ops.com W.W. Williams Logistics......................................................................17 www.wwwilliams.com

NEXTISSUE

August 13-15, 2012 Tinker and the Primes Oklahoma City, Okla. www.tinkerandtheprimes.com/index.php

September 25-27, 2012 Modern Day Marine Quantico, Va. www.marinecorpsexpos.com

September 9-12, 2012 NGAUS Conference Reno, Nev. www.ngausconference.com/12NS

October 7-11, 2012 Logistics Officers Association Conference Washington, D.C. www.loanational.org/conference/

September 22-26, 2012 NDTA Forum & Expo Anchorage, Alaska www.ndtahq.com/events_forum_expo. htm

October 22-24, 2012 AUSA Washington, D.C. www.ausa.org

Special PULL-OUT SUPPLEMENT

ManTech............................................................................................................... C2 www.mantech.com ManTech..............................................................................................................6-7 www.mantech.com Wyle...................................................................................................................... C4 www.wyle.com

The Publication of Record for the Military Logistics Community

August 2012 Vol. 6, Issue 7

Cover and In-Depth Interview with:

Maj. Gen. Charles L. Hudson

Commander U.S. Marine Corps Logistics Command

Special Section

Maintaining Readiness

Features

Rugged Computing Building the Pacific Logistics Network Educating the Logistician Powering the FOB

Who’s Who at CECOM A special pull-out supplement featuring an interview with Major General Robert S. Ferrell, CECOM commanding general, plus a detailed look at the organizational structure and business operations of CECOM. Other features include a two-page pictorial spread of CECOM’s senior leadership plus a review of top critical contracts.

Bonus Distribution Modern Day Marine DoD Maintenance Symposium

Insertion Order Deadline: July 30, 2012 • Ad Materials Deadline: August 6, 2012 To Advertise, Contact: Jane Engel, MLF Associate Publisher 301.670.5700 x 120 • jane@kmimediagroup.com

www.MLF-kmi.com

MLF 6.6 | 35

INDUSTRY INTERVIEW

Military Logistics Forum

June Shrewsbury Vice President of Technical Services Lockheed Martin Global Training and Logistics Q: Provide background on Lockheed Martin GTL and your work with the DoD. A: Lockheed Martin Global Training and Logistics is focused on fast-turn, responsive logistics services and technology as well as advanced simulations that help prepare warfighters for operational demands.

Our logistics expertise spans across the services and includes supporting the U.S. Army’s Field Logistics Readiness Centers at Forts Benning, Bragg and Stewart; the U.S. Navy with in-service engineering and logistics life cycle support; and the U.S. Marine Corps with modernization and sustainment efforts.

Q: What are your core business areas?

A: Lockheed Martin’s training and logistics business delivers full-spectrum support to the warfighter, whether it is the sustainment that ensures their equipment is functional and reliable or training technologies and programs that support their missions. Our core logistics areas include technical services, which target those rapid-response logistics and sustainment opportunities; F-35 sustainment, which encompasses training as well as prognostics and maintenance; enterprise logistics, which features advanced logistics technical innovations; and sustainment support to special operations customers.

Q: How is Lockheed Martin helping the DoD to meet current logistics objectives?

A: We consider our customer’s challenges our own. Right now, there’s an increased need to maintain capabilities with smaller forces, a focus on modernization to address gaps, resetting damaged and worn equipment after years of war, and constrained budgets.

We’re consistently integrating innovative elements to our support—whether it’s taking lessons from the performance-based logistics programs we do for the U.S. Navy’s H-60 Tip to Tail program, implementing a program management dashboard that gives our customers real-time, transparent information, or enhancing productivity through a combination of transformational logistics tools and processes and a culture of “get it right the first time.”

36 | MLF 6.6

a broader number of mission requirements.

So instead of being solely tasked with doing transport, for instance, a Lockheed Martin logistician might have expertise in maintenance, quartermaster duties, and transport to just name a few.

Q: What is a program that you think epitomizes partnership with the DoD? A: The modernized target acquisition designation sight/pilot night vision sensor effort for the AH-64D Apache attack helicopter has been tremendously successful. This performance-based logistics contract has consistently exceeded performance metrics in areas like materiel availability and cost savings— and we’re using the best practices there to inform how we create and deliver value in sustainment to customers in other areas.

This program also was honored recently with the U.S. Secretary of Defense Performance Based Logistics Award, the eighth time Lockheed Martin has won this award.

Q: What do you see as your primary challenges?

A: Perhaps the largest challenge is staying flexible as operational requirements shift. As our military transitions from a war footing to a readiness posture, our customers’ sustainment needs will change. We’re exploring options we can offer to support this transition and will work with our customers and industry partners to assist in planning for these new requirements.

The equipment itself presents its own challenges—from its sophistication, which requires that our people have the best technical skills for repair, reset and maintenance, to the sheer amount—making predictive maintenance schedules and strong supply chain management practices will remain imperative.

Q: Are you ready to meet the challenging DoD budgetary times ahead?

A: A number of efforts are underway, including developing an agile workforce. Lockheed Martin is focused on developing multi-functional logisticians, whose skill sets can span

Q: How are you positioned for 2012?

A: We’ve been listening to our customers about the value they expect from us and the challenges that have encouraged them to be creative and smart with their resources.

Accordingly, we’re approaching every opportunity for new business as a chance to offer our customer the best value, from implementing new processes that streamline operations to technologies that help predict, mitigate or avoid issues that cause costly delays. We’re doing the same for current programs we support, including identifying $200 million worth of equipment for a closing military health facility that could be transferred and used by other hospitals.

Q: What are your goals for 2012?

A: It’s certain that in the near term, we’ll see more changes in the competitive landscape, so at a high level, we’ve emphasized staying agile and affordable so we can adapt as the environment shifts. Some upcoming focus areas for us also include offering best value support options for the U.S. Army’s rotary wing maintenance needs.

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

A: Absolutely. We’re proud of the relationships we’ve developed with industry partners that benefit our customers, particularly those with more than 10,000 diverse and small business suppliers. In addition to consistently receiving outstanding Defense Contract Management Agency ratings for the opportunities we provide small businesses, Lockheed Martin has been recognized by others for that commitment, including recently being named one of the 10 best corporations for veteran-owned businesses by the National Veteran-Owned Business Association. O www.MLF-kmi.com

Logistics Solutions for Affordable Readiness NATIONAL SECURIT Y The U.S. military needs reliable operational availability at a low life-cycle cost.

To provide this affordable readiness, SAIC delivers a wide range of logistics, product support, and supply chain management solutions. Smart people solving hard problems.

Visit us at saic.com/logistics

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