DLA HEP Forum Handouts Defense Logistics Agency

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					  Defense Logistics Agency




DLA HEP Forum Handouts

         May 17, 2005
                            The DLA Enterprise
    FY01 Sales/Services:        $17B                    Scope of Business
    FY02 Sales/Services:        $21.5B
    FY03 Sales/Services:        $25B       •   54,000 Requisitions/Day
    FY04 Sales/Services:        $28B       •   8,200 Contracts/Day
    FY05 Projection:            $28.7B     •   #63 Fortune 500 – Above Prudential Financial
•    Land/Maritime/Missiles: $2.7B         •   #2 in Top 50 Distribution Warehouses
•    Aviation:               $3.4B         •   26 Distribution Depots
•    Troop Support:          $11.9B        •   5.2 Million Items
•    Energy:                 $7.0B         •   24.7M Annual Receipts and Issues
•    Distribution:           $2.6B         •   1411 Weapon Systems Supported
•    Other:                  $1.1B         •   144.0M Barrels Fuel Sold (FY 04)
•    ~95% of Services’ repair parts
•    100% of Services’ subsistence,        •   $14.6B Annual Reutilizations/Disposals
     fuels, medical, clothing & textile,
     construction & barrier materiel
                                                              People

         Foreign Military Sales            •   21,429 Civilians
                                           •   528 Active Duty Military
• Sales: $813.8M                           •   668 Reserve Military
• Shipments: 501K
                                           •   Located in 48 States/28 Countries
• Supporting 124 Nations                                                                 2
                              Defense Logistics Agency
CORPORATE STAFF

      DIRECTOR                                                      DLA Director                         Vice Director
                                                                    Vice Admiral                         Major General
      VICE DIRECTOR                                                Keith W. Lippert                      Mary Saunders
                                                                     Supply Corps,                        United States
          DT                                                       United States Navy                       Air Force
                                   CSM
    TRANSFORMATION




   DES            J-1                 J-3          J-4              J-6             J-8           J-9
ENTERPRISE      HUMAN              LOGISTICS   CUSTOMER      INFORMATION       FINANCIAL       RESERVE        SPECIAL
 SUPPORT      RESOURCES              OPS          OPS              OPS            OPS          FORCES          STAFF



BUSINESS UNITS
      DEFENSE            DEFENSE      DEFENSE                             DEFENSE
                                                                                            DEFENSE          DEFENSE
       SUPPLY             SUPPLY       SUPPLY                             ENERGY
                                                                                          DISTRIBUTION    RE-UTILIZATION
      CENTER             CENTER        CENTER                              SUPPLY
                                                                                             CENTER        & MARKETING
     COLUMBUS           RICHMOND    PHILADELPHIA                          CENTER


SERVICE ACTI V ITIES
   DEFENSE                DLA           DLA                DLA                                     DOCUMENT
                                                                                DEF LOG INFO
                                                                                                 AUTOMATION&
   NATIONAL             PACIFIC       EUROPE             CENTRAL                 SERVICES         PRODUCTION
  STOCKPILE
                                                                                                    SERVICE               3
                Top Five Priorities
• Mission –
 • Support to the Warfighter
 • Distribution Process Owner
• Transformation –
 • Enhanced Capabilities for the Future Warfighter
• People –
 • Transforming Our Human Capital and the Workplace
• Alignment –
 • To Warfighters…To Supply Chains
• One Enterprise –
 • Seamless Partnering for Warfighter Logistics Support
                                                          4
                                           Cost Recovery Rates
                                                Over Time
                        (Operating Costs as a Percentage of Total Sales)
          CRR %

          33.0
          30.0                                                  FY 06 … 14.5%
                                                             Lowest Cost Recovery
          27.0                                                Rate in DLA History
Percent




                                                               Plan to Reduce to
          24.0                                                   12.7% in FY11

          21.0
          18.0
          15.0
          12.0
                  FY
                        FY
                              FY

                                    FY
                                          FY
                                                FY
                                                      FY9
                                                      FY9
                                                      FY9

                                                      FY0
                                                      FY0
                                                      FY0

                                                      FY0
                                                      FY0
                                                      FY0

                                                      FY0
                                                      FY0
                                                      FY0

                                                      FY0
                                                      FY1
                                                      FY1
                   91
                         92
                               93

                                     94
                                           95
                                                 96

                                                         7
                                                         8
                                                         9

                                                         0
                                                         1
                                                         2

                                                         3
                                                         4
                                                         5

                                                         6
                                                         7
                                                         8

                                                         9
                                                         0
                                                         1
                         Savings For The Warfighter
                                                                                    5
                     Transformation
                     Key Initiatives

• Customer Relationship Management - CRM
  • Processes, tools and people to move from transaction-based to
  partner relationships
• Business Systems Modernization - BSM
  • End-to-end ERP
  • Order fulfillment, Planning, Procurement, Financial
• Global Stock Positioning
  • Pre-positioning to optimize readiness at least cost
  • OSD, Joint Staff, Service, TRANSCOM and DLA
• Supplier Relationship Management – SRM
  • Strategic Material Sourcing for 500,000 business drivers
  • Strategic Supplier Alliances with 32 critical suppliers


                                                                    6
         Transformation – Key Initiatives

• Customer Relationship Management - CRM
     • Processes, tools and people to move from transaction-based to
     partnering relationships
• Supplier Relationship Management - SRM
     • Strategic Material Sourcing for 500,000 business drivers
     • Strategic Supplier Alliances with 30 critical suppliers
     • Supply Chain Integration

• Business Systems Modernization - BSM
     • End-to-end ERP – COTS based process re-engineering
     • Order fulfillment, Planning, Procurement, Financial, Tech/Quality
• Distribution Planning Management System - DPMS
     • Robust material positioning & warehouse optimization
     • Global decision making & management for 26 depots
                                                                           7
      Transformation – Key Initiatives
• Integrated Data Environment – IDE
     • eSynchronizes DLA’s internal processes
     • Provides DoD-wide log data exchange & interoperability
     • Total Asset Visibility

• Global Stock Positioning – GSP
     • Pre-positioning to optimize readiness at least cost
     • OSD, Joint Staff, Service, TRANSCOM and DLA


• National Inventory Management Strategy - NIMS
     • Collaborative inventory investment reduction effort
     • Rationalize levels and inventory management

• BSM – Energy (Fuels Automated System – FAS)
     • Commercial software – best practices
     • Deploying now – integration w/BSM to follow              8
      Transformation – Key Initiatives
• Product Data Management Initiative – PDMI
     • Technical data – specifications, drawings and configuration
     data – associated with materiel the agency manages
     • Controlled, stratified access to data via linked data bases

• Executive Agent – EA
     • DLA-Services partnership synchronizing logistics for common
     materiel: fuel, medical, subsistence and construction

• Reutilization Modernization Program – RMP
     • Closing the loop in Supply Chain Integration modernization
     • Customer focus, collaboration, asset visibility, security and
     financial compliance

• Work Force Transformation
     • Transformation alters every facet of environment
     • Structured, rigorous and disciplined program is in place
                                                                       9
                            Summary
• Focused on Improved warfighter support and
  reduced costs
  • 31.2% reduction in backorders and improved readiness
    (since Oct 01)
  • 51% decrease in cost recovery rates
  • $3B back to services FY 04-09
• Record Setting Support with Demand
  at Historic Highs
• DOD Leader In Enterprise System
  Transformation
      Tomorrow’s vision … smaller, more efficient, leveraged
                  with best business practices
                                                               10

				
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