Logistics as a Competitive War Fighting Advantage

DEFENSE BUSINESS BOARD

For the Secretary of Defense

Logistics as a Competitive War Fighting Advantage

DBB FY17-03

Recommendations on the logistics enterprise and its ability to provide the Nation a competitive war fighting advantage

Defense Business Board

PREFACE

This study, Logistics as a Competitive War Fighting Advantage, is a product of the Defense Business Board (DBB). Recommendations by the DBB contained within are offered only as advice to the Department of Defense (DoD) and do not represent DoD policy.

The DBB was established by the Secretary of Defense in 2002, as authorized by the Federal Advisory Committee Act of 1972 (5 U.S.C., Appendix, as amended), and governed by the Government in the Sunshine Act of 1976 (5 U.S.C. ? 552b, as amended), 41 CFR 1023.140, and other appropriate federal and DoD regulations. The DBB provides the Secretary and Deputy Secretary of Defense with independent advice and recommendations on how "best business practices" from the private sector's corporate management perspective might be applied to overall management of DoD. The DBB's members, appointed by the Secretary of Defense, are senior corporate leaders and managers with demonstrated executive-level management and governance expertise. They possess a proven record of sound judgment in leading or governing large, complex organizations and are experienced in creating reliable and actionable solutions to complex management issues guided by proven best business practices. All DBB members volunteer their time to this mission.

Logistics as a Competitive War Fighting Advantage 1

DBB FY17-03

Defense Business Board

Optimizing the Logistics Enterprise to Maintain a Competitive War Fighting Advantage

TASK

In August 2015, the Deputy Secretary of Defense directed the DBB to form a task group to recommend actions the DoD should take to optimize its logistics enterprise. The Terms of Reference guiding this effort can be found at Tab A.

The DoD faces an extraordinary confluence of management challenges, mounting costs, and budgetary reductions. The convergence of these conditions presents the DoD with myriad challenges and opportunities, yet also provides an opportune time for Defense leadership to make adjustments to the management of the logistics enterprise.

Major General Arnold Punaro, U.S. Marine Corps, Retired, served as the chair of this task group. Other members include John O'Connor and William Phillips. Two military representatives to the DBB, Captain Garrett Campbell, U.S. Navy and Lieutenant Colonel Lisa Mabbutt, U.S. Air Force, served as the task group's staff support.

PROCESS

The task group interviewed and took briefings from over 40 senior officials and experts from within DoD, other government agencies, and the private sector. By interacting with the breadth of logistics professionals, it ensured the task group members understood the current challenges associated with the domestic logistics enterprise, as well as the challenges to supply chain resiliency posed by our Nation's potential adversaries.

The task group compiled and compared logistics best practices from government and the private sector, reviewed applicable laws, regulations and policies, and reviewed DoD strategic documents, reports, and available data. This included audits and studies from think tanks, corporations, businesses, and government agencies.

Logistics as a Competitive War Fighting Advantage 2

DBB FY17-03

Defense Business Board

The task group's draft findings and recommendations were presented to the full DBB membership for deliberation and vote at the October 20, 2016 quarterly Public Meeting wherein the DBB voted to approve all recommendations offered. See Tab B for the briefing presented to and approved by the DBB. Tab C includes DoD component reponses.

BACKGROUND

As reported in the DBB's 2011 study Global Logistics Management, the DoD operates one of the largest logistics enterprises in the world, comprised of over 100,000 suppliers, $96.4 billion in inventory, and supported by 18 maintenance depots, 25 distribution depots, and over 49,000 customer sites. The annual cost to operate and maintain this vast logistics enterprise is over $170 billion and covers supply, maintenance, and transportation.1

The Department's logistics enterprise exists primarily to support the warfighter operating at the `tip-of-the-spear' and as such provides the U.S. military a proven and recognized qualitative advantage over adversaries. However, it is necessary that DoD optimize the use of resources and maximize the dollars available to support the spectrum of its missions. While the enterprise has made significant progress over the last several years toward reducing inventory and streamlining processes, additional opportunities for increasing effectiveness exist.

The task group followed a specific path in its review of the logistics enterprise. With an understanding that significant parts and functions of DoD's logistics enterprise has been extensively studied, task group members undertook a comprehensive review of prior studies and reports conducted by DoD, DoD advisory groups, Congress, the U.S. Government Accountability Office (GAO), and other relevant organizations to identify opportunities for improvement. This helped narrow the task group's focus to potential problem areas and to identify areas where change might be implemented and/or further efficiencies achieved. Chief among the task group's efforts was the review of past and current governance models for logistics across DoD. The task group endeavored to formulate its recommendations in a practical manner to

1 Defense Business Board study FY11-07 Global Logistics Management. Washington, D.C., 2011

Logistics as a Competitive War Fighting Advantage 3

DBB FY17-03

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download