Skip to Main Content
Access your saved content
Accenture helped this US government agency plan, launch and execute its Business Systems Modernization initiative.
More than 700 business processes were reengineered and integrated into SAP R/3 and Manugistics software, helping the agency fulfill its vital defense functions more efficiently on the path toward high performance.
The Defense Logistics Agency (DLA) is the U.S. Department of Defense's largest combat support agency. It provides global, around-the-clock logistics and contract management in both peacetime and wartime to America's armed forces as well as several civilian agencies and 124 nations. The DLA manages more than 5 million consumable items, from groceries to jet fuel. It processes more than 30 million annual distribution actions, which account for approximately 90 percent of the consumable items used by the Department of Defense. Supporting these efforts are approximately 20,000 employees in 48 US states and 28 countries. The DLA had fiscal 2006 revenues of US$35.5 billion, making it comparable to the 58th-largest company on the Fortune 500 list.
The agency chose Accenture to help plan, launch and execute its Business Systems Modernization (BSM) initiative. Agency executives valued Accenture's willingness to share risk and believed that Accenture brought, among other assets, two critical factors for success: knowledge of the agency's processes and systems (earned from previous projects) and market-leading supply chain expertise honed from work in both government and private industry.
A DLA and Accenture team reengineered more than 700 business processes and integrated SAP R/3 and Manugistics software, replacing dozens of mission-critical legacy systems while avoiding the risk and cost of custom development. Key project actions included strategic segmentation, business process design, technology architecture design and development, organizational design and development, user training, business continuity planning, processing center development, configuration of core SAP enterprise resource planning (ERP) modules and configuration of Manugistics supply chain and demand planning. This major transformation effort crossed all agency commodities, representing end-to-end material, financial and procurement management in a shared, integrated business data environment.
SAP NetWeaver Business Intelligence serves as the central data repository and provides a common platform for future enhancements. Accenture organized a strategic partnership between the agency, Accenture and SAP to build an integrated supplier relationship management solution to better support complex government procurement and give DLA unique acquisition capabilities and automation. To better align the organization to the new standardized processes and systems, Accenture performed a complete organizational redesign, restructuring the model, roles and job from item-focused to customer- and supplier-focused.
Since the systematic release of items into the new solution, the system has processed more than 2 million purchasing requests and fulfilled nearly 7.4 million customer orders. It is managing an inventory value of nearly US$5.5 billion and, when fully deployed, will serve approximately 7,500 users. Accenture continues to support the DLA by providing all production application hosting and infrastructure services for BSM applications, helping the system achieve 99.9 percent availability.
With total asset visibility, greater customer insight and optimal supply planning and sourcing, the BSM initiative significantly changed the way the DLA does business. For example, BSM reduced logistics response time from 21 days (FY 00) to 15 days (FY 07) and customer order notifications from frequently exceeding one work day to under four hours. The sales and operations planning component of the initiative identified $100 million in cost avoidance by reductions in forecasts. BSM achieved $72 million in cost savings over legacy systems and 99.7% system availability with a single ERP instance. It enabled significant supply chain improvements, reducing the FY 08 forecast by nearly $300 million and reducing safety stock investment by $150 million. In demand planning, forecast errors were reduced by as much as 85%: In one month, a forecast error reduction of $8.9 million was achieved.
Outlook from Accenture
Outlook is a journal of high-performance business.
View Latest Issue
Accenture delivers a wide range of healthcare solutions—from addressing back office functions and electronic medical records to clinical transformation and consumer engagement. Our solutions are backed by real-world experience, business and clinical insights and innovative technologies.
Insight Driven Health for U.S. Federal Healthcare Organizations
From innovating patient care at the Veteran’s Administration to developing incentives for higher quality care at the Centers for Medicare & Medicaid Services, U.S. federal health agencies are revolutionizing healthcare in the United States.
Insight Driven Health for U.S. State Healthcare Organizations
The convergence of cost pressures, healthcare reform and technology changes are redefining the landscape for U.S. state healthcare organizations.
Browse all in Health
Skip Footer Links