United States Defense Logistics Agency: Supply Chain Management

America's Defense Logistics Agency (DLA) provides the Army, Navy, Air Force, Marine Corps, other federal agencies and joint and allied forces with logistics, acquisition and technical services.

DLA sources and provides nearly 100 percent of the consumable items America's military forces need to operate—from food, fuel and energy, to uniforms, medical supplies, and construction and barrier equipment.

DLA wanted to introduce new capabilities to enhance its performance, yet existing IT systems were antiquated, costly to maintain and difficult to update. Furthermore, there were challenges on the management front.

Operations were location-centric and stovepipe. The organization needed to move from a legacy operating model focused on managing materiel, to one focused on managing customers and suppliers to better meet warfighter needs.

DLA looked to Accenture, who have worked in Aerospace and Defense for over 30 years, for help in transforming supply chain processes and identifying the key personnel and skills needed to support the journey to high performance.

The DLA Business Systems Modernization project has delivered a host of new capabilities to DLA under an innovative supply chain operating model. As a first step in the $660 million, six-year project, Accenture helped replace two major legacy systems, the 35-year-old Standard Automated Materiel Management System (SAMMS) and Defense Integrated Subsistence Management System (DISMS), and their associated extension systems.

The team also sought to incorporate best defense logistics practices via commercial off-the-shelf tools. These solutions have enabled supply chain collaboration with DLA's customers and suppliers using a Web-based trading exchange to dramatically increase the responsiveness of DLA's supply chain and reduce DLA's logistics operating costs.

The modernization effort also has enabled improved capabilities, including:

• Supply and demand planning.
• Retail integration.
• Inventory policy optimization.
• Enterprise operational accounting.
  
  

The new systems and processes implemented have enabled DLA to be financially compliant with federal statutes. Accenture supported DLA in aligning its workforce with the overall business strategy by implementing a comprehensive change management, organization alignment and knowledge transfer and training strategy.

The organizational alignment included the design and implementation of jobs, teams and organization structures for DLA to accomplish its goals with the reengineered business processes and the new systems. Accenture also helped perform a complete organizational redesign of DLA’s supply centers, including reporting structures, to standardize them across the supply centers and staff the new organization by mapping DLA personnel to their new role.

Accenture and DLA proactively managed the effects of the change on employees, customers and suppliers by applying communication and sponsorship strategies, realigning the organization and jobs to the new processes, and developing a tailored approach to training and transitioning.

Accenture drew on its cross-industry supply chain expertise and experience in the Aerospace and Defense sector to bring best practices and all of the required commercial and technical skills required to successfully implement the Business Systems Modernization (BSM) program and deliver results that included:

• Created, in just two months, an enterprise-wide business architecture and blueprint with common corporate processes across the entire organization.
  
  
• Achieved Federal Financial Management Compliance (FFMIA).
  
  
• Accomplished successful rollout to more than 4,400 users.
  
  
• Achieved 99.7 percent system availability—single ERP instance.
  
  
• Achieved $72 million in cost savings over legacy systems.
  
  
• Provided 100 percent supply chain interoperability with services.
  
  
• Reduced Logistics Response Time (21 days to 15 days).
  
  
• Reduced order status notification (over 24 hours to 4 hours).
  
  
• Achieved $180 million in cost avoidance by reductions in forecasts.
  
  
• Delivered ground-breaking changes in operating model with Implemented Sales and Operations Planning to optimize service and cost.
  
  

At project completion, BSM incorporated up to 7,500 users and more than 5.2 million items. The agency has also gained total asset visibility, accurate mapping of assets against liabilities, interoperability and horizontal integration that reinforce the decision-support process. The final result is an integrated supply chain solution that enables DLA to achieve new levels of defense logistics service and support, and ultimately, high performance.

Accenture demonstrated its commitment to DLA’s successful transformation through a 100-percent incentive-based contract tied to achievement of DLA goals. Accenture committed highly experienced key personnel with a demonstrated history of successful delivery on DLA-scale logistics business enterprise transformation engagements. Furthermore, Accenture delivered nearly 100 percent of the performance requirements on time and at the agreed-upon price.