If you’ve ever waited in line at the DMV or tried to contact the IRS for help with your taxes, you’re no doubt aware that government bureaucracies tend to be inefficient. Well, the same thing holds true in the military.
On the front lines, America’s Army, Navy, Air Force and Marines are unmatched. But behind the front lines stretches a supply chain that can run for hundreds of miles and involve thousands of people. Streamlining the bureaucracy involved in logistics would save the Pentagon money, which could then be reinvested to help the troops.
How much could the military save? A 2009 report from the Aerospace Industries Association estimates that the savings could amount to as much as $32 billion a year across five specific areas by implementing performance-based logistics. This is a system based on forging partnerships between Department of Defense employees and defense industry staff at the military’s logistical centers in the U.S. and abroad.
Area 1: Life Cycle Product Support. Life Cycle Product Support covers logistical activities needed to maintain weapons and equipment already in operation. These include repairs, refurbishments, and modifications and upgrades.
The report identifies 18 military systems in this area where the necessary support work is being performed through public–private partnerships.
Area 2: Management of Commodities. The military’s logistical system is responsible for maintaining access to an enormous list of commodities that are used to perform maintenance and upgrades to weapons and equipment. Performance-based logistics improves the efficiency of the commodities supply network by insuring the rapid delivery of the needed commodities and reducing storage and inventory costs.
Area 3: Mobility Assets and Infrastructure. Commodities are useless if they don’t get to the places where they are needed. In the case of the military, performance-based logistics would copy the best practices of the commercial sector in operating its transportation system to support logistics. Most of the savings in this area would result from optimizing the distribution process.
Area 4: Theater Services. Theater Services support combat and humanitarian missions in the theater of operation. They insure that weapons and matériel to support an operation are always available. They exclude, however, the final step in this delivery process, which is the immediate delivery of weapons and matériel to the personnel that use them directly.
The activities that are covered under this area are the construction and manning of in-theater facilities, such as storage and delivery depots; the operation of these facilities; and the distribution of the weapons and matériel to an intermediate station. The efficiencies are achieved in this area by the pursuit of pre-planning steps with host countries and contractors, most importantly regarding the use of airfields and ports, and heavier reliance on contractors under pre-negotiated contracts.
Area 5: Logistics Information Systems. Any system as far-flung and complex as the military’s logistical system will operate better and more efficiently when it is supported by state-of-the-art information technology. Performance-based logistics demands that the information technology infrastructure to support the logistical system be thoroughly modernized.
Further, the modernization effort must be tied to an effective administration and management structure. This can be achieved by contractors having the authority to undertake development of the applicable information technology systems, with the government contracting for the use of these systems. The government gains efficiencies by paying only for the information technology systems and services it uses, savings that would then be rolled right back into providing things the military really needs.
