DEFENSE .SUPPLY CENTER, COLUMBUSTHE

Mr. James McClaugherty, Deputy Commander, DSCC

“DSCC Today & Tommorow” Agenda

DSCC Today Structure Of Inventory Control Point

• DSCC Tomorrow Improving Customer Relationships

Managing Supplier Relationships

Business System Modernization

Ongoing Organizational Realignment Summary

DLA Today: Balancing Of Two Tasks

Improved Support

To The War Fighter

Implement

Transformation

Inventory Control Point (ICP) Organization

DSCC Today

Defense Supply Center Columbus, OH

Defense Supply Center Richmond, VA

Defense Supply Center Philadelphia, PA

LEAD CENTER: LAND, MARITIME

& MISSILES

LEAD CENTER: TROOP SUPPORT

& GENERAL/INDUSTRIAL SUPPLY

LEAD CENTER: AVIATION

LEAD CENTER:ENERGY

Defense Logistics Agency

Lead Center Concept Defense Energy Support Center

Ft Belvoir, VA

57%

12%

31%

54%35%

11%

DLA Weapon System NSN (Spare Parts) Workload

31%

41%28%

Land Maritime

Aviation

DSCC DSCP DSCR

• 4.9 M Reqs Annually

• 1.6 M NSNs

• $2.3B Sales

• 22,000 Customers

• 4,700 Suppliers

Business Base

FY02 Customer Profile

FMS(4.3%)

210,436Marines

(3.5%)170,877

Coast Guard(0.6%)27,772

Army(49.7%)

2,431,318

Civ Agencies(0.8%)41,050

Oth DoD(0.8%)37,442

Navy(23.5%)

1,149,303

Air Force(16.8%)821,688

Coast Guard(0.5%)$10.6M

FMS(13.3%)$308.7M

Marines(2.6%)$59.4M

Navy(34.7%)$804.6M

Oth DoD(0.7%)$15.4

Air Force(24.1%)$558.5

Civ Agencies(0.5%)$11.4

Army(23.7%)$549.1M

By Sales ($)

Total Dollar Value: $2.3BTotal Requisitions: 4.9 M

01CustomerProfile:kdf:22Oct 01

By Customer Orders

8.018.0

49.3

82.168.5

54.4

86.676.8

13.2

25.1

40.5

31.941.3

68.2

61.3

8.5

18.2

20.5 22.3

35.0

25.5

5.4 5.3 5.0 8.0 10.65.2 5.3 5.0 5.7 6.8 5.91.6 2.1 2.53.3 2.5 3.4

6.0

0

40

80

120

160

200

Enduring Freedom / Iraq Freedom Requisitions by Customer Priority Groups

Blue = Highest Priority

1.1M Requisitions / $486.5M

CommanderDeputy Cmdr CommanderDeputy Cmdr

SmallBusiness

Readiness& Bus. Ops

Operations Support

CommoditiesCommodities Land Aerospace Maritime(F)

Maritime(F)

Procurement Comptroller

Chief OfStaff

Internal Review

Customer Advocacy

CommandSupport

CSO-Columbus

PublicAffairs

Safety EEO

Organizational Structure

Office of Counsel

Maritime(Q)

Maritime(Q)

CorporateInformation

Emergency Services

Installation Services

Readiness & Business Operations

Commodities Land Aerospace MaritimeActive Devices Unit

Electrical Devices Unit

Passive Devices Unit

Commodities Corporate Unit

Ground Transport Combat Vehicles Engineering Spt Readiness Weapon Sys Support

Tailored Support Unit

Transports, Bombers & Helicopters

Fighters & Trainers

Readiness

Tailored Support Unit

Surface Combatant

Subsurface Small Craft

Readiness

Tailored Support Unit

Weapon System Support Doctrine / Organization

Weapon System Vice Item Focused

Five Weapon System Groups: Land,

Maritime (Q/F), Aerospace, Electronics

14 Weapon System Support Managers (WSSMs)

One Face to the Maritime, Land & Missile Customer!

Different Strategy

Federal Supply Class vs. Weapon

System Face To Industry vs. Face To Customer

Multifunctional Teams Managing Federal Supply Classes (e.g. Connectors)

Commodities Group

DLA’s “M Sisters”

Business Systems Modernization (BSM)

Customer Relationship Management (CRM)

Supplier Relationship Management (SRM)

DSCC TOMMOROW

Customer Relationship Management

Our Reason For Being

Weapon Systems Support Management

Weapon Systems Supported

Total Land Weapon Systems 551

HEMTT M1 TANK AAV

M88A1 PLS

HET AVENGER

M9 ACE

WOLVERINE

Readiness Officer

Customer Planning Div.

Operational Force CellGroup – Army

Operational Force Cell Group – USMC

Industrial Cell Group – USMC

Land Other Cell

M9 ACE (A) SEE (A), ETC.

HMMWV (A/M) , ASV/HMT (A), STRYKER (A), FMTV (A)

HET (A), PLS (A), ROWPU(A/M), HEMTT (A), LVS (M), HTV (A/M)

M1 (A/M), M88 (A/M)

AAV (M), LAV (M), AAAV (M), ETC.

Patriot (A), TOW (A/M), ETC.

M198 (A/M), M109 (A), FAASV (A), M155 (A), S. ARMS(A/M)

Eng Spt Equip

TAC Veh I

Grd Cbt I

TAC Veh II

Grd Cbt II

Grd Cbt III

Field Arty

BFVS (A), M113 (A)

Air Def Missile

LAND CUSTOMER OPERATIONS PROPOSED ORGANIZATIONAL STRUCTURE

TBD

Customer Support Div.

Call Center

Customer Facing Div.

Industrial Cell Group – Army

CustomerAnalysts

Cell

Director Customer Ops

Readiness Officer

Customer Planning Div.

MARITIME CUSTOMER OPERATIONS PROPOSED ORGANIZATIONAL STRUCTURE

Customer Support Div.

Shipyard Cell

Carrier/Surface Cell

Submarine Cell

Trident Cell

Army/Navy FMS Cell

Other Navy Cell

02N (SWS)21N (NRP) 23N (TRID)

82N (ALRE) EXN (SSN 688) EZN (TICON) JAN (NIMITZ)

JDN (ARL BRKE) JGN (SEAWLF)

JUN (OSPY MHC) JXN (AVENG MHC)

YJN (SSN 774) YNN (ANTI TERR /

FORC PROTEC)

Maritime Sub IPT

MaritimeSurface IPT

ElectronicsIPT

Aerospace IPT

C & E IPT

CustomerAnalysts

Cell

Customer Facing Div.

Director Customer Ops

Call Center

Rel

atio

nsh

ip G

row

th

No Relationship

Source: LMI Research.

Partnering Relationship

Personal Relationship

Transactional Relationship

New Relationship

Multiple Levels of Customer Relationships

Now

Future

Supplier Relationship Management

588,421 Award Actions 99.7% Award Actions Under

$100,000 Competitive Solicitations

87.3% Of Dollars 87.5% Of Actions

DLA Recognized As Top Performing Major Defense Agency For FY2002

Workload Stats – FY02

DSCC Products Procured Most Active Past 12 Months

Values, Nonpowered (FSC4820) = $108.4 Mil Fittings & Specialties (FSC4730) = $98.8 Mil Misc. Power Transmission Equipment (FSC3040) = $88.1 Mil Switches = (FSC5930) $78.1 Mil Hose & Tubing, Flexible (FSC4720) = $71.0 Mil Vehicle Brake, Steer Axle, Wheel & Track Parts

(FSC2530) = $67.7 Mil Pipe & Tube = (FSC4710) $56.2 Mil Values, Powered (FSC4810) = $55.1 Mil Vehicle Furniture & Accessories (FSC2540) = $52.5 Mil

Note: Some Other Very Active Product Groups = Gun Parts, Hand Pumps, Gears, Connectors, Other Electronic Components

Rel

atio

nsh

ip G

row

th

No Relationship

Source: LMI Research.

Partnering Relationship

Personal Relationship

Transactional Relationship

New Relationship

Multiple Levels of Supplier Relationships

Now

Future

Business Vision Business Vision — ”A Value Added Broker of — ”A Value Added Broker of Suppliers for Materials and Services”Suppliers for Materials and Services”

Business Vision Business Vision — ”A Value Added Broker of — ”A Value Added Broker of Suppliers for Materials and Services”Suppliers for Materials and Services”

Buy commercial supply chains where they exist

Build virtual chains where the pieces exist

Retool acquisitions consistent with the vendor base

Integrate organic chain when it must be used

From ToReliance on inventoriesReliance on inventories Reliance on IndustryReliance on IndustryManagement of partsManagement of parts Management of Management of

Relationships Relationships Managing processesManaging processes Integrating supplyIntegrating supply

chainschainsMaintain a Balance

in Socioeconomic

Programs

Maintain a Balance

in Socioeconomic

Programs Utilize

CommercialSector Experts

UtilizeCommercial

Sector Experts

Targets of OpportunityTargets of Opportunity

Strategic Materiel Sourcing Strategic Supplier Alliance

Items representing

largest business drivers

Vendors representing

largest business base

-- Demand/spend-- Readiness factors-- BSM concept demo

-- Large annual sales-- Multiple customer support requirements-- Strategic partnering

Strategic Materiel Sourcing DLA’s Item Grouping Tool

StandardLong Term Contracts

CorporateContract

Prime VendorVirtual Prime

Vendor

Strategic Supplier Alliances

310KCore

Strategic Materiel Sourcing Groups Items for Placement on ContractStrategic Materiel Sourcing Groups Items for Placement on Contract

551,000 Core Items

DEMAND/SPEND2% of items with 80% of sales

READINESS FACTORSSurge & sustainment items, Not

Mission Capable drivers and Weapon System Identifier Code & critical items with high Production

Lead Time

0

10000

20000

30000

40000

50000

60000

70000

Oct-0

0

Dec-0

0

Feb-0

1

Apr-01

Jun-0

1

Aug-01

Oct-0

1

Dec-0

1

Feb-0

2

Apr-02

Jun-0

2

Aug-02

Oct-0

2

Dec-0

2

Feb-0

3

Apr-03

Nu

mb

er o

f A

war

ds

# of Awards (Automated + Manual)

Manual11,680(22%)

Automated42,489(78%)

Apr 03

Automated Award Actions

Business System Modernization (BSM)

S

U

P

P

L

I

E

R

S

S

U

P

P

L

I

E

R

S

C

U

S

T

O

M

E

R

S

C

U

S

T

O

M

E

R

S

Aviation

Land

Maritime

IntegratedCustomerTeams

IntegratedSupplier Teams

We Know How To Buy !!

SAP

Manu

DPACS

This Is New Stuff For Us

“BSM = Helping Us To Better Manage Our Business”

Aviation

Land

Maritime

Troop/Gen Troop/Gen

DSCC Organizational Realignment

DSCC Organizational Realignment

Standard Organization Structure

Customer Operations

Customer Facing

Readiness and ICT Support

Supplier Facing

Supply Support

Supplier Relationship Management

Supplier Operations

Supply Chain

CUSTOMER

SUPPLIER

IOC Requirements/Blueprint

FOC Requirements/Blueprint

Design/Build

Release 1 Testing and Training

Release 2 Planning

Roll Out Plan

January 2001

Spring 2001

2001-02

Implement Release 1

SC 025 6/17/02

We are here We are hereDesign , Build, Test Release 2

100% Systems Capability

2002

Phased Roll-Out

FOCJan 2006

FOCJan 2006

2003

Spring 2004

2002

Summer/Winter 2001

Summer 2004

Summary

Today: Weapon System & Federal Supply Class Focus Case For Change – Single Up Organizational Alignment Across Enterprise

Tomorrow: Comprehensive Supply Chain Management Collaborative Partnering With Key/Major Suppliers

and Customers

Improved Support To War Fighter!!