provides better value and supply chain performance by establishing relationships with sole-source suppliers to create open dialogue and synergy. Relationship strate- gies may differ depending on the supplier; however, common components include contracting (number of contracts and key terms), logistics (e.g., lead times and delivery issues), and information flows (creating appropriate communications channels). Ultimately, SS/SRM promises to lower the cost of material, reduce pro- duction lead times and improve product support to the warfighter.


AMC is developing the SS/SRM pro- gram to span various Army secondary part suppliers as opportunities arise. It is imperative that we identify opportu- nities for participation from across the AMC enterprise of logistics centers, and institutionalize the program as a standard business practice. Previously, AMC was not organized for enterprise coordination with suppliers, and collaborating across logistics centers (e.g.,


through enter-


prise contracts) rarely occurred. AMC overcame this challenge by creating a representative governance structure— including leadership from each of the logistics centers, HQ, AMC and U.S. Army Contracting Command—to guide SS/SRM activity.


SUPPLY CHAIN METRICS Metrics are essential to performance improvement and thus to the success of any supply chain program. We get what we measure. AMC also faces an increas- ingly complicated challenge of meeting its mission requirements in a fiscally con- strained environment. LMP was the first step in linking the data used to measure supply chain processes


into one sys-


tem. However, the logistics centers were still reporting nonstandardized metrics in manually intensive processes that were organizationally and systemically


FIGURE 2


DATA BOARD


A dashboard system developed by AMC’s Logistics Support Activity (LOGSA) for metrics analysis produced this example using notional data. (SOURCE: LOGSA)


isolated. Tese obstacles hindered the centers’ ability to report a true, timely and actionable picture of secondary item supply chain performance.


Data analysis on parts of the supply chain was available; however,


it came


from different commands with inconsis- tent methods of data extraction, sources and analysis. Creating and implement- ing a single solution for our supply chain metrics allows for a consistent reporting platform for determining supply chain issues. We also needed a governance struc- ture to monitor those metrics and provide actionable responses to the data in order to be proactive instead of reactive.


AMC has metrics to assess performance of each transformation process and of the supply chain itself. What we have measured since implementing S&OP in March 2013 shows that our endeavors


have had a positive impact on our sup- ply chain. Te number of spare parts put on back order is down from $551 million to $458 million, a difference of $92.9 million or 17 percent. Inventory is down from $22 billion to $19.6 bil- lion, an 11 percent reduction. In March 2013, we were over-forecasting by $1.9 million. We have increased our forecast accuracy by 29 percent, which means a cost avoidance of $1 billion—a signifi- cant accomplishment for item managers, given the extremely unpredictable indus- try in which we operate.


Figure 2 illustrates a dashboard system, with notional data, developed by AMC’s Logistics Support Activity for metrics analysis.


CONCLUSION AMC’s Supply Chain Transforma- tion Team recently received the 2013


ASC.ARMY.MIL 37


LOGISTICS


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