The key to increasing combat power is reducing waste, sourcing locally, increasing supply chain efficiency—in short, making all Army assets count
By MAJ Linda C. Wade, CPT Adam G. Bradford,
CPT Timothy P. Gibbons and CPT Nathan D. Platz
The Army Logistics Innovation Agency and Department of the Army G–4 chartered the MG James Wright MBA Fellowship Program at the College of William and Mary’s Mason School of Business to research supply chain optimization for remote locations. The intent was to garner insights from civilian organizations with the objective of improving Army sustainment.
The study focused on sustainment in areas with minimal or no local infrastructure or supply sources in environments similar to inland central Africa and isolated Pacific islands.
The comprehensive study of commercial supply chain innovations revealed best practices that the Army should adopt to better support combat operations in the most remote areas on earth. The recommendations focused on accomplishing these six improvements:
- Reduce packaging waste.
- Increase use of local and renewable resources.
- Employ regional logistics experts.
- Increase the commonality of parts.
- Improve logistics communications systems.
- Generate operational power efficiently.
Implementing these six recommendations would increase combat power by achieving a smaller footprint, greater use of assets, reduced inventory, simplified logistics and increased operational flexibility. All six recommendations have been proven to reduce costs for commercial companies.
The Army can learn from initiatives in the private sector to reduce packaging waste. Wal-Mart Stores Inc., for example, decided that the punt, or dimple, at the bottom of a bottle of wine is wasteful. The chain worked closely with its supplier to redesign the Oak Leaf store-brand wine bottles and reduce the punt, resulting in a shorter and lighter bottle. This small change reaped big cost savings in glass consumption, packaging materials and transportation and reduced Wal-Mart’s annual shipping requirement by 280 trucks.
Likewise, Freeport-McMoRan Inc., one of the top mining companies in the world, worked closely with a supplier to completely redesign its packaging for cobalt hydroxide. The new design resulted in a larger, square-shaped product bag that was more rigid. The new design fits the exact dimensions of the company’s cargo trucks and has doubled the amount of material that can be shipped in one truck. The rigid bag cost $2 more but doubled the transportation network’s efficiency. The new design also made the packing process at the mine more efficient.
For the Army, an initiative to reduce or redesign packaging would have a significant effect on combat operations. Inefficient packaging results in more trucks than necessary on the road, poor use of air delivery assets and inefficient use of storage space. Improved packaging would decrease the exposure of vulnerable assets along the supply chain and improve air and ground asset utilization.
Most packaging materials used for food, water, ammunition and repair parts become a solid-waste burden during combat operations; waste must be disposed of for tactical, political and sanitary reasons. In remote areas, burning is the common method for disposal, but that can lead to health problems for Soldiers. Removing unnecessary packaging does not go far enough: Packaging should be designed to burn cleanly to generate power.
A single case of Meals, Ready-to-Eat (MREs) is a great example of poor packaging. Not only does the cardboard case create solid waste, but the individual MRE package design leads to unused space within a case. This increases the cost of packaging and printing and creates waste along the supply chain as these cases move on ships, vehicles and aircraft.
Smaller, lighter packaging offers significant benefits to Soldiers who receive resupply by containerized delivery systems on air-only combat outposts. The U.S. Army Natick Soldier Systems Center has developed improved packaging for the MRE, pending DOD approval. Natick has also considered designing dual-purpose packaging to create more value for Soldiers. For example, an MRE package could be used as a sandbag, a field-expedient latrine or a camouflage net case.
The improved packaging initiative should extend to how the Army awards contracts to suppliers. For example, awarding contracts only to suppliers that could comply with efficient packaging standards, including packaging that is the minimum required, lighter, dual-purpose and clean-burning, would put American ingenuity to work in developing smart solutions to packaging challenges.
LOCAL AND RENEWABLE RESOURCES
Freeport-McMoRan, which operates mines in remote areas of Central Africa, maximizes local and renewable resources to reduce its logistics resupply requirement, increase its operational effect and maximize its profits. Methods employed include digging wells, partnering to refurbish a hydroelectric plant and providing equipment and training to create local sourcing options. Each of these methods reduces the distribution resources required to sustain operations at remote sites, freeing up assets and money to support core operations.
The Army can mirror this approach and drastically increase combat power while reducing support requirements by using local and renewable resources. Every dollar saved in the supply chain is another dollar that can be spent on combat power.
When Freeport-McMoRan is in a remote area, its water requirements are similar to those of an Army forward operating base (FOB) in Afghanistan. Instead of shipping bottled water to the remote site, Freeport-McMoRan constructs a freshwater well, which supplies the site and the local village. The tactical benefits of a well are fourfold: reducing resupply convoys, freeing up assets for combat missions, strengthening relationships with the local community and increasing funding for combat power. In 2008, 20 percent of all materiel sent by convoy in Iraq and Afghanistan was related to water. A freshwater well to support a remote FOB would eliminate a significant number of resupply convoys and the helicopter air support they often require.
Establishing good relationships with the local population is critical to long-term security in any operation. A freshwater well that supplies water to the local village as well as the FOB would establish an enduring relationship. Funding could be established to pay the locals for the water at a far lower cost than for transporting bottled water. This would strengthen the local economy, support counterinsurgency operations and reduce logistics support requirements. Using local resources to provide water also would lessen the requirement for support personnel on the FOB, which would increase combat personnel and combat power.
Freeport-McMoRan requires essential buildings for their mines in central Africa to be made of brick, which is heavy and expensive to move. Instead of transporting bricks, Freeport-McMoRan transported the equipment to make bricks into the remote area and trained the locals to make them, then purchased the bricks from the locals. The Army also used this method in 2007 during Operation Iraqi Freedom when it needed mass quantities of cement barriers to cordon off areas for the Iraqi presidential election. Transporting cement barriers into Iraq was not practical, so the Army procured locally produced barriers.
Procuring materials locally might also be more reliable. A 2011 report by the Government Accountability Office (GAO), the auditing agency for Congress, stated that “DOD has not always met delivery standards and time lines for shipments to major logistics bases in Afghanistan … due in large part to the various difficulties in transporting cargo on surface routes through neighboring countries and inside Afghanistan.”
When moving into a remote location, one of the first requirements is Class IV construction materials. Soldiers need them to improve fighting positions, but they are bulky and heavy to move. The Army’s current solution is to procure Class IV materials at home station and transport them to the forward location. This is expensive and time-consuming, and takes up valuable transportation assets needed for other critical items. Locally procuring building materials would alleviate that requirement, increase the timeliness of arrival and improve relations with the local population.
REGIONAL LOGISTICS EXPERTS
Army logisticians face significant challenges in navigating cultural boundaries and bureaucratic processes while resupplying troops in the field. Civilian corporations face these challenges every day, but they have logistics experts working with government officials, learning the bureaucracy and adjusting their systems to provide seamless support.
Combatant commands are charged with contingency planning, but commands often lack the continuity and resources required for a deep understanding of regional challenges. The Army requires a team of professionals dedicated to making contacts with local support options, navigating bureaucracy and learning from partnerships. Local support can free logistics and combat assets. Contracting local support can provide a tactical advantage. Regional experts can focus on initiatives similar to those of their civilian counterparts in the area. They can serve on the ground to develop partnerships that will reduce the strain on the distribution network and free up scarce resources.
Cultural boundaries, regulations, policy and hostility are challenges to supporting remote locations. The reliability and consistency of shipments decrease with every border crossing. National borders are the most obvious challenges, but tribal and cultural boundaries also exist. Regional experts can gain firsthand knowledge of each nation’s requirements, understand the cultural landscape and calculate the impact on distribution networks throughout the region. The most efficient main supply route will often depend on the cultural landscape rather than distance and infrastructure.
It’s not practical for the Army to conduct mock operations in remote locations to learn these lessons, but it’s entirely feasible that a team of regional experts could partner with civilian corporations and agencies to gain invaluable insight before an operation.
The U.S. Agency for International Development funds an economic development project across Africa with the intent of reducing barriers to trade. The Trade Hub program understands how to move across borders, and it is actively campaigning to reduce border delays. The East Africa Trade Hub program has reduced border crossing documentation by 10 percent, established main trade routes and has an intimate knowledge of trade requirements. The Army should seek to benefit from this effort; regional experts would be the catalyst to ensure that the information is shared.
COMMON PLATFORMS AND PARTS
Ford Motor Co. in 2011 announced a global initiative to reduce its number of vehicle platforms from 15 to five. This “economies of scale” initiative led to cost savings in engineering time, parts and service and in tooling and machinery. In 2014, Subaru announced a new global platform for its vehicles. The initiative promises to cut unit costs by 20 percent by 2020 through “more efficient vehicle designs, standardized platforms and leaner manufacturing processes.”
Freeport-McMoRan purchased 150 of its own cargo trucks to move supplies on the supply route where it experienced the most challenges and incurred the highest freight costs. Vendors wanted to sell the company three different brands of truck; instead, it procured 150 of the same trucks and 200 of the same trailers. This reduced the complexity of the supply chain of parts, storage of parts and lubricants, operator training and mechanic training. It also simplified communication with the manufacturer for maintenance expertise or warranty claims.
As the Army moves forward in procuring the newly designed Joint Light Tactical Vehicle (JLTV), it has wisely insisted on 90 percent commonality of parts for the JLTV family of vehicles. This is a tremendous step in the right direction, but the Army needs to source vehicles with common parts between families of vehicles. The goal should be commonality within the entire fleet of Army vehicles, not just the JLTV family. The road toward that level of commonality is long, but the benefits would be worth it.
A light cargo truck, gun truck and forklift could all share the same parts. If every vehicle had the same tires, brake system, lights, battery and seat belt clips, the fleet would be ready for the most austere and logistically challenging locations on earth. Embracing a more robust common platform initiative for vehicles can help the Army reduce the logistics burden of parts, storage, transportation, operator training, mechanical expertise and manufacturer support.
LOGISTICS COMMUNICATION SYSTEMS
In surveys conducted for this study, both Army professionals and civilian agencies listed communication as the leading cause of logistics problems that occur while resupplying remote locations and during operations in general. The Army is often inefficient in supply distribution because of a lack of simple communication platforms that can accurately forecast the needs of those on the front lines. These platforms include in-transit visibility (ITV), inventory management and the collection of historical data.
ITV is designed to provide near-real-time status on the movement of materials from supplier to user. DOD defines ITV as “the ability to track the identity, status and location of DOD units and nonunit cargo (excluding bulk petroleum, oils and lubricants) and passengers; patients; and personal property from origin to consignee or destination across the range of military operations.”
The Army uses this capability poorly; it does not adequately track the distribution of all classes of supply to remote locations. The Army’s ITV scope and platform must be updated in order to become more efficient in resupply operations. Providing decision-makers with effective ITV systems will allow for improved inventory management. The Army’s current inventory management system is not synchronized in a manner that allows leaders at higher echelons to see the total logistics picture. According to a 2012 GAO report, the Army has $8.4 billion worth of excess inventory.
Wal-Mart Stores Inc. and Caterpillar Inc., a global leader in mining and construction equipment, use advanced scanning mechanisms to track items from supplier to point of sale in real time. Wal-Mart cashiers update the company’s elaborate tracking system each time they scan customers’ purchases at checkout, or point of consumption. To better manage resupply missions and resupply to remote locations, the Army should research and make efforts to embrace technology that supports superior ITV and inventory management. Scanning to track all classes of supply to the point of consumption would significantly improve the Army’s ability to manage inventory.
Companies are also more successful when they use collaborative forecasting and foster relationships with their suppliers. Companies in the supply industry use vendors to manage inventory, sharing demand data with suppliers to enable better forecasting. Whenever it is possible and not tactically, operationally or strategically detrimental, the Army should have suppliers manage and maintain inventory to simplify the supply chain and shorten lead time on deliveries.
The lack of a simple, dependable and accurate ITV platform, combined with inadequate inventory management, results in historical data being lost and underused in forecasting supply operations. With respect to logistics, the Army collects data, uses the information momentarily and then dumps it. The Army’s scanning systems do not have the capability to archive historical data for easy access by leaders and logistics professionals in the future. For example, it would be extremely difficult for the logistics officer in the 2nd Brigade Combat Team, 101st Airborne Division to retrieve the number of tires or the amount of fuel distributed to one of the brigade’s maneuver battalions while in Mahmudiyah, Iraq, in 2005.
The Army needs a simple, Web-based, customizable system that collects historical data by location, unit and class of supply. This data would be invaluable for forecasting the requirements of units in all locations, but especially in remote locations. Keeping such data would also allow units to simulate demands in the supply chain during training events. This would increase accuracy in forecasting and result in more efficient supply chains and, ultimately, an increase in combat power. Caterpillar cited forecasting as its biggest competitive advantage.
The Army needs to move in the direction of civilian agencies and improve communication systems in order to capture and use data to improve the logistics network.
Freeport-McMoRan has instituted systems at its remote mining sites to turn waste into energy, which reduces the fuel needed, saves money and reduces the strain on the distribution network. The systems also provide the company with a responsible and safe manner in which to dispose of waste through the use of incinerators that cleanly burn used oil to produce energy. The Army can adopt this method to reduce the demand for resources at remote locations and improve combat power. In 2007, 50 percent of all Army convoys were dedicated to the transportation of fuel. Reducing the amount of fuel required to sustain operations would result in cost savings, a more efficient supply chain, increased asset utilization, better operational flexibility and greater combat power.
The Army has operated many combat outposts in Iraq and Afghanistan over more than a decade of war, most located in remote areas next to small villages or town centers. Generators for operational power are mission-essential and are responsible for approximately 40 percent of remote base fuel consumption. Given the small quarters inside the combat outpost, efficient waste management is critical to both the health of the Soldiers on the post and the relationship with the local population.
Waste is collected in one location at these sites and burned, often with serious and lasting negative health consequences. Implementing a modular waste-to-energy incinerator would offer the Army a solution to both of these issues, enabling it to provide energy to remote locations just by burning trash. Incinerators have been shown to produce fewer air particulates than open-burn pits. Waste-to-energy incinerators at remote locations would not only reduce the sites’ logistics requirements and increase their operational flexibility but would also be safer for Soldiers.
Another problem is generator use. The Army is extremely inefficient in how it employs and operates them, and the consequences greatly hinder combat power. At Camp Leatherneck, a remote base in southern Afghanistan, the 5 megawatts (MW) of demand is met by 19 MW of capacity, with 196 generators running at 30 percent capacity and consuming 15,431 gallons of fuel per day. Operating generators at 30 percent capacity results in “wet stacking,” which occurs when a generator is run with a minimal load, causing the generator to use fuel more quickly and burn oil. It causes unnecessary wear and tear on the equipment, leading to more maintenance.
Fluor Corp., a major defense contractor, highlighted wet stacking as a major focus in striving to improve remote logistics support. Fluor’s research showed that running the required number of generators at an 80 percent load factor would mean sending 2,000 fewer fuel tankers per year to one FOB, reducing the number of convoys required, which improves combat power and saves lives. This practice is not more widespread in the Army because the Army lacks the appropriate command emphasis and does not properly deploy knowledgeable Soldiers to enforce how generators should be operated.
The Chairman of the Joint Chiefs of Staff, GEN Martin E. Dempsey, recently stated that “our force will be smaller, so it must be more agile, more lethal and postured to project power wherever needed.” The path to achieve a more agile, lethal force capable of projecting power anywhere, anytime lies in creating logistics efficiencies.
Through the six supply chain efficiencies identified in research conducted through the MG James Wright MBA Fellowship Program, the Army will be able to decrease waste and delivery times, increase accuracy and asset utilization, and free up valuable funding that can be applied to increasing combat power.
This article first appeared in the March–April 2014 issue of Army Sustainment magazine, at http://www.alu.army.mil/alog/currentissue.html.
MAJ LINDA C. WADE is a member of the G–8 Army staff at the Pentagon. She holds an MBA from the College of William and Mary, an M.A. in procurement and acquisition management and a professional graduate certificate in government contracting from Webster University, and a B.A. in economics from the United States Military Academy at West Point.
CPT ADAM G. BRADFORD is a special assistant in the Office of the Chief of Staff of the Army. He holds an MBA from the College of William and Mary and a B.A. in business administration from the University of Arkansas.
CPT TIMOTHY P. GIBBONS serves at the Combined Arms Support Command, Fort Lee, VA. He holds an MBA from the College of William and Mary and a B.A. in enterprise management technology from the University of Scranton.
CPT NATHAN D. PLATZ serves in the G–4, I Corps, Joint Base Lewis-McChord , WA. He holds an MBA from the College of William and Mary and a B.A.in computer science from Missouri State University.
This article was originally published in the April – June 2015 issue of Army AL&T magazine.