Accenture Defense Supply Chain Transformation Framework
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8/6/2019 Accenture Defense Supply Chain Transformation Framework
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A Defense SupplyChain TransformationFramework
Results-Focused Initiativeor Maximizing Value to
the Warighterby Jerey Miller and Scott Smith,
Accenture
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This Page:
US Air Force (USAF) Technical Sergeant (TSGT)
Richard Moore, Communications Computer
Systems Operator, 458th Air Expeditionary
Group (AEG), establishes a network irewall list
at Mihail Kogalniceanu Air Base (AB), Romania,
during Operation ENDURING FREEDOM on
March 18, 2003. DoD photo by MSGT Jon
Nicolussi, USAF.
On the Cover:
Marines prepare to attach a sling astened to a
M198 Medium Howitzer onto a U.S. Marine Corps
CH-53E Super Stallion helicopter in Al Asad, Iraq,
on Nov. 29, 2006. The Super Stallion, rom Heavy
Marine Helicopter Squadron 465, 3rd Marine
Aircrat Wing (Forward), will airlit the howitzer
to Barwana, Iraq. DoD photo by Gunnery Sgt.
Michael Q. Retana, U.S. Marine Corps.
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Figure 1: A framework for leveragingpeople and information to transform thedefense supply chain.
While the needs o the warighter
certainly have changed in recent years,
the undamental priorities o supply
chain excellenceimproving service and
reducing cost to servehave not. It is to
these basics that the deense supply chain
must recommit itsel. With some o the
most diverse and expansive supply chains
in the world, deense organizations arehighly dependent upon the respective
perormance o their numerous partners,
many o whom are outside their
immediate control. Increasing supply
chain outreach and emphasizing the
end-to-end synchronization o
inormation can yield incalculable
operational beneitsnot just in dollars
and cents, but also in operational
readiness and mission success.
High perormance through deense
supply chain management begins with
an understanding that technology isjust one o several drivers in supply
chain excellence; equally important are
organizational design o the supply chain
as well as the skills and expertise o the
people running the process.
A Model for High Performance through
Defense Supply Chain Management
This paper presents a transormation
ramework that ocuses on discrete
opportunities to improve the deense sup-
ply chainopportunities to create highly
responsive, agile supply chains that are
people- and inormation-powered and
process-enabled. While we understand thedistinct characteristics o the supply chains
o the individual branches o the military,
the concepts described here have been
built on Accenture's experience helping
clientsranging rom Best Buy to Dell to
the Deense Logistics Agencybuild and
run some o the largest and most eicient
private- and public-sector supply chains
in the world. The undamentals o those
implementations are transerable and pro-
vide a starting point or improvement.
Using this transormation ramework, we
outline ten speciic opportunities to achieve
high perormance across our stages o
the deense supply chain: Assimilate,
Synthesize, Direct and Assess (Figure 1).
A Defense Supply ChainTransformation Framework:Results-Focused Initiatives or Maximizing
Value to the Warighter
by Jerey Miller and Scott Smith, Accenture
Enablers
Outcomes
Assimilate Synthesize Direct Assess
Gather the RightInformation
Process theInformation
Act Upon theInformation
Measure & ManagePerformance
1. Extend thesupply chainwarfighterorganizations
2. Develop a
process-centricstructure
3. Standardizeinformation
4. Practice predictivenot preventativemaintenance
5. Transition theworkforce fromtransaction-grounded toknowledge-empowered
6. Pursue alternatives
to in-house supplychain management
7. Implement Sales& Operations
Planning8. Develop a
"Strategic DecisionInterface"
9. Make performancemeasures integrated,actionable andleading as well
as lagging
10. Emphasize supplychain-widemeasurement
Acquisition ofrelevant informationtied to warfighterreadiness and costto serve
Timely andaccurate analysisof information
Highly-responsive,timely and cost-effective actions
Quantifiableperformancemeasures tied toimproved service,reduced cost andhigher readiness
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Figure 2: Supply chain value levers.
All supply chains are driven by three
basic value levers: capacity, inventory
and inormation (Figure 2). However,
deense supply chains traditionally have
emphasized capacity and inventory.
The value o inormation has not
been unappreciated, but it oten has
been positioned solely as a means to
position capacity and inventory in the
right place at the right time (where is
the parthow many are in stock?
when will it be deliveredhow many
can I store?). Leveraging inormation
to optimize cost to serve has been a
somewhat lagging priority in the eyes
o the military because it runs contrary
to the common perception that more
is better.
But times are changing. Constrained
budgets, inancial accountabilitymandates, public scrutiny o ederal
spending and the evolving nature o
21st century warare have orced the
military to abandon its principles o
mass logistics. Instead, it must ind
more eective uses o inormation to
ensure superior logistics services to
the warighter. Recent deployments
o enterprise resource planning
(ERP) solutions, advanced planning
systems, data warehouses and
sense-and-respond technology have
created overwhelming amounts o
data which, in many cases, have
paralyzed deense supply chains with
inormation overload. Simply put, it
has become more diicult to discern
relevant rom irrelevant inormation,
to standardize inormation to make
it more manageable and to ix the
problem by moving outside traditional
supply chain comort zones.
1. Extend the Supply Chain by Facing
the Warfighter and the Supplier
Acquiring the right inormation beginswith understanding both the needs
o the warighter and the capabilities
o suppliers. Understanding these
needs and capabilities requires an
outward ocus.
AssimilateGather the Right Inormation
Interchangeable
Inormation
Capacity Inventory
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relevant inormation about the
warighter to plan more eectively
and improve service.
The supplier-facing organization
is committed to understanding
and supporting the acquisition and
movement o vendors goods and
services. Key responsibilities include
supply planning, stock positioning,
inventory investment, supply network
design, wholesale/retail visibility and
sourcing/procurement.
Creating these two organizational
entities can be challenging or any
materiel-ocused entity. New and
deeper skill sets are required on both
sides o the equation. Moreover, the
two organizations must be closely
integrated to veriy the processes,technologies and perormance
measures work together to make
proactive, eective supply decisions.
However, the beneits o this structure
can be considerable:
Improved forecast accuracy
through collaboration and greater
understanding of the warfighters
processes and requirements: What
is the operating tempo?what is
the deployment schedule?what
weapons systems are utilized?
what is the state o weapon
system availability? New opportunities for adding
value to the mission: With deeper
understanding o the warighter,
the entity is better positioned to
understand what new services it
can or should oer.
Aligned performance measures:
Leading and lagging metrics can be
divined to measure actual perormance
levels.
Do more with less: With a
better understanding o customerrequirements and improved orecast
accuracy, deense organizations are
able to improve service levels while
simultaneously reducing investments
in saety stock.
Figure 3: Integrating warfighter-facingand supplier-facing organizations.
Culturally, however, the military
tends to organize its supply chains
around materiel. Organizing around
materiel is airly simple with direct
lines o authority over planning,
procurement, distribution and
inances. However, what is lost in
this organizational structure is a
ocus on the warighterand the
mountain o inormation about the
warighter that could be used to
improve supply chain perormance.
Basically, deense supply chains need
to alter their organizational ocus
by creating warighter-acing
and supplier-acing organizations
(Figure 3).
The warfighter-facing
organization is dedicated to
understanding, supporting andengaging the warighter. It orecasts
demand, segments customers by
mission or criticality, provides
consistent levels o service and
continuously seeks and acquires
5
Fulillment
Demand Planning Supply Planning
Sourcing & Procurement
Warighter-FacingOrganization
Supplier-FacingOrganization
Suppliers
Supplier RelationshipManagement
Customer RelationshipManagement
Warighter
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2. Develop a Process-Centric
Infrastructure
Large-scale transormation requires
a proound shit in decision-making
authorityrom historical powerbases to distinct process ownership.
As shown in Figure 4, deense
organizations have historically
organized themselves by agency,
service, geography or competency.
To achieve enterprise success, they
should consider realigning by process
area while concurrently assigning
ownership and accountability across
the traditional, stove-piped areas,
resulting in increased collaboration
and integration across work streams.
Organizing by process area requires
that decisions be made at an enterprise
level and that a new positionprocess
ownerbe established to ensure
that each action aligns with the
organizations overall objectives.
Process owners are the primary
organizational element or promoting
and ensuring supply chain-wide
integration. Acting as decision
authorities or all requirements in
a given process area, their ocus is
on monitoring process perormance,
continuous improvement and clear lineso accountability. Principal process
owner responsibilities include:
Design, monitor and manage the
process.
Promote enterprise integration
to oster collaboration across work
streams and unctions.
Promote uptake of new capabilities.
Promote a shared learning
environment through "communities
o practice" to share ideas and
techniques or improving perormance.
Drive continuous process
improvement.
Establish key performance indicators
(KPIs) to quantiy each process areas
speciic contributions to perormance.
The Deense Logistics Agency
(DLA) is an excellent example o
an organization that successully
underwent a process-centering
transormation. The DLA reorganizedaround distinct process areas,
including order ulillment,
planning, procurement and inancial
management. These areas were
supported by a standardized
technology solution with consistent
training and job deinitions. The
realignment resulted in broader
and deeper supply chain skills, the
creation o enterprise metrics as
strategic perormance measures or
the organization, the elimination
o disparate business practices and
successul integration o business
processes through process ownership.
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Sta Sgts. Scott Straley (let), John Hurley Jr.
(2nd rom let), Mike Schoenly (center) and
Senior Airman Brian Tremblay (right) use a
Universal Ammunition Loader to upload 20 mm
ammunition into an F-16 Fighting Falcon at
Malacky Air Base, Republic o Slovakia, on
June 7, 2001. Straley, Hurley and Tremblay are
attached to the 31st Maintenance Squadron.
Schoenly is attached to the 31st Transportation
Squadron. DoD photo by Sta Sgt. Mitch Fuqua,
U.S. Air Force.
Figure 4: Organizations must shiftdecision-making authority to span theenterprise.
Agency Service Geography Competency
Traditional, Stove-Pipe Process-Centric
Plan
Source
Make
Deliver
Return
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With an extended supply chain that
reaches deeper into customer and
supplier operations, deense supply
chains can easily become swamped
with inormation. Advanced ITcapabilitiesERP, niche solutions,
data warehousesprovide deense
supply chain proessionals with
more inormation than ever beore.
Unortunately, most deense
organizations do not have the ability
now to synthesize huge amounts
o data into useul inormation.
A new emphasis on inormation
standardization, technology-based
analytics and new approaches to skills
development are needed.
3. Standardize Information Across
the Extended Supply Chain
The deense industry is arguably
one o the worlds largest users and
generators o data. This is why it
stands to beneit so heavily rom
increased data standardizationto
make sure inormation about
materials, products, employees,
customers, suppliers, assets, etc.
is current, consistent and accuratewherever it is used inside or
exchanged outside the enterprise.
In many deense entities, a central
corporate repository o standardized
inormation has not yet been realized,
shortchanging their ability to view,
consolidate, share, leverage and
rationalize inormation. Compliance
with external regulations, such as
inancial accountability standards and
inormation assurance, may also be
compromised.
Consider the relationship among
systems, operations, logistics
and transportation commands as
illustrated in Figure 5. Across these
organizations, there are myriad
planning systems, bills o material
(BOMs) and inventory management
systems. Without standardized
inormation, there are numerous
potential instances o communication
breakdowns resulting in lost
economies and missed synergies.
Most regrettable is that all o the
inormation needed usually exists
and is documented somewhere but
not shared. Standardized master
data between system commands,
operational commands, logistics
commands and transportation
commands would solve this problem.
4. Perform Condition-Based
Monitoring
Condition-based monitoring is an
emerging capability or helping
deense supply chains analyze
demand-signal data (Figure 6).
Through the use o advanced
sensor technology, condition-based
monitoring systems capture scores o
data points and transmit these back
to a centralized location. The data
points eed an analytical databasewhose understanding o each piece
o equipments unique characteristics
and shortcomings grows continually.
Those insights make it possible
or a companion application to
develop customized, money-saving
maintenance programs or each
resource type rather than relying on
scheduled maintenance service.
From the perspective o the logistics
provider, acquiring and analyzing
data make it possible to reduce spare
parts-management costs by leveraging
inormation to more accurately
orecast inventories and bundle parts
SynthesizeProcess the Inormation
orders. Condition-based monitoring is
a powerul tool. However, improving
orecast accuracy, reducing saety
stock investments and improving
service levels still depend on well-
integrated processes executed by
supply chain proessionals. Without
these processes and skills, condition-
based monitoring could become
another way to overwhelm deense
supply chains with inormation they
are unable to process.
5. Create a Knowledge-Empowered
Workforce
The vision o integrated computer-to-
computer supply chain synchronization
oten ogs the reality that the catalyst
o high perormance through supply
chain management is still people.
Supply chain transormation initiatives
inevitably involve invasive change with
new processes that require deep supply
chain skills. The workorces o most
deense supply chainscharacterized
by tenured proessionals who possess
enormous knowledge o legacy systems
and processesmay need training
and realignment to meet these new
challenges. For the knowledge-
empowered, inormation-centric supply
chain to thrive, deeper supply chaincompetencies are required. Deense
organizations must irst adopt a new
model or developing an organization
o supply chain experts. As outlined
in Figure 7, this new model begins
by identiying the knowledge, skills
and abilities (KSAs) desired in the
workorce. All training must consider
a KSA end-state and strive or a
ull understanding o current gaps
in workorce competencies. Training
requirements are then mapped to
speciic jobs and a deined career path
or supply chain proessionals.
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Figure 6: The activities (components)of condition-based monitoring.
Figure 5: Achieving standardizeddata integration.
Figure 7: A workforce competency model.
Defne competencies,KSAs and profciencylevels
Conduct traininggap analysis
Develop trainingrequirements plan
Defne positionrequirements
Update personnelinormation
Match trainingto billets
Defne careerpaths
Manage and Communicate
SystemCommand
OperationalCommand
LogisticsCommand
TransportationCommand
Inventory &Order Management
SystemAsset Management
MaintenanceExecution
MaintenanceRequirements
Transportation &Distribution Management
Collect inormationrom severalsystems sensors
Relate the inormationto external inluencingorces (e.g. weatherdata)
Develop apersonalizedempirical model
Associatedeviations withknown problems
Integration withMaintenance & PartsManagement Systems
Non-IntrusiveMonitoring
EarlierWarning
IncreasedVisibility orPlanning
Robust, real-timealerting o impendingproblems
Identiyoperationanomalies
Run anomaliesthrough a diagnosticrules engine
9
Web and e-mailnotiicationchannels
Why can't westandardizeand integratethe data?
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Figure 8: Developing the knowledge-empowered workforce.
Classroom
Computer-basedTraining
On-the-jobTraining
1. Common Job Deinition
2. Skills Assessment
3. Curriculum Map
4. Content Delivery
5. Value Measurement
6. User Shadowing Sessions
1. RILARetail IndustryLeaders Association
2. APICSAssociation orOperations ManagementPreparation
3. ISMInstitute orSupply Management
4. VHACertiicate oAchievement Program
1. eLearning content
2. Classroom content
3. Clientspeciiccertiication programs
CertiicationProgramsSkillTransormation CustomizedPrograms
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Retraining a large workorce with 20
to 30 years o immersion in legacy
business processes and systems is a
tremendous challenge. But ailing to
do so creates even bigger challenges:prolonged and compromised
decision-making processes; higher
costs associated with service and
rework; and perhaps most important,
a general inability to leverage the
massive amounts o inormation that
major technology implementations
have helped acquire.
To address the learning challenge in a
meaningul way, deense organizations
must also adopt a knowledge-
management approach that ocuses
on six key attributes: breadth,
lexibility, relevance, consistency,
aordability and speed. As shown in
Figure 8, the most eective means
o transerring this knowledge is a
blended approach o ormal classroom
training, computer-based training and
on-the-job training across the areas
o skills transormation, certiication
programs and customized training.
One o the biggest reasons aknowledge-empowered workorce is so
eective is that levels o responsibility
are moved down within the chain o
command. Decisions ormerly made
by higher-level sta can be made
just as competently by better-trained
subordinates with a process view and
a stronger command o supply chain
decision-, monitoring- and visibility-
enhancement technologies.
Retraining a largeworkorce with
20 to 30 years oimmersion in legacybusiness processesand systems is atremendous challenge.
1
U.S. Navy Sailors aboard Military Sealit
Command ast combat support ship USNS
Arctic (T-AOE 8) load supplies onto a cargo
hook underneath an MH-60S Seahawk
helicopter during a vertical replenishment
with USS John C. Stennis (9CVN 74) on
Feb. 27, 2007, in the Arabian Sea. The USS
John C. Stennis Carrier Strike Group is on a
scheduled deployment in support o maritime
security operations. U.S. Navy photo by
Mass Communication Specialist Seaman
Josue Leopoldo Escobosa.
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As more and more data are acquired and
processed, logistics agencies must turn
the inormation into action. The two
most important aspects o these actions
are alignment with strategic objectivesand the need or speed and accuracy.
6. Pursue Alternatives to In-House
Supply Chain Management
When examining the capabilities
and challenges associated with the
various supply chain processes, many
deense logistics providers may ind
the time and cost to transorm the
process is too steep. In such cases,
agencies should consider alternative
ways to manage the process.However, the great challenge is
avoiding ragmentation: validating
that each process is optimally
connected with other internal or
external organizations and that well-
DirectAct Upon the Inormation
Figure 9: Instead of directly managing thecontributions of one or several third parties,defense entities can outsource any or allaspects of supply chain management to anintegrated services coordinator.
established links in one area do not
come at the expense o other areas.
Fragmentation can be a problem
even i an entity oloads only one
process, such as transportation or
distribution, to an external provider.
The objectives o the services provider
and its client may conlict, particularly
i the provider is asset-based. A
transportation company, or example,
is not in business to ind the industry's
best rate or its client, but rather it is
in business to apply its best rate or
the client. Resource limitations also
come into play since providers usually
are limited by the breadth o their
own assets and are rarely inclined to
increase capacity by working with
competitors.
In this regard, using an integratedservices coordinator may be a sensible
option to create supply chain-wide syn-
ergies, even among organizations that
only obtain one or a ew supply chain
unctions rom an external provider.
Integrated services coordinators can
be thought o as global, asset-agnostic
entities capable o managing any or
all parts o their clients supply chain.
As shown in Figure 9, these organiza-
tions manage, align and optimize the
activities o multiple third parties
conirming that all parts work together
and that the whole is always greater
than the sum o its parts. These capa-
bilities would be particularly advanta-
geous or transportation management
since deense entities oten encounter
problems managing multiple leets,
capturing volume discounts, optimizing
delivery perormance and maximiz-
ing shipment visibility. Planning and
distribution are other good examples
o where an integrated services coor-
dinator can provide excellent value as
they saeguard against poor orecastaccuracy, excessive inventories, low
productivity, alternating shortages
and sureits o warehouse space, and
constantly evolving distribution net-
work requirements.
OutsourcedProcurement
Outsourced ServiceManagement
OutsourcedProcurement
OutsourcedFulfllment
OutsourcedPlanning
Outsourced InventoryManagement
OutsourcedTransportation
Outsourced ServiceManagement
OutsourcedFulfllment
Organization
OutsourcedPlanning
Outsourced InventoryManagement
OutsourcedTransportation
Organization
Integrated ServicesCoordinator
Versus
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the opportunity to save money on
behal o every client, irrespective o
how many unctions are outsourced.
Unified delivery of supply chain
services: Integrated services coordinators
work across internal and external
organizations in a more consolidated,
holistic way than third party logistics
providers (3PLs). Their mission is to
maximize collaboration among whatever
outsourced unctions are handled directly
and whatever supply chain unctions have
been kept in-house.
Increased agility: Access to a huge
range o technologies and service
capabilities helps integrated services
coordinators respond optimally to
their clients shiting requirements and
sudden changes in supply or demand.
Better service: Integrated services
coordinators leverage the talents o thebest 3PLs to help clients increase product
availability, order accuracy and on-time
delivery percentages. Via an integrated
services coordinator, deense entities have
access to the most advantageous variety
o services rom the most desirable
variety o 3PLseven within a single
unction, such as transportation.
The concept o integrated services
changes not only how deense
organizations consume services,
but also how they procure them,
particularly in the arena o assetmanagement. Traditional asset
management arrangements have
emphasized basic maintenance and
replenishment through perormance-
based logistics (PBL) contracts. As
deense organizations move toward an
integrated services paradigm, they will
increasingly look to service providers
to move beyond providing basic ad
hoc services to providing mission
readiness and rapid regeneration o
irepower. In this light, integratedservice coordinators should provide
not just asset management, but
also capabilities-based liecycle
management (CBLM) services.
Whether an organization chooses
to obtain one or several processes
externally, there are several potential
beneits associated with an integrated
services coordinator:
Improved visibility: Integrated
services coordinators have developed
proprietary tools and processes
that provide specialized views o
interactions across multiple operating
groups, as well as detailed track-and-
trace inormation on shipments.
Better alignment of supply and
demand: Planning and orecasting can
be extremely investment intensiveso
much so that many entities oten must
limit their expenditures. For integrated
services coordinators, planning and
orecasting are core capabilities, so
they have already invested in the
technologies needed to do it right. More predictable and potentially
lower costs: The ability to
amortize services and technology
implementations across multiple clients
gives integrated services coordinators
U.S. Army Sta Sgt. Shawn Smith watches his
Blue Force Tracker while communicating with
others within his convoy during a patrol in
Kirkuk, Iraq, on Nov. 4, 2006. The Blue Force
Tracker gives real-time location o riendly
orces on the battlefeld. Smith is a patrol
leader rom Bravo Company, 2nd Battalion,
35th Inantry Regiment, 25th Inantry Division.
DoD photo by Sta Sgt. Samuel Bendet, U.S.
Air Force.
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14
Demand Supply
New Weapon
System
Introduction
Troop
Deployment
Maintenance
Programs
Customer
Budget Cuts Lead Times
OA and Cash
Constraints
Customer
Service Goals
Stock &
Funding
Policies
Demand Chain ICPs Enterprise
Figure 11: Sales & Operations Planning(S&OP) is the ability to rapidly respondto environmental changes and integrateintelligence from multiple sources into asingle enterprise plan.
Figure 10: The Accenture CBLM Framework
1. Business Strategy or Services
2. Complex Program Integration or Services
3. Organizational Alignment and Change Management
4. Strategic Sourcing and Procurement Transormation
5. Lie Cycle Asset Management
6. Planning and Logistics Integration
7. Service Perormance Technology and Management
8. IT and Business Intelligence Tools
Achieve the targeted levelo readiness or the programat a substantially lower cost
and
Achieve speciicmission-based outcomes
Management
Key BusinessCapabilities
IT
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15
To eectively provide CBLM services,
integrated service coordinators must
be able to support a core set o
capabilities including:
Providing global depot and ield
maintenance activities, including
transportation and logistics.
Assessing value of performance-
based contracts through business case
development.
Managing technical support services,
including technical documentation.
Supporting configuration
management including as-built
and as-maintained management.
Developing, measuring and
reporting upon program metrics.
Actively monitoring and measuring
system/platorm perormance.
Ensuring DoD-mandated levels of
system/platorm uptime. Creating, managing and supporting
a human resource pool to carry out
perormance-based business activities.
Acquiring, tracking and maintaining
government property in support o the
contract.
The capabilities that deense
organizations should look or in their
integrated service coordinators are
summarized in Figure 10.
As they begin to deepen their ties with
integrated service coordinators, deense
organizations must structure their
contracts to capture the perormance
criteria and metrics that correctly align
service coordinators perormance to
the deense organizations targets or
mission and asset readiness.
7. Implement Sales and Operations
Planning
For deense logistics organizations
to support the strategic alignment o
warighter and supplier operations,
they must be able to rapidly respond to
environmental changes and integrate
intelligence rom multiple sources into
a single enterprise plan. As shown in
Figure 11, a common commercially-
adopted process or making this
happento proactively balance demand
with supply constraintsis Sales and
Operations Planning (S&OP). The value
o S&OP varies, depending on the
number o inputs and whether they
take place at the tactical, operational
or strategic level. For example, an
organization might undertake strategic
S&OP during its budgeting process
while executing at the operational level
on a monthly basis. This would allow
the organization to modiy investment
decisions to respond to changes in
demand orecasts.
Warighter-acing and supplier-acing
organizations coupled with S&OP
processes provide the necessary
lexibility to respond more ully to the
needs o the warighter. The requent
results are improved orecast accuracy,
better stock availability, reduced leadtimes, lower inventory levels, aster
reaction to customer requirements
and increased investment lexibility.
Furthermore, this ramework provides
the ability to parlay new warighter
and supplier inormation into
additional opportunities to improve
service. Implementation o S&OP is
typically a low-cost endeavor, with
immediate beneits realized rom the
alignment o adjusted orecasts with
inventory investment.
8. Develop a Strategic Decision
Interface
Supply chain organizations that
embody high perormance use
technology to optimize every aspect
o their services, core processes and
inrastructures. One such technology
with particular potential to help
deense entities act on inormation
is a Strategic Decision Interace.
Essentially, this interace is a scalable,
networked command center that
collects, synthesizes and displays
relevant, targeted inormation. It also
integrates with other networked or
mobile devices. One might liken it to
an executive dashboard oten used in
commercial supply chain management.
Strategic Decision Interace
technology ocuses on compressing
decision cycle times and reducing
staing requirements by improving
collaboration. In eect, it synthesizes
and uses large amounts o data to
make inormation more actionable.
In addition to improved cross-process
and cross-geography collaboration,
such a tool allows decision makers
to re-play past decisions and use
simulation techniques to provide
predictive analysis.
Supply chain organizations also can use
a Strategic Decision Interace to make
true, eects-based assessments by
combining real-time inormation with
planned or virtual inormation. This is
yet another way to quickly translate
logistical awareness into action1
.
1 A demonstration o Strategic
Decision Interace can be accessed at
www.accenture.com/Global/Services/
Accenture_Technology_Labs/Services/
StrategicDecisionInterace.htm
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16
AssessMeasure & Manage Perormance
In some ways, deense organizations
are not much dierent rom other
large-scale enterprises. Both recognize
the importance o establishing and
leveraging perormance metrics andtend to rely on measures that are long
on data and short on standardization
and integration. Also, most large-scale
entities concentrate on lagging as
opposed to leading indicators, limiting
their ability to make proactive, goal-
directed decisions. Lastly, most large-
scale entities tend to only measure
what they think they can control. For
this reason, assessments relating to
the extended supply chain are rarely
made. New approaches to supply
chain-wide measurementassessing
perormancerepresent the inal
critical component o an inormation-
driven deense supply chain.
9. Make Performance Measures
Integrated, Actionable and Leading
as well as Lagging
Deense entities have a airly
strong reputation or perormancemeasurement, yet measurement
problems still exist. One reason is
that deense entities size and scope
oten result in an excess o measures.
By ocusing too much on minutia,
as opposed to higher-level strategic
issues, the quality and viability o
the entire measurement process may
be reduced. As noted earlier, many
entities measure only those activities
they can control within their our
walls. Because o their contractual
relationships with suppliers, agencies
usually have greater control over
supplier perormance than they do
over the demands o the warighters
they support. The result tends to be a
strong ocus on supply issues and less
ocus on orecasting and meeting the
needs o the warighter on the ground.
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17
When too many processes, milestones
and activities are subject to
quantiication, it also becomes diicult
to stay ahead o the gameocusing
on leading indicators that predictproblems, rather than lagging indicators
that reveal problems ater the act. This
is another common problem in military
logistics and the primary reason or the
introduction o integrated KPIs.
Lastly, multiple metrics are only
valuable i they are linked to one
another. In the deense business,
internal processes oten are
measured against each other, but
not according to their contribution
to larger, enterprise-wide goals. Take,
or example, a common measure o
planning eectivenessattainment
to plan. This KPI measures the
alignment o the orecast rom
demand planning, the supply plan
rom supply planning, the purchase
order rom procurement, and the
suppliers delivery perormance based
on quantity and required delivery
date. I there is perect alignment
among all our lower-level measures,
the attainment to plan is achieved.
Failure at any point across the our
measures translates to a ailure tomeet attainment to plan.
10. Emphasize Supply Chain-Wide
Measurement
Using metrics to manage perormance
is a valuable exercise only when the
metrics are used in a process-wide
approach that is linked to strategic
goals. Gauging and managing peror-
mance should be the result o identi-
ying the measures that most heavily
and directly impact cost and service.
These questions may help identiy
what those measures should be:
How does forecast accuracy impact
service and inventory costs?
How do delivery accuracy and
lead times aect service levels and
inventory investments?
What percentage of purchases are
spot buys versus delivery orders
related to long-term contracts?
What is the right sourcing strategy
or the item?
How many shipments require special,
and thus expensive, handling and
expediting? What are the space- and resource-
utilization levels at key storage
acilities?
What is the relationship between
ull-truckload and less-than-truckload
shipments, and how many "dead-
head" miles are logged over a given
timerame?
How many handoffs are required
or a particular item or line? More
handos invariably mean higher costs
and increased margin or error.
As noted earlier, measurement in
deense logistics always comes down
to two things: cost and service. Thus
the simplest and best approach is to
ocus most heavily on measuring the
strategic levers o cost and service.
U.S. Navy Master at Arms Seaman Apprentice
Jon Moore, rom Mobile Security Squadron Three,
scans the ocean during his security watch Nov.
17, 2006, aboard USNS Supply (T-AOE 6), which
is under way in the 5th Fleet area o operations
in support o maritime security operations. U.S.
Navy photo by Mass Communication Specialist
2nd Class Kitt Amaritnant.
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18
Once the right perormance metrics
have been identiied, perormance
targets and organizational
accountability must be established.
Ownership or meeting perormancetargets and achieving perormance
improvement goals should be assigned
to the appropriate organizational
element, customer or supplier
operation. To this end, most deense
organizations have experience
managing to perormance targets,
which are typically based on historic
perormance and improvement
objectives. However, due to the
integrated cross-process nature o
KPIs, a less-amiliar challenge arises
when assigning accountability. Using
the previous example o attainment
to plan, numerous members o the
supply chain have an impact on this
measure (demand planners, supply
planners, buyers, suppliers, etc.). When
assigning perormance accountability,
it is important to irst understand
which organizational element has
the most responsibility or inluence
on the metric. For example, metrics
that impact customer service or
involve customer interaction, such as
delivery and orecast accuracy, should
be assigned to customer operations.Conversely, metrics involving inventory
planning and procurement, such
as turnover levels and saety stock
levels, should be assigned to supplier
operations.
ConclusionThe Role and Value o High
Perormance in Deense Logistics
Many deense supply chains have
launched initiatives to become high
perormance organizationslogistically
superior entities that meet the
needs o the warighter with speed,
eiciency and consistency. However,
many o those initiatives have been
based on the replacement o legacy
applications with new inormation
systems. With so much riding solely
on technology, some eorts are
bound to all short o expectations
because critical, non-system aspects
o the supply chain transormation
are not being ully considered.
New systems are a critical part o
acquiring and managing inormation,
yet understanding and quickly acting
upon the right inormation requires a
broader ocus. This ocus begins with
a supporting organizational structure,
aligned with customers and suppliers,
and tightly integrated with consistent,
enterprise-wide processes. Such an
organization also must be knowledge
empowered to properly synthesize andact upon the larger set o inormation
being acquired. Then the success o
the organization must be quantiiably
judged according to its speed and
accuracy in supporting the warighter,
while simultaneously reducing cost to
serve. It is a daunting but achievable
proposition whose time has come.
New systems are a critical part oacquiring and managing inormation, yetunderstanding and quickly acting upon the
right inormation requires a broader ocus.
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U.S. Navy Sailors salute the ensign aboard
submarine tender USS Frank Cable (AS 40) in
Apra Harbor, Guam, Jan. 1, 2007, ater bringing
it to hal-sta in honor o ormer President
and Navy veteran Gerald R. Ford. U.S. Navy
photo by Mass Communication Specialist
1st Class Jeremy Johnson.
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About Accenture
Accenture is a global management
consulting, technology services and
outsourcing company. Combiningunparalleled experience, comprehensive
capabilities across all industries and
business unctions, and extensive
research on the worlds most
successul companies, Accenture
collaborates with clients to help them
become high-perormance businesses
and governments. With approximately
177,000 people serving clients in more
than 120 countries, the company
generated net revenues o US$23.39
billion or the iscal year endedAug. 31, 2008. Its home page is
www.accenture.com.
About Accenture Defense
Accentures Deense industry group
delivers strategy, operations, IT
and mission services that enable
departments o deense, the
intelligence community and ederal
agencies to achieve high perormance
and support the warighter at
speed. With the help o Accentures
capabilities, worldwide presence and
experience, clients meet mission goals,
mitigate risk and realize cost savings.
Visit www.accenture.com/deense or
more inormation.
Copyright 2009 Accenture
All rights reserved.
Accenture, its logo, and
High Perormance Deliveredare trademarks o Accenture.
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