Building Dual-Use Supply Chain Management Capabilities - Experiences to Date of System Integrators, Original Equipment Manufacturers and Third Party Logistics Firms, DTD Nov 08

According to its executive summary, “this Report, commissioned by the Center for Public Policy & Private Enterprise and Lockheed Martin, defines how major corporations along the DoD supply chain are re-positioning themselves to be more effective and efficient in services delivery. These actors are leveraging new technologies and management practices to develop more standardized supply chain platforms that can provide better Performance Based Logistics (PBL) & Systems Lifecycle Performance Support to DoD; and can minimize threats of disruption. We call these more standardized supply chain management approaches “Dual Use Supply Chain Management”; and we suggest that DoD can gain the benefits of scale economies and industry-supported innovations from these developments.  Specifically, the report tracks how Defense System Integrators are taking up supply chain portal technology and partnerships with third party logistics providers in order to meet the challenges of DoD’s evolving approach to supporting existing weapon systems. This shift has forced integrators to put into place lifecycle tracking and sustainment-oriented service parts networks on a global scale.  We also examine how Third Party Logistics Firms are struggling to overcome the Military/Industry Culture Divide and bring best practices into the DoD environment. In many cases, this Divide has been bridged and these companies are able to contribute agile inventory replenishment models and highly-flexible distribution grids to aid national defense.  Finally, we review the role of Original Equipment Manufacturers who are using advanced diagnostics and event-based maintenance to deliver anticipatory logistics capabilities to DoD clients but who are often prevented from taking full lifecycle stewardship over their systems because of DoD management (and/or legislative) impediments. DoD has started down the path of supply chain reform through programmatic devices such as PBL. This report highlights the enthusiasm on the part of DoD service providers for such reform concepts and analyzes the investments they have made to comply and build internal response capabilities. It also highlights the challenges yet to be overcome, such as the need for better collaboration incentives and information sharing.” This research was conducted by The University of Maryland Center for Public Policy and Private Enterprise, and was sponsored by the Lockheed-Martin Corporation. The University of Maryland Center for Public Policy and Private Enterprise “provides the strategic linkage between the public and private sector to develop and improve solutions to increasingly complex problems associated with the delivery of public services—a responsibility increasingly shared by both sectors. Operating at the nexus of public and private interests, the Center researches, develops, and promotes best practices;  develops policy recommendations; and strives to influence (through its research) senior decision-makers toward improved government and industry results.” This report is posted with permission of the report sponsor on this U.S. government website as a public service and does not constitute or imply endorsement of the report or its recommendations by the U.S. Government, the Department of Defense or the Defense Acquisition University.