accenture defense supply chain transformation framework

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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8

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.


19/20

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.


20/20

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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