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Eliminating the Iron Mountain
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Eliminating the Iron Mountain

Just-in-time supply distribution has only reduced, and not eliminated, the hoarding of excess repair parts and supplies. The author believes that the Army must overhaul its entire supply system if efficiency in obtaining parts and supplies is to be achieved and hoarding is to stop.

The Army’s traditional mass-based logistics system involves stocking a large inventory of parts and supplies that may be required to satisfy mission requirements. The intent of maintaining a large inventory is to shorten the length of time required to obtain parts and supplies when they are needed. These “iron mountains” of stocks are regarded as dependable, readily available sources of supplies required for forces to be rapidly deployable, highly mobile, and sustainable. Maintaining iron mountains of supplies places heavy demands on Army resources that are increasingly scarce, including warehouse space, personnel to operate warehouses and move supplies, and space on transporters. However, budget reductions have continued to decrease the funds allocated to resource these functions over the years.

Following the end of the Cold War, most Americans felt that overseas threats to U.S. interests had been reduced greatly. Thus, during the 1990s, politically motivated changes produced an austere fiscal environment that limited the Army’s ability to carry out the policies and commitments mandated by the National Military Strategy. When the military operational structure was reduced even as military commitments around the globe increased, Army supply logistics became inadequate. Budget constraints restricted routine vehicle repairs, delayed deliveries of parts and supplies, and impeded the implementation of vehicle maintenance initiatives and modernization programs.

After Operation Desert Storm, the Army began a shift from just-in-case stockage to a more cost-effective, velocity-based logistics system that closely parallels the distribution system used in the commercial sector. With this system, known as just-in-time distribution, buyers communicate with suppliers electronically to order needed supplies that are shipped directly to the user without the need for warehouse storage. Just-in-time distribution replenishes needed items as consumption occurs and substantially reduces the inventory. An electronic supplier-buyer interface also eliminates several steps in the ordering process, thereby speeding delivery of supplies.

Just-in-Case Stockage

For users of just-in-case stockage, the quest for a part usually begins with an attempt to get the item from another in-theater unit that may be stocking it against some future need, may already have traded the part with another unit, or may have misplaced it, which results in a search. Thus, units depending on just-in-case stockage may experience extended wait times until they receive needed parts.
An important advantage of just-in-case stockage is that the unit in need may have stocked the part “just in case” it is needed so that it is immediately available to the requester and no wait time is encountered. However, interviews with personnel deployed for Operation Desert Storm indicated that, in using the just-in-case system, they often could not locate requested parts that were supposed to be in the theater.

Just-in-Time Distribution

The users of a just-in-time distribution system also face wait times that vary according to whether or not the manufacturer of the needed part has it on hand, can produce it specifically to fill the order, or has discontinued manufacture of the part. In just-in-time distribution, a needed part is ordered through channels from the manufacturer or depot and shipped directly to the requesting unit. A significant disadvantage of pure just-in-time distribution is that the requester has no option to obtain a part from just-in-case stockage in the theater.

The findings of an independent 1995 study of supply logistics in Operation Desert Storm indicated that, because military customers had to use chains of command and distribution in the ordering and delivery processes, the speed of Army distribution of supplies was slower than that of civilian distribution. At that time, Department of Defense distribution systems took 26 days to deliver in-stock items, whereas commercial firms delivered in-stock items in 1 to 3 days. Military procurement of a repair part averaged 88 days versus H to 4 days for commercial firms, and the average military repair cycle was 40 to 144 days versus 3 to 14 days for commercial firms.

During Desert Storm, the just-in-case logistics system was so severely hindered by misprioritized shipments that high-priority items, such as food, ammunition, and fuel, were not delivered to participating units in a timely manner. To avert the possibility that units might run out of critical supplies, a “work-around” just-in-time distribution system called Desert Express was developed. The Army used a similar system in Bosnia to deliver critically needed supplies, particularly during the buildup phase of that operation. However, if ordered parts were not rated as high priority in the ordering process and the requisitions traveled through normal supply channels, the customer wait time was so long that it sometimes posed a threat to operational readiness.

In 1991, Lieutenant General William G. Pagonis, commander of the 22d Support Command, reported in his after-action review of Operations Desert Shield and Desert Storm that logistics management units were late in arriving in the theater and, once they were there, they often were unable to manage supplies effectively. To keep supplies and equipment flowing into the theater, local laborers were hired and combat troops were commandeered to offload ships. This finding was not surprising in view of the inherently cumbersome nature of deploying large logistics support units to deliver supplies to highly mobile combat units in overseas locations. In the staging area of an overseas theater of operations, the flow of supplies competes with the flow of vehicles to add to congestion and confusion.

General Pagonis reported that, during the reception phase of Desert Shield, the traffic flowing through the ports of Saudi Arabia totaled 12,400 tracked vehicles, 114,000 wheeled vehicles, 1,800 Army aircraft, 33,000 containers, 1,800,000 tons of cargo, 273,000 tons of ammunition, and more than 350,000 personnel. Losses of container documentation multiplied the number of transportation personnel needed to channel containers to the correct deploying units. Such delays lengthened the waits by units to receive their supplies. Many containers languished in the staging area while awaiting identification to determine the appropriate receiving unit.

Nonstandard Solutions

A number of nonstandard methods have been used by Army personnel to obtain supplies during military operations, including padding supply orders, stockpiling extra items, and procuring supplies from black markets. General Pagonis noted that, during Desert Shield, multiple requisitions were sometimes placed for an item already in the theater, while other supply items were procured locally when possible. Army personnel often resorted to alternative measures to obtain supplies because they had lost faith in the Army supply system.

Downsizing the Army’s equipment inventories during the 1990s challenged the Army to use fewer transportation assets to provide supplies to forces deployed overseas. When transporters delivered equipment to seaports for shipment to the theater of operations, they often found that the accompanying iron mountains of supplies took up more space on the ships than planned. In such cases, units had to move their equipment to the theater on two different ships, which caused confusion and congestion for the deployed units awaiting the arrival of their equipment. Under these circumstances, host nation support was used to move supplies and provide lodging for incoming forces while they waited for all of their equipment to arrive.

Deployment Problems

Just-in-time distribution, used more often, but not exclusively, during recent operations, has resulted in the deployment of smaller basic loads that require fewer containers and thus facilitates more rapid deployment. This equates to reduced space requirements on strategic lift assets and less manpower to move supplies. At the same time, it creates the resulting opportunity to deploy more units on fewer strategic lift assets. Deployments conducted using just-in-time distribution have made more efficient use of strategic lift to move units into the theaters of operations. How-ever, some just-in-case deployments of iron mountains of “extra” supplies continue.

Customer Satisfaction

Whether an organization chooses just-in-case stockage or just-in-time distribution is influenced by customer satisfaction. For example, in an overseas theater of operations, the level of customer satisfaction with delivery of vehicle repair parts reflects, to some degree, the level of operational readiness of vehicles. That is because operational readiness relies largely on the timely delivery of repair parts to complete required maintenance. Long wait times for ordered repair parts are likely to be viewed as far more detrimental by customers anxious to improve their operational readiness than by logisticians, who might accept a delivery speed slower than that of civilian shippers if it represented an improvement over past delivery speeds.

Many soldiers deployed overseas from 1990 to 2000 expressed dissatisfaction with the speed of delivery of vehicle repair parts. Customer satisfaction, both in units that used just-in-case stockage and in units that used just-in-time distribution, was influenced by the fact that they relied, to varying degrees, on excess repair parts their units had hoarded.

It should be noted that differences in satisfaction with delivery of repair parts within a theater could reflect relative proximity to supply sources during different deployments. If, for example, a unit located near both the corps command and a support unit could not immediately obtain a supply item from one location, it likely could obtain it from the other. Such a supply advantage clearly was not enjoyed by units stationed in remote areas. In some cases, those that had been part of a split deployment were able to call their home stations in the continental United States (CONUS) and request purchases be made via unit credit card and then sent to the overseas theater, where Army transportation would be scheduled to deliver the part to the requesting unit. In reality, the Army’s just-in-time distribution methods for ordering supplies are very similar to just-in-case ordering methods. The biggest innovation in the just-in-time distribution system is that the order forms are filled out by computer instead of by hand. Interestingly, both just-in-time and just-in-case units scheduled to deploy receive priority when ordering vehicle repair parts that will bring their operational readiness status to 100 percent. However, once the units are deployed, operational readiness suffers because repair parts take so long to procure.

Supply System Realities

The fact that civilian agencies can order and receive most parts within a few days indicates that just-in-time supply distribution does work and should work for the Army. Repair parts for military ground vehicles should not take significantly longer to arrive at their destinations than repair parts for civilian ground vehicles, especially since discontinued parts are maintained in depots against a future need and do not have to be manufactured before being shipped to the customer. However, considering the added channels that military vehicle requisitions go through from the user in an overseas theater to the manufacturer and the distances parts must traverse back to the user, it is reasonable to assume that en route times may be a few days longer.

Just-in-time distribution works fairly well in CONUS because the requester can use the unit’s credit card to purchase common line items from manufacturers or local civilian distributors. However, parts for vehicles not in common civilian use, such as tanks and armored personnel carriers, are not available from local merchants. Just-in-time purchase of those parts is subject to a timeline similar to that for purchase of parts for vehicles overseas.

The just-in-time distribution system, as it is presently constituted, allows for enough reduction in excess to deploy Army forces quickly and efficiently. However, once the forces are in theater, just-in-case stockage is slightly more efficient for obtaining repair parts, though it is affected adversely by ineffective systems for tracking parts in the theater. The introduction of just-in-time distribution does not solve the problem of getting vehicle repair parts where they are needed when they are needed, except when distribution of these supplies to the requesting unit is aided by changes in the accompanying support infrastructure, such as the unit’s location near a well-supported corps headquarters, or credit card purchase support from a CONUS home station.

Customer satisfaction drives the attitude toward supply distribution in the Army, just as it does in the civilian sector. Customer satisfaction identifies the underlying force behind the need for change to the Army supply system. Comments from those on the receiving end of the Army supply system reveal that both just-in-case stockage and just-in-time distribution exhibit inefficiencies in delivering repair parts to users in the theater. The differences in customer satisfaction attributable to the proximity of units to supply sources and their ability to take advantage of credit card purchases by their home stations illustrate the importance of alternate support infrastructures.

The many layers of the supply hierarchy through which supply requests must travel point to the need for a completely electronic, real-time data interchange that ensures the speedy delivery of parts and supplies to requesters and satisfies the “need to know” of the supply hierarchy. The identification of some causes of low customer satisfaction brings to the forefront some opportunities to make significant improvements in the supply system in order to get parts and supplies to units overseas. Removing the hierarchical levels of the supply system through which each order must pass, and instead providing those levels with “copy-furnished” notification, will improve customer wait time and still allow those levels to track supplies and arrange in-theater transportation as required.

The fact that the just-in-time supply scenario has only reduced, and not eliminated, the hoarding of excess repair parts and supplies shows the soldiers’ reaction to the Army’s high readiness requirement in a climate that does not recognize the slow pace of the Army supply system. This reaction is a clear indication that, in its quest for continued high readiness standards, the Army must overhaul the entire supply system if efficiency in obtaining parts and supplies is to be achieved and hoarding is to stop.

When considering policy and process changes, decisionmakers must revamp the entire supply system to take advantage of all the available technology instead of simply automating the old ordering process. If the Army pursues drastic changes, it can increase operational readiness through greatly increased efficiency in delivery of supplies and parts to units and repair shops deployed in overseas theaters of operation.

Laurel K. Myers is assigned to the Naval Medical Education and Training Command at Bethesda, Maryland. She has a bachelor’s degree in education from Florida Atlantic University, a master’s degree in educational administration from Texas Christian University, a master’s degree in early childhood education from the University of Southern California, and a Ph.D. in applied management and decision sciences specializing in logistics from Walden University in Minnesota.

Eliminating the Iron Mountain
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