Measuring up

Measuring up

Copyright 2003, Traffic World, Inc.

As part of its effort to improve supply delivery services, the Defense Logistics Agency is introducing performance-based agreements that commit the agency, its customers and suppliers to more rigid contract goals.

The DLA is a $25 billion-a-year business that provides more than 90 percent of the repair parts used by the military services and all of its food, medical, fuel, clothing and construction materiel. Since 1998 the agency has been working on a program to create a centralized supply-chain management system.

The new system is being developed to help the agency meet the growing demands of its military customers. An important element is more effective customer relationship management, particularly as the DLA is focusing more on partnerships with customers and suppliers.

This is where the new performance-based agreements come in. The agreements set out how each partner is expected to perform, such as what products and services the DLA will provide as well as the quantities, price and delivery deadlines. Collaborative planning and reviews of the metrics used are also part of the agreements.

The agency plans to sign 20 agreements by the end of the fiscal year, said Vicki Christensen, CRM change manager within the DLA''s Customer Operations and Readiness Directorate. "These are with our top military customers, which are our focus for the near future," she said. Civilian agencies eventually will be included in the agreements.

The centralized supply-chain management system is being implemented under the DLA''s Business System Modernization program. This is the largest of the agency''s 10 major change initiatives, said Allan Banghart, director of DLA Enterprise Transformation, and when complete in 2006 will "provide end-to-end management of 4.6 million different hardware and troop support items over which DLA has cognizance," he said.

According to Banghart, the program is a key element in efforts to improve the military''s supply delivery pipeline. Most of the investment in it already has been made. As a result, DLA is confident that the U.S. Transportation Command, which in September was given overall responsibility for supply-chain management at the Department of Defense, and its partner agencies "will remain staunch supporters" of the program, he said.