Toward A 21st Century Defense Logistics Enterprise

Research Study

Historically the focus of the defense acquisition and sustainment system has swung pendulum-like between two policy objectives. At one end of the arc, the goal is effectiveness: insuring that the military gets the best equipment and support available as rapidly as possible even if this means choosing a more costly alternative. Effectiveness is the priority when U.S. forces are engaged in combat as they have been for the past decade. At the other end of the arc, the goal is efficiency: providing solutions based generally on lowest cost. In order to achieve efficient outcomes, the acquisition system tends to increase oversight and slow down the process of buying goods and delivering services. A focus on efficiency is common in peacetime, particularly when defense budgets are declining.

The current period in world history can be characterized as “neither war nor peace.” Although the U.S. military is out of Iraq it is still operating in Afghanistan, conducting counter terrorism activities in dozens of places and contemplating (perhaps planning for) the possibility of having to intervene in such countries as Syria, Libya and Iran. The adversaries’ tactics, techniques and procedures are continuously evolving, requiring that U.S. forces respond with new means and methods.

At the same time, defense budgets have begun to decline and pressure is increasing to reduce acquisition costs. As one defense department acquisition official described it, the environment is changing from “how quick can I get it done” to “do I know how every penny is being spent.” The drive for efficiency often results in greater oversight, a more protracted contracting process and an increase in the time it takes to deliver goods and services. Further complicating the acquisition system’s efforts to become more efficient is the growing demand by the military for commercially produced goods and services. The challenge for the acquisition system in an era of neither war nor peace is how to balance the need for effectiveness in the provision of support to the warfighter with the demand for greater efficiency.

A number of defense department organizations have instituted innovative approaches to acquisition and supply chain management that achieve a balance between effectiveness and efficiency. In most instances, these examples are based on the use of commercial best practices. Programs such as the Defense Logistics Agency’s Tailored Logistics Support Program, Naval Sea Systems Command’s SeaPort-Enhanced and the Army Sustainment Command’s Enhanced Army Global Logistics Enterprise have demonstrated a remarkable ability to streamline the procurement and supply chain process while simultaneously improving responsiveness and reducing costs.

The Department of Defense needs to examine its acquisition portfolio with an eye to expanding the use of proven, innovative procurement and supply chain management techniques. For example, DLA’s TLSP system could be expanded to other types of procurement such as communications and surveillance systems, as well as soldier clothing and individual equipment. The department also should seek to expand the current, limited use of performance-based logistics contracts.

Toward a 21st Century Defense Logistics Enterprise