BIG IDEAS - Defense Logistics Agency

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LOGLINESDEFENSE LOGISTICS CostsNOVEMBER – DECEMBER eAuditReadinessBIG IDEASDi Specre iact l Por ull’s outGu inid Than isce Issu20 e14tracking progress

from theDIRECTORNavy Vice Adm. Mark Harnitchek, USNDirector, Defense Logistics AgencyIt’s been about a year since DLA focusedon our “Big Ideas” and moved outsmartly to significantly improve supportto the warfighter and dramatically reduceour cost of operations and cost of material.And I’m absolutely thrilled to report thatsupport to the warfighter across all oursupply chains is better than it was this timelast year, and we’re well underway towardsaving 13 billion over the next six years.This issue of Loglines is an updateon our Big Ideas and highlights the greatthings happening all over DLA. In StrategicNetwork Optimization we’re making hugeprogress in disposing of excess inventories,rationalizing our infrastructure, puttingmaterial in the right places all over theworld, and changing our forecastingmodels to ensure our rightsizing effortsare institutionalized. In Afghanistan allthe supply chains are in overdrive withDLA Energy, DLA Troop Support and DLALOGLINESOfficial Flagship Publication of the Defense Logistics AgencyDLA DirectorNavy Vice Adm. Mark HarnitchekDLA Vice DirectorTed CaseChief of StaffRenee L. RomanDirector, Public AffairsDouglas IdeDeputy Director, Public AffairsJack HooperDisposition Services doing exceptionallyheavy lifting supporting current andretrograde operations. And recall that we’rea year out from Hurricane Sandy – an eventwhere you showcased DLA’s extraordinaryability to rush huge volumes of relief to ourfellow citizens. Finally, you’re doing thingsyou’ve never done before like executingmore than 5,000 reverse auctions for allmanner of goods and services and savingthe taxpayer almost 2 billion.I’ve said it many times, “Nobody doesthis better than DLA,” and you are provingit. So to take the Big Ideas to the next level,we have established a Big Ideas website.This will expedite communications betweenDLA Headquarters directorates andprimary-level field activities on proposedsuggestions. Some suggestions have dealtwith transportation of items, pallets,security and DLA-stocked items, and mostsubmitters have been detailed in theirsubmissions. In fact, one of the submitterssaid we ought to make better use of oldfurniture, and that’s exactly where allmy office furniture came from – DLADisposition Services. And while that maynot be “big money,” it’s money nonethelessand every little bit counts. So if it’s an ideathat only saves a little, we’re interested inhearing it because every Big Idea started assomeone’s Little Idea.None of this progress would be possiblewithout the hard work, dedication andcommitment to mission that every DLAteam member has. You have proven, onceagain, that there’s simply nothing DLAcannot do when it comes to logistics. Keepup the great work, and keep pressing onhow to significantly improve support whiledramatically reducing costThank you for all you do. I amvery proud of you and honored to beDLA’s director.Loglines is the authorized publication for the Defense Logistics Agency’s workforce of federal civilians, active-dutymilitary and Joint Reserve Force augmentees at agency activities worldwide and industry customers of DLA. Contentsof this publication are not necessarily the official views of, or endorsed by, the U.S. government, the Department ofDefense or the Defense Logistics Agency.LOGLINES STAFFManaging Editor:Editor:Layout/Design:Kathleen T. RhemWriters:Beth ReeceJacob BoyerSara MoorePaul Henry CrankAmanda NeumannLoglines is prepared electronically, using desktop publishing applications; no commercial typesetting costs areinvolved. Photos not credited are courtesy of agency sources. Submissions and correspondence may be sent tothe address below:Headquarters, Defense Logistics Agency Office of Public Affairs 8725 John J. Kingman Road Suite 2545 Fort Belvoir, VA 22060-6221 703-767-6200 E-mail: loglines@dla.mil

November - December 2013CONTENTS4DEFENSE LOGISTICS AGENCYBIGIDEAS:TRACKING PROGRESSWhat’s the Big Idea?2Be Smart Buyers of the Right Stuff4Within a year of taking charge of DLA, Vice Adm.Mark Harnitchek set a series of five goals to help theagency save more than 13 billion over six years.1017The items DLA procures for the military services andother customers make up a large part of the agency’sbudget. Getting better prices from vendors andcontractors means passing savings to warfighters.Clean Out the Attic10Improve Process and Productivity17Delight Our Customers19Prove It!21What’s Your Big Idea?25Reducing excess inventory and infrastructure ishelping to save money and other resources. Now DLAhas to make sure the attic doesn’t get filled up again.DLA is set to double Defense Department-set savingsgoals for the agency by reducing operating costs andbecoming more efficient in its business processes.The results of a broad-ranging customer survey arehelping inform changes to how DLA supports itsmilitary service customers.21DLA on the om/dla.milwww.youtube.com/dodlogisticsagencyAudit readiness has been a major focus of DLA leadersfor more than a year. The agency is set to be auditready by 2015, a full two years before the target set forthe Defense Department.A website on a DLA employee intranet includes avariety of tools to help employees refine and submitideas that contribute to the director’s five Big IdeasDEPARTMENTSA Conversation with . 13LogPointsI am DLA16Back CoverLoglineslNovember - December 20131

Big Ideas: Tracking ProgressWhat’s theBig Idea?Story by Jacob BoyerA“Writ large, the mission at DLA staysthe same: It’s getting the stuff out toour customers across all those supplychains and doing that at the least cost,”Harnitchek told the agency’s workforceduring a Sept. 17 Director’s Call. “I needyou to do that. The only problem is we’regoing to have to do it with less money.”Five Big Ideas are shaping the wayDLA delivers on its promise: decreasedirect material costs, decrease operatingcosts, rightsize inventory, improvecustomer service, and achieve auditreadiness. When Harnitchek announcedthem as DLA’s way forward in April 2012,Navy Petty Officer 3rd Class Lacordrick Wilsons Defense Logistics AgencyDirector Navy Vice Adm. MarkHarnitchek approaches the endof his second year in charge ofthe agency, the focus on his “BigIdeas” initiative is more crucial thanever. The Defense Department’s budgetis shrinking, and Harnitchek wants theagency to continue delivering on his promise to “significantly improve performancewhile dramatically reducing costs.”In May, the director expanded hisplan for DLA to save 10 billion over fiveyears to one that is looking for 13 billionby 2019.he said it was up to every member of theagency to make them happen.“What I’m asking all of you to do ishelp us figure out how we’re going to dothis,” the director said. “I’m not asking youto be cheap or to short the customer, butto figure out a way to have something thatcost 1 last year cost 80 cents this year.”Harnitchek’s fiscal 2013 Director’sGuidance laid out how he and agencyleaders planned to achieve thoseambitious goals, and leaders and teammembers across the agency have workedto execute those plans. Tools DLA wasalready using, like reverse auctions,and initiatives the agency was alreadyinvolved in, like Strategic NetworkOptimization, were enhanced to saveeven more money. As of September,the director said, reverse auctions hadalready saved more than 1.6 billion infiscal 2013.While the increased emphasis onexisting concepts has contributed to theeffort, new ways of doing business are alsocoming to fruition. Employees involvedin the First Destination Transportationand Packaging Initiative have identifiedmillions of items that will no longer needto have military-specific packaging addedbefore shipping, saving material and laborcosts. As DLA planners work to shed theagency’s excess inventory, new forecasting models are helping them betterpredict warfighters’ needs for sporadicallyrequested products.Efforts are also being made toimprove DLA’s interactions with itscustomers. A far-reaching survey withsenior leaders across the military servicesgave DLA Logistics Operations a goodlook at what the agency does rightand where improvements are neededwhen it comes to delivering supplies towarfighters worldwide. The results ofthat survey are driving efforts to increaseAs the Defense Department maintains itsschedule to achieve audit readiness in 2017,DLA is projecting it will have its first full auditcompleted in 2015, two years ahead of theDoD target.2www.dla.mil

Navy Petty Officer 1st Class Jimmie Crockettcommunication, increase responsivenessand proactively engage the agency’scustomers.In audit readiness, DLA’s team isleading the Defense Department inmeeting former Secretary of DefenseLeon Panetta’s goal to have the entiredepartment fully auditable by the end offiscal 2017. DLA is projected to be readyfor its first full audit in 2015, a full twoyears ahead of the DoD schedule.These initiatives and more will helpDLA navigate the uncertain budgetaryenvironment the Defense Departmentfaces, Harnitchek said. A large portion ofthe agency’s budget is tied to the cost ofbuying materials. Although operationswill be streamlined, he said, a large chunkof the 13 billion in planned savings willcome from there.“We’re about a 45 billion outfit here;about 5 billion is the buildings, the people,warehouses, salaries and [informationtechnology]. The big number is the moneywe spend to buy things,” the director saidin September. ”We’re certainly going to getmore efficient in the cost of operations, butthat’s not where all the money is. There’s abig effort here to have us cost a lot less thanwe did a few years ago.”In the introduction to his fiscal 2014Director’s Guidance, Harnitchek wrotethat DLA’s workforce continues to buildon the solid foundation laid down inprevious years and said the “focused effort,hard work and dedication” are why theagency continues to succeed in its goals.Sailors inventory boxes at a DLA warehouse inSan Diego. The First Destination Transportationand Packaging Initiative has reduced the needfor military-specific packaging, saving theservices material and labor costs.“As we face the significant fiscal andstrategic challenges ahead, we mustremain resolute and continue to lead theway in innovation and transformation,”he wrote. “Acting together, withenthusiasm, optimism and focus, weWILL continue to achieve great things.What you do makes a difference so keepcharging. I am proud of you and thisgreat organization.”“Writ large, the mission at DLA stays the same: It’s getting thestuff out to our customers across all those supply chains anddoing that at the least cost.”— Navy Vice Adm. Mark HarnitchekLoglines l November - December 20133

Big Ideas: Tracking ProgressDecrease Direct Material CostsBe Smart Buyersof the Right StuffIStory by Amanda Neumannt’ll take several methods of drivingdown costs to meet Defense LogisticsAgency Director Navy Vice Adm.Mark Harnitchek’s intent for DLA to“be smart buyers of the right stuff.”As one of Harnitchek’s five “BigIdeas” implemented in March 2012, DLAis working to decrease direct materialcosts. This is a large part of efforts toshed 13.6 billion in expenditures by2019. Methods DLA is using to drivedown costs include: reverse auctions,value management, strategic sourcing,and improvements to the agency’sprocurement systems and processes.Although the agency has alreadyreached or exceeded most of its targetedgoals for fiscal 2014, which includesavings from both fiscal 2012 and 2013,improvements can be made in someareas, said Tim Stark, head of the functional group for material cost reductionin DLA Acquisition.“We’ve done really well startingup,” he said. “The targets get more andmore aggressive as you go forward. AndREVERSE AUCTIONSRegular auctions have multiple buyers bidding toward one source supplier. Reverse auctionsare a Web-based pricing tool that fosters competition between contractors to reduce the pricethe government pays for a particular item. By requesting an item from multiple suppliers, DLA isable to get those suppliers to bid against each other to give DLA the best price.4www.dla.milalthough we’re doing great, we’ve got along way to go.”Reverse AuctionsA large portion of the savings comefrom reverse auctions, which have savedDLA more than 1.6 billion over thepast year, Harnitchek said at his Sept. 17Director’s Call with agency employees.In reverse auctions, sellers bid onlinefor contracts. These can be contracts foreither instant procurements, for itemsneeded to send directly to a customeror to be stored by DLA, or for long-termcontracts for a term usually lasting fiveyears, said Carmen Pillitteri, a businessprocess analyst at DLA Land and Maritime.By allowing sellers to view the lowestoffer and bid against it, the process creates intense competition between firms,which drives prices down, he said.“Since it’s a competition-based event,we need to have at least two vendors thatare quoting and that are competitive witheach other,” Pillitteri said. “When theylog in, they see their own price and theyalso see the current lowest price on theprocurement. They don’t know who theircompetitors are, and they don’t knowhow many competitors they have in theauction, but they see the prices and havean opportunity to lower their price.”Auctions run for no longer than anhour, Pillitteri said.

Photo Courtesy DLA Land and MaritimeObtaining Technical Data Packages used to manufacture spare parts allowed DLA Land and Maritime’s value management team to increase competitionwhen procuring parts for up-armored construction equipment, like this heavily armored Caterpillar D9 bulldozer. Previously bought sole-source, thecompetitive technical data packages have led to a total of 1.6 million in savings to date.“We set it up, give the [sellers] twodays to prepare, run it for a half hour toan hour and then it’s done,” he said. “Ifsomeone bids in the last few minutes, thetime will be extended by five minutes, soevery vendor has an opportunity to putin their best price. But it’s a very definiteand relatively short timeframe. That’s oneof the best parts about it.”DLA requires reverse auctions forprocurements of 150,000 or greater, butreverse auctions can be used for procurements at any price, Pillitteri said. Forinstance, DLA Land and Maritime temporarily changed its local policy to requirereverse auctions on procurements at the 25,000 threshold, providing a substantialincrease in reverse auction opportunities.As a result, the organization conductedseven times as many reverse auctionsin fiscal 2013 as it did the previous year,resulting in savings of 28.5 million by July2013. This sum far exceeded the DLA Landand Maritime target of 3.3 million in savings by the end of fiscal 2014, he said.Held almost daily, reverse auctionshave also worked well for other DLAfield activities, including DLA Aviation,which has already exceeded its fiscal 2014goal of 4 million. From October 2012to July 2013, DLA Aviation conducted241 reverse auctions, 49 percent ofwhich were successful and saved theorganization 27.96 million, said LaKishaAndrews, DLA Aviation’s reverse auctionprogram manager.“DLA Aviation’s contracting officershave done a great job embracing theuse of reverse auctions, which has beena great benefit to the successful pushof [DLA] Aviation’s overall savings,”she said. “Two of our most successfulauctions were for parachutes andturbines. The parachute yielded savingsDLA’s Big IdeasDecrease Direct Material CostsRightsize InventoryDecrease Operating CostsImprove Customer ServiceAchieve Audit ReadinessLoglines l November - December 20135

Big Ideas: Tracking Progressof 7 million, and the turbine yieldedsavings of 2.1 million.”DLA Energy is also using reverseauctions to get better prices andincrease competition in awarding fuelcontracts, said Anthony Thomas, policychief of the Procurement PlanningBranch in DLA Energy.In fiscal 2013, DLA Energy achieved 400 million in savings by using reverseauctions.“We’re using this tool across thedifferent business areas where we thinkit’ll add value and help us get betterpricing,” he said.Value ManagementWith a goal to promote competition, value management is asystematic process of reducing material costs while retaining thesame or better quality, reliability and function.Force’s research and came up with a newfoam, which created a new national stocknumber and a sole-sourced item. Anytimeyou have a sole-source situation, pricestend to be a little bit higher. Now, we havea second source on all [types of] the foam.So far, we’ve awarded three contractsagainst those NSNs, and we’ve saved 200,000, but it’s very early in the savingswindow. Over the six-year window, weexpect to save about 12 million just byadding that [additional] source.”Warner Robins, [Ga.], to fund an effortto revise and complete the technical datathey already had so we wouldn’t have tobuy these items sole-source,” he said.“Once completed, we used that technicaldata to break out the item through asource selection process. We ended upselecting a new contractor whose priceswere just about half of what [the previousvender’s] were. To date, we’ve saved about 48 million over the past two years. Weexpect to save about 60 million total.”By July 2013, DLA Aviation hadsaved 42 million, in part due to anothersuccessful effort: creating additionalsources for ballistic foam, used to preventexplosive vapors in Air Force A-10Thunderbolt II aircraft wings, Newlon said.“Several years ago, our Air Forcecustomer helped us to realize themanufacturing process for that foam wasgoing to be phased out, so we had to finda new ballistic foam out of necessity,” hesaid. “We worked with and funded the AirStrategic SourcingPhoto Courtesy DLA AviationWith a goal to promote competition,value management is a systematicprocess of reducing material costs whileretaining the same or better quality,reliability and function.At DLA Aviation, F-15 Eagle aircraftwire harnesses have garnered the mostsavings through value management,helping the organization easily meet itsfiscal 2014 target of 14 million, saidRalph Newlon, deputy director of DLAAviation’s Engineering Directorate.“Five years ago, DLA AviationEngineering worked with the Air Force inA member of a Defense Logistics AgencyDisposition Services team operates a plasmacutter at Camp Leatherneck, Afghanistan. Thecutters use electricity and current to cut metalinto small parts, which are then sold as scrapmetal to local vendors.DLA Acquisition’s Stark said the mainarea under reducing material costs in whichDLA has yet to hit its target is “strategicsourcing,” or increasing governmentwidecooperation in purchasing goods. UsingDLA’s buying power helps get better pricesfor a wider range of customers. Strategicsourcing uses a variety of techniques,including prime vendor relationships,long-term contracts, and “performancebased logistics,” which is a way to providesupport for a weapons system by havingthe contractor be responsible for theperformance of the system, not justsupplying spare parts.“That’s where we see most ofour large contracts with originalequipment manufacturers and otherbig manufacturers,” Stark said. “Thosecontracts have just been put into placeover the course of this past year, and alot of them are coming due in the nextfew months. Once those are in, we fullyexpect to make the fiscal 2014 target forthose as well.”Switching a sole-sourced ballistic foam, usedin the wings of A-10 airplanes to prevent thebuildup of explosive vapors, to a secondsource will save the Defense Logistics Agency 12 million over six years thanks to a valuemanagement initiative within DLA Aviation.6www.dla.mil

Laura FearingLaura FearingThe agency’s target savings throughstrategic sourcing exceeds 4 billion,but DLA Troop Support has alreadysaved 66.1 million, said Ruth Herman,a senior procurement analyst at DLATroop Support.“All the big stuff we’re doing is understrategic sourcing,” she said. “The bigone in DLA Troop Support Subsistence isincreasing manufacturer discounts. We’renegotiating discounts for our NationalAllowance Pricing Agreement program.It’s actually pricing agreements we havewith major manufacturers like Kellogg’sand Nabisco to give us the best deal, andwe’ve got about 20 million in savingsthrough July.”DLA Troop Support Medical isexpected to save 791 million aloneover the next 10 years due to a recentnegotiation to lower pharmaceutical primeA brake pad in military-specification packaging(left) and commercial packaging (right). Alreadyimplemented in March 2013, 4.2 million itemswithin targeted supply chains, or 93 percentoverall, are eligible for the commercial packaging in the First Destination Transportation andPackaging Initiative, saving not only materialcosts but labor costs as well.vendor distribution fees, Herman said.“We just negotiated a better dealfrom a negative 5.28 distribution fee tonegative 8.87 percent,” she said. “That’sgiving us 6 to 7 million a month, sothat’s going to give us another 12 to 14million alone [by the end of fiscal 2013].We’ve also awarded our first national[generic drug] contract, so we’ll startseeing those savings soon.”While the Big Ideas initiatives hasbeen challenging, it has pushed the supplychain to make more aggressive moves,something that better aligns DLA with thecommercial sector, Herman said.“This is making people negotiateharder and be a little bit more aggressive,”she said. “They’re doing a little bit moremarket research and seeing what thecommercial market is getting. But thebiggest challenge with the Big Ideas,across all of the levers, is measuring thesavings. Putting levers together and tryingto figure out how you’re going to save themoney is one thing, and then figuring outhow you’re going to count the money isanother thing.”DLA Energy has also seen significantsuccess in its strategic sourcing efforts,namely in its negotiation techniques withsuppliers, Thomas said.“It’s a package of things that hashelped us,” he said. “We did a number ofinitiatives to squeeze every penny we couldout of our deals, including getting supplierspaid faster and upping the amount ofguaranteed product that will be purchasedunder a contract. In the fuel industry, if youcan shave a penny or two off per gallon, youcan claim success; it’s just that tight.”A FRAM oil filter in commercial (left) andmilitary-specification packaging (right). Theswitch from military to commercial packagingis expected to save the agency hundreds ofmillions of dollars over the next five years dueto the First Destination Transportation andPackaging Initiative.Just like at DLA Troop Support, aligningwith commercial practices has also helpedDLA Energy achieve savings, Thomas said.“Aligning the quality standards tocommercial practices is a huge changein how we’ve done business that appliesto all contracts,” he said. “We’ve triedto move toward more commercial [fuel]product because it’s more readily available, which improves competition. Evenpredictability of when a solicitation willcome out is beneficial since [suppliers]will be prepared and ready for it.”DLA Energy is expected to save 195million over five years by procuring morecommercial fuel for the military services.Procurement Systems and ProcessImprovementsImprovements to the agency’sprocurement systems and processescan have a profound effect on costsand performance. Current initiativeswithin PSPI include the expanded useof “should-cost” assessments to findout items’ actual values, improvedcustomer returns and an increased useof the agency’s Procurement AutomatedContract Evaluation system.One of the most anticipated initiativesin the agency is the First DestinationTransportation and Packaging Initiative.With a twofold approach to reducepackaging costs using commercial-Loglines l November - December 20137

Big Ideas: Tracking Progressspecification packaging and decreasetransportation costs by allowing vendorsto use DLA’s inbound transportationproviders, the initiative is expected tosave the agency hundreds of millionsof dollars over the next five years, saidTodd Jenkins, program manager for theinitiative at DLA Land and Maritime.“The [First DestinationTransportation and Packaging Initiative]is really a catalyst to help both of theseprocess functions achieve optimumsavings,” he said.Since the initiative’s start in March, 4.2million items within the targeted supplychains, or 93 percent overall, are eligible forthe commercial packaging, saving materialand labor costs, Jenkins said.“It really comes down to just usingsome of the industry’s best practices topackage an item,” he said. “There’s amisconception that [military] packaging is excessive; sometimes it’s the rightamount of packaging in order to getan item serviceably to the customer.However, when people put an extra levelof packaging in, that adds extra cost.More than the material itself, it was therepackaging labor portion that woulddrive costs up.”While the agency has foundmany opportunities for commercialpackaging, Jenkins said, some items,like hazardous materials, will still beshipped using military-specificationpackaging. He said it is important tonote that any savings from the initiativewill filter right back to DLA’s customers.“This really has been a collaborative,interagency effort that had been inthe wings for a while until we hadtremendous support, like the director’s,that pushed it,” he said. “We in thegovernment have to be the ones that latchonto as much of these savings as possible,so that we can get the value of the dollarto go a little further for the DefenseDepartment during these tough times.Whatever savings we make, we pass thatback to the warfighter for personnel,8www.dla.milDECREASING DIRECDLA LAND AND MARITIME 28.5M 3.3M 3.6M 1.6M 37.4M 13.8M 21.2M 28.3MCurrentFY14 GoalReverse Auctions: Seven times as many auctions asFY12; 2,064 to date. Rifle bipod – award value 1.28Bawarded March 2013, historicalsavings of 91,119.Value Management: 955 awards on 655 VM projects,top 15 projects produce 15.8Min savings. Three successful antenna projectssaved 6M alone.Strategic Sourcing: 120,000 original equipmentmanufacturer and long-termcontracting actions to negotiatereduced unit prices for items. More than 225 long-term contractsawarded. Eaton competitive project, awardedSeptember 2013, will save 1.5Mover five years. An additional 5.6M is expected froma Hawker Battery source breakout.Procurement Systems andProcess Improvements: 169,000 contract actions resulted in 9M in savings. First Destination Packagingand Transportation Initiative,implemented in March 2013,will provide further savings.DLA ENERGY 400.0M 20.0M 387.8M 219.7M 181.8M 320.5MCurrentReverse Auctions: Three June auctions, for a mixof fuel to be delivered to forwardoperating bases throughoutAfghanistan, netted 400 million insavings.Strategic Sourcing: By procuring more commercialfuel for the military services, DLAEnergy is expected to save 195Mover the next five years.FY14 GoalProcurement Systems andProcess Improvements Upcoming Enterprise BusinessSystems eProcurement rolloutin April 2014 is expected to savemillions.

T MATERIAL COSTSDLA AVIATION 102.7M 4.0M 5.2M 17.5M 27.9M 24.3M 4.5M 14.0MFY14 GoalCurrentReverse Auctions: So far, 211 auctions conducted,of which 93 were successful. Three auctions on parachutesnetted 9.5M in savings.Strategic Sourcing: Supplier and Department of Defensepartnerships. Tailored logistics support /performance-based logistics.(Also in DLA Land and Maritime.)Value Management: Three contracts for 200,000. A-10 ballistic foam – Over six years,expect 12M in savings. F-15 wire harness to date hassaved 48M, 60M expectedsavings total.Procurement Systems andProcess Improvements First Destination Transportation andPackaging Initiative will providefurther savings.(Also used in DLA Land andMaritime and DLA Troop Support’sindustrial hardware and constructionand equipment supply chains.)DLA TROOP SUPPORT 66.1M 177.0M 0.98M 17.1M 6.3M 28.7M 48.6M 13.5MCurrentReverse Auctions: 128 awards, 70 in clothing & textiles. Largest dollar savings. 2.1M C&T award for enhancedballistic inserts.Strategic Sourcing: Increased manufacturer discountsunder National Alliance PricingAgreement program has generated 17.6M (subsistence). Negotiation savings generated 10.3M (construction & equipment).FY14 GoalValue Management: Most savings in clothing and textilesdue to the break out of sole-sourceditems. A bag waste kit saved 1.1M peryear, total 2.2M so far. A sole-sourced turned competitiveretro lantern kit has saved 1.2Mtotal for FY12 and FY13.Procurement Systems andProcess Improvements Expanded use of “should cost”assessments (C&T).equipment and other operations that arealready stretched thin.”Due to be implemented in late October2014, transportation changes withinthe continental United States will helpconsolidate shipments from local vendors,using DLA trucking to travel from onelocal destination to the next, said RoyPitman, a program analyst and contractingspecialist at DLA Land and Maritime.“For inbound procurement, DLAdoes business with about 7,300-plus company locations,” he said. “Each oneof them operates independently. Theycould be right next door to each other,but they’re not taking advantage of usingthe same trucks that are coming in. We’repaying for their transportation rates,which are not nearly as good as what wecan buy. Plus, we’ve got 7 billion to spendas opposed to each of those vendors, twothirds of which are small businesses. Theirspending doesn’t allow them to get goodtransportation rates from DHL, FedEx,UPS and other carriers, so we can leverageours to get better rates.”For DLA, although the c

BIG IDEAS. LOGLINES. DEFENSE LOGISTICS AGENCY. NOVEMBER - DECEMBER 2013. This Issue. s Guidance 2014 . from theDIRECTOR. Navy Vice Adm. Mark Harnitchek, USN Director, Defense Logistics Agency Disposition Services doing exceptionally . heavy lifting supporting current and retrograde operations. And recall that we're

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