FORT BELVOIR, Va. –
Vendor satisfaction rose across all categories in the Defense Logistics Agency’s 2024 Supplier Survey, which ran mid-October through mid-February.
Over 3,000 suppliers participated in the survey, giving an average rating of 3.40, up from 3.34 in 2022.
The biennial survey measured suppliers’ experience with 16 factors in four categories: communications, growth and profit potential, supplier relationships, and effectiveness. DLA’s highest factor continues to be trustworthiness, and scores raised the most in accessibility and timely resolution.
Although factors with the lowest scores are timely resolution and innovation, ratings are still higher than in 2022. Ease of bidding is the only factor that stayed the same.
“This is one of our lowest areas and has been all four times we’ve conducted the survey,” said Tim Stark, DLA’s chief of industry engagement and analysis. The agency is working to move away from what he admitted is an antiquated bidding system to a new supplier portal that’s expected to debut this fall.
New questions were added to the survey on suppliers’ surge capacity and contested logistics. Over 75% percent of respondents said they can increase production in the event of a surge but noted that not having a contract to justify expansion would be the biggest barrier. Some indicated that expanding the number of skilled workers and meeting higher demands would also be challenging.
Asked to what extent their supply chain is exposed to potential disruptions from geopolitical tension and contested logistics, less than 10% rated their exposure as a significant or severe risk.
Next to inflation, suppliers pointed to unpredictable or inconsistent demand signals from DLA as being their biggest challenge.
“Because of DLA’s role in defense sustainment, we rely on the services to provide us with their forecasts for what they’re going to need. The services often struggle in that area because it can be hard to determine,” Stark said. “Over the last five or six years, we’ve been presenting our view to industry of how the demand forecast is going to shift, but it’s at such a high level that individual companies may not find it particularly helpful in their areas.”
The agency is working to improve demand planning processes by incorporating artificial intelligence and strengthening digital interoperability with the services, he added.
Over 80% of respondents were small businesses with a short-term contract and less than $10 million in annual DLA sales. Although over 60% of participants were from DLA Aviation and DLA Land and Maritime supply chains, participation increased from energy and disposition sectors.
Stark said the responses are encouraging overall and reflect improvements made throughout the agency.
“DLA Aviation, in particular, developed a very aggressive program of communicating with suppliers and released videos on how to do business within their supply chain. DLA Energy has a similar program and a newsletter,” he said. “We’ve also made a concerted effort to highlight some of the innovation we’re doing in areas like artificial intelligence.”
Action plans are expected to be completed by spring. More information on survey results will be shared with industry associations and during the Supply Chain Alliance Conference in Richmond June 11-12.
More information on the survey and results of previous surveys is available on DLA’s Supplier Survey webpage.