News | Dec. 26, 2016

Rare But Ready

By Dianne Ryder

Supporting warfighter readiness has always been the Defense Logistics Agency’s primary mission. And when the Defense Department has a requirement industry doesn’t have a business case to support, DLA uses its Warstopper Program to fill the need.

Warstopper items are those vital to the wartime mission but not generally required in peacetime, said Luis Villarreal, DLA industrial capability and Warstopper Program manager. When such an item is needed, “we’re going to need it quickly, a lot of them, and we’re going to need it to be fresh,” he said.

The program began as an after-action item from Operation Desert Storm, when the manufacturer of the auto-injector used to deliver nerve-agent antidote was on the edge of not being able to meet the go-to-war requirements , Villarreal said.

“You can imagine the business case for somebody to maintain the facilities and skilled labor to have a nerve-agent-antidote auto-injector plant that has a good return on investment, when the sales are going to be pretty limited,” he said.

Such an item was going to need approval from the Food and Drug Administration and proper certifications. Yet it would need to be available in large numbers quickly, Villarreal said. Congress, in the National Defense Authorization Act of 1993, asked DoD to identify a solution.

So DoD funded DLA to develop the Warstopper Program. The NDAA addressed not only the auto-injector, but also chemical-resistant clothing, meals-ready-to-eat, combat boots and other “go to war” items.

In cases where industry couldn’t justify production, DLA was given authority to make industrial investments that provided DoD a return on investment without having to keep materiel on the shelf, Villarreal said.

“The best thing to do is to have an industry that’s primed and ready to produce the item in the quantities we need. But to do that, they need a business case,” he said. “We give them the business case. We can pre-position the materiel and find a way to offset inventory and equipment costs.”

But getting to that point requires a symbiotic relationship among the industrial specialists Villarreal manages, contract specialists and vendors.

“In a lot of cases, these arrangements for the vendors are outside their business models, especially when we’re talking about adding raw materials inventory to their production process,” he said.

“To be successful, you need a contracting team that’s willing and ... able to put the right type of contract in place and an industrial specialist team willing to do the research to find these items.”

Unlike the auto-injectors, requirements for Warstopper items aren’t always immediately apparent.

“We have 5-plus-million National Stock Numbers, and of those, there are subgroups considered to have surge requirements,” Villarreal said.

Most often, the military services present the case for Warstopper candidates, said Joie Coppedge, branch chief for the industrial preparedness branch at DLA Aviation.

“The services will come in annually and they give us a monthly war material requirement by NSN,” Coppedge said. “We have to show that there’s an industrial-base shortfall concern — either raw material, capacity or responsiveness. And we show there’s a readiness impact.”

The services’industrial specialists must perform an industrial study to recommend the best solution.

Even as technology changes, the agency’s weapons systems are often fixed to an older technology, Villarreal said. One example is the BA-5590 and 5390 lithium batteries. During the first Gulf War, the BA-5590 batteries were used in about 100 different weapons systems.

Then during Operation Enduring Freedom in 2004, there were no war reserves for these batteries, and industry had no surge measures. The strategy was to develop more vendors, Villarreal said.

“During OEF, the decision was made at a very high level to take management of the batteries away from the Army and hand it over to DLA,” he said. “By the time we got them, industry was kicking these out like crazy.”

When DLA did its first analysis, Villarreal said they realized there was a “panic buy” of the batteries, and troops weren’t using them like before.

“Now you’ve got these two vendors that are ramped up like crazy — so your real challenge is going to be is keeping these guys alive,” he said.

Heavy investment in many producers of the batteries served its purpose at the time, but gradually, the demand changed.

“Industry would tell you that if we could forecast accurately and give them advance notice, then vendors could respond to any manufacturing capability we typically would have. Our issue is that we can never really forecast to that level of accuracy,” Coppedge said. “They’re planning on past historical demand or their best guess estimate of future demand, so when something like a contingency pops up, it drastically changes that demand. Then industry has a hard time trying to ramp up.”

DLA Land and Maritime is pursuing a new investment strategy for the batteries and prepositioning long-lead components to improve availability.

Coppedge, part of the Warstopper Program since its inception, relayed an experience DLA Aviation had with aircraft windshields used for UH-60 and AH-64 aircraft. When the windshields were used in Operation Desert Storm they had a higher rate of failure than they do in peacetime because of the harsh environment.

The sole-source supplier had a process that was unique to them and only one vacuum chamber that all the windshields were processed through. The limited capacity delayed the production process, Coppedge said.

“The vendor was aware of that, but their business model didn’t support them making that large of an investment to meet the demand,” he said. His team was able to document that the vendor was at maximum capacity and the only solution would be to increase the capacity for that one vacuum chamber.

“They didn’t have a business case to justify it, but DoD did, from a readiness perspective,” he said.

Villarreal said DLA has other material buffers that are less tactical and strategic, such as the 300M steel buffer. In manufacturing, “buffering” refers to maintaining enough supplies to sustain operations. The supplies often include the raw materials needed for production and inventories of finished products.

Villarreal referred to the tungsten-rhenium wire, used in communication equipment such as radar transmitters and missile guidance systems. The only producer of this wire indicated it will soon stop making the product.

“But they were only going to stop producing the wire, not the ingot,” Villarreal said, referring to the large block of metal that can range from 10,000-20,000 pounds and is typically 15-20 feet long.

Villarreal said another company the Navy worked with, Rhenium Alloys Inc., was trying to produce the wire.

RAI “saw that they could modernize the process and get a better yield, so they wanted to get into the business, and they had already bought some equipment,” Villarreal said. “Since there was already a domestic company trying to get into the business, it was suggested that DoD try to help them.”

The Navy agreed and put some money into a special program to fund RAI’s efforts to begin producing the wire.

“But they did not account for getting the raw material, because the original material provider, Global Tungsten and Powders, was still going to provide it,” Villarreal said.

Then the original manufacturer announced it would no longer provide the raw material. RAI would require three years to become qualified to produce the wire and at least that many years’ worth of raw material, Villarreal said. However, RAI is a small company with limited resources. Obtain a speculative new capability and a material purchase of that quantity was not within their means.

“What we need to do is fund them for this material and then recover our cost when we purchase the wire at a reduced price,” Villarreal said.

Raw material buffers are now one of DLA Aviation’s Warstopper Program priorities. DLA asks the vendor to increase its internal inventory to meet the predicted contingency requirements.

“We manage the raw-material buffers for two types of steel and titanium under the Warstopper Program,” he said.  “We pay them to increase the amount of the material going through their production line and then maintain that amount so it can be accessible by DoD activities. And it is self-executing so ... the sub-tier order qualifies to use the buffer, the material provider has everything they need to self-execute the buffer in DoD’s best interest.”

“In the days of OEF, you had this particular steel used in a variety of weapons systems,” Villarreal said. “Only one plant was producing this particular type of steel, and you had lead times approaching two years to get into the queue to get any material out of them.”

Any DoD contract that has a Defense Priority Allocation System rating on it can use that buffer to meet requirements.

“And it’s been very successful for us in terms of really reducing the lead time,” Villarreal said. “Any kind of spike in surge, we’ve got a significant advantage there of being able to provide it.”

“We had an instance where the Bradley fighting vehicle required a transmission forging that used 300M steel as their major component,” Coppedge said. “There was a long lead time for that steel at the time — about 571 days. It was essentially a major bottleneck in providing this transmission piece for the Bradley fighting vehicle.”

The Warstopper Program invested in pre-positioning the forging that was causing the bottleneck, reducing the lead time to 77 days.

“We initially premade the forgings for the transmission unit, but they determined that was a higher risk because that investment only impacted a specific NSN and a specific vehicle,” Coppedge said. “So we came up with the approach of going further back in the supply chain and pre-positioning the raw ingots.”

The vendor buys the ingot and cuts it down to whatever size is needed, Coppedge said.

“We can [use it for] any NSN that uses that material,” he said. “You’re able to reduce the lead time for the raw material, and you have greater flexibility in what you can use the material for.”

Coppedge said they’ve seen lead-time savings of nine weeks, on average. “We’re basically buying accelerated delivery — like an insurance policy in case something happens or another contingency pops up and we need this material,” he said. “We’re guaranteed to have a set maximum lead time that we can count on.” 

Each of the supply chains has a similar team of industrial specialists to work industrial base issues, Coppedge said. They all take program management direction from Villarreal and his team.

“We identify potential candidates for Warstopper investments, and then we put together a business case and an approval document and submit it to Luis and his group,” he said. “They review it and make a decision as to whether it meets their requirements.”

Coppedge said there’s always a risk when it comes to analyzing and forecasting the need for a Warstopper item because it depends on the type of contingency, the environment, the equipment being used and the operational plan.

“The services are the driver of the things that we look at for the Warstopper Program,” he said. “The first thing we’ll look at is if an item has a war material requirement generated by the services.”

Coppedge said sometimes the industrial specialists have identified an item that could have an adverse impact on readiness. They can then go back to the services and request they take another look at it.

“In several cases, they’ve agreed with us and said, ‘Yes, based on what we’re seeing and the current demand, we would classify this as a wartime item,’ and given us a monthly wartime rate,” he said. “Once they do that, we’re free to use Warstopper funds.”