FORT BELVOIR, Va. –
Defense industry representatives learned about $31 billion worth of opportunities to support warfighters and federal organizations during the second Defense Logistics Agency Industry Day July 31 at the McNamara Headquarters Complex on Fort Belvoir, Virginia.
Individuals from over 170 businesses that represent almost $20 billion of DLA’s $39 billion in revenue for fiscal 2018 attended the event, as well as Ellen Lord, undersecretary of defense for acquisition and sustainment.
DLA’s revenue is about 16 percent of what Amazon does, Lord said, adding that the agency has become the Defense Department’s pace setter in getting the best price using economies of scale and long-term contracts.
“I have very high expectations of DLA and our industry partners that we will be very transparent in what we continue to do, that we will be accountable for our actions and that we remember who our customer is. It’s the warfighter,” she continued.
DLA Director Army Lt. Gen. Darrell Williams said the agency is working to be as transparent as possible in its partnerships with the services and industry.
“Working with you and improving our material support, we’re decreasing the number of systems that are down due to a DLA[-owned] part and increasing readiness and lethality for the services overall,” he said.
Leaders from each of DLA’s supply chains presented demand projections for fiscal 2020 and 2021 to help industry best posture manufacturing capabilities. Areas where the agency needs industry support include parts for Joint Light Tactical Vehicles, M1 Abrams tanks, KC-46 tankers and F/A-18 Hornet fighter aircraft. Subsistence prime vendors are needed in Hawaii, Alaska, Korea, Okinawa, Africa and the Middle East. Industrial hardware such as springs and plates are also in greater demand, as well as lumber and uniform components like helmets and berets.
Demands are expected to rise due to increasing brigade combat team rotations and flight hours, as well as the introduction of new weapons systems like the F-35 Joint Strike Fighter. The need for fuel and repair parts for nuclear weapons components and aging platforms will remain steady.
DLA Acquisition Director Matt Beebe outlined contract obligations for fiscal 2019, which are projected to be above the 10-year average but below the fiscal 2018 peak at $37-$40 billion. Contracts are expected to be above average again in fiscal 2020, especially for commodities like food, medical supplies and fuel, and will follow traditional patterns with some adjustments based on current events, he said.
As the agency works to reduce the time between order placement and delivery by relying on current DLA stock, industry can expect the agency to make smaller buys more frequently for repair parts and other hardware items, Beebe added.
To forecast warfighters’ needs, DLA uses automated systems and daily input from service leaders, as well as the annual Service Readiness Demand Planning Summit.
“We’re looking at days that ships are steaming, the hours that airplanes are flying, troop levels, force mix and anything we think could change the demand signals we’re seeing to give an indication of the overall trends for the next two years,” said Air Force Maj. Gen. Allan Day, DLA Logistics Operations director.
Accurate projections are critical, Williams added, because they help the agency determine what to buy, when.
“Every time we miss demand by buying too much, we spend money on something we didn’t need and we’re not spending on something we really do need,” he said.
Increased collaboration with the services and industry have already helped the agency bring material availability rates near an all-time high for every service, the director added. The number of weapons systems down due to a DLA part has also decreased in the past year by 29% for the Army; 32%, Navy; 24%, Air Force; and 29%, Marine Corps.
Military leaders from organizations including the Naval Air Systems Command and Army Materiel Command described service-specific challenges and asked for industry’s support repairing aging systems. As the services strive toward more accurate forecasting, industry must maintain inventory levels to match needs. And as DoD works toward a clean audit, industry can help by ensuring receipt documentation is traceable and parts can be accounted for.
Enhancing supply-chain security is also a key part of increasing readiness and meeting DoD reform goals, Day added.
“I don’t think there’s a week that goes by that we don’t hear about some breach or some challenge with data getting to where it doesn’t belong, whether that’s by act of an adversary or somebody just pushing the wrong button and getting phished,” he said.
The agency has developed a strategy to strengthen supply-chain security issues like counterfeit parts and the compromise of Commercial and Government Entity codes that will involve industry’s input.
“Everybody is fighting this battle, but we’ve got to be transparent about it and work together to do it,” Day continued, adding that challenges with nations like Iran and North Korea make it imperative that DLA and industry build cybersecurity and warfighting capabilities now rather than next year.
Before breakout sessions on demand forecasts by each supply chain, Beebe shared results of the 2018 DLA Supplier Feedback Survey. Almost 3,000 companies responded on four focus areas: DLA communication, growth and profit potential, DLA-Supplier relationship and DLA effectiveness. Trustworthiness and relationship building were rated among DLA’s strengths, while innovation and industry knowledge were weaknesses Beebe said the agency is already working to improve agencywide.
To view videos of the event and slide presentations, visit the Industry Day website.