News | June 9, 2020

DLA, service reps project supply demands for rest of FY 2020

By Beth Reece

Logistics and financial planners from the Defense Logistics Agency and military services refined supply forecasts for the last four months of fiscal 2020 during separate service-specific sessions June 1-5 via teleconference.

“What do you need us to buy this year that you will actually use? To ensure we stock the right stuff that has sales potential, we need to understand your posture,” DLA Logistics Operations Director Air Force Maj. Gen. Allan Day said at what he called a ”roll-up-your-sleeves” demand planning event designed to help the agency meet service needs.

DLA and military participants reviewed requirements for hardware, clothing and textiles, construction equipment, medical supplies and subsistence to predict demands through September. Tim Morefield, DLA’s planning process owner, gave each service a range of scenarios for how demand might play out in the next four months in terms of percentages. The scenarios provided a frame of reference for service representatives’ feedback, which accounted for factors like deployments, flight hours, training exercises, depot maintenance, divestiture efforts and operational adjustments due to the coronavirus.

“COVID-19 has added an extra dimension to our funding challenges,” Morefield said, “so our effort this year at the summit is to determine what’s going to happen in a most-likely scenario.” 

DLA and service demand planning systems help shape projections, but group rationalization and refinement between agency and service officials highlight unforeseen requirements like those spurred by COVID-19. Day added that when customers’ orders don’t align with joint projections on demand, excess materiel piles up. It also lessens DLA’s ability to purchase other critical items. 

“Planning for future demands where one must establish purchase agreements many months to years in advance of need due to long production lead times is challenging to do, but real-time turbulence like COVID-19 exacerbates that to a huge extent, because now we’re now focused in a very different way,” he said. 

Day cited pandemic-related adjustments in flying schedules for the Air Force as an example, adding that joint demand projections made 12-24 months ago are understandably no longer accurate.

Production and repairs at logistics readiness centers have also decreased during the pandemic with reduced operations and some workers on weather and safety leave. Still, material availability rates for each service remain high or at peak levels for some of the services due to previous predictions and buys, Day said. Readiness rates eight months to a year from now, however, depend on how closely DLA matches needs with purchases in the near term.

Uncertainty of when the nation will resume regular operations magnifies the difficulty of forecasting even short-term needs, the general and military representatives agreed. Dan Vallance, a financial manager for the Air Force, suggested recurrent reviews of service data, which has changed daily throughout the pandemic.

“It may be that we have to give you periodic and monthly updates to continue to monitor our progress, because even what we thought was going to happen a month ago was significantly different than what we now think may be happening in terms of flying hours for this month coming up,” he said. 

The current focus on near-term demands doesn’t negate the need for long-term planning though, especially with production lead times for some DLA parts averaging 334 days, Day continued.

“When you add even a short acquisition lead time to that, anywhere from 50 to 90 days on average, there’s a need to get that part in the pipeline over a year before it’s required,” he said. “That’s the challenge we have.”

The agency will schedule long-range planning sessions this summer. 

The general also acknowledged that operational decisions tend to be out of logistics and financial professionals’ control, but those operational decisions can and do drive significant changes to supply requirements.

“But we’re the professionals who are charged to figure this all out and we do it together,” he said. “We’ve got a lot of players in this business who’ve all got to understand the big picture. Logistics doesn’t happen by any one agency or any one team member. It is a definite team effort for us to be successful.”