As more troops arrive in Iraq, it is up to Lt. Gen. Robert Dail to make sure they have enough boots, fuel and guns. Dail is director of the Defense Logistics Agency (DLA), which provides supplies and logistics services to the military. When he took the job seven months ago, the dust had barely cleared from critiques of the agency’s competence during the early days of the Iraq and Afghanistan wars, when it had failed to deliver crucial supplies such as generators, tires and food to the soldiers. The DLA also had been criticized by the Government Accountability Office for lax information security practices, including failure to assess system security risks.
The first component of a new ERP system had recently been phased in, connecting the agency’s 40,000-plus suppliers to its three major inventory management centers in Philadelphia; Columbus, Ohio; and Richmond, Va., along with many key sites around the globe. The system was designed to more efficiently manage supplies, demand and supply planning, order fulfillment, procurement, and financial accounting processes. Dail says it has allowed DLA to fulfill most orders more quickly and more accurately.
But to Dail, a new ERP system could only be as good as the business model it supported. The early years of the Iraq War demonstrated that the agency’s traditional model of pushing supplies to the field from central locations didn’t work as well as it should. Delivering the goods still took too long, and sometimes there were severe supply shortages.
So Dail is on a mission to use that ERP system to turn DLA into a demand-driven organization that pushes supplies directly to the troops on the front lines. His model is FedEx, delivering orders within days and allowing customers to track them online. Being on the front lines also means the agency has to be able to get where the action is—quickly. Therefore, this summer, Dail plans to further test and implement a wireless supply chain system that can be deployed anywhere in the world and be online within hours.
“The world requires that we buy things and deliver them when the [troops] need them. So, information becomes very critical,” Dail says. That means accurately forecasting soldiers’ future demand for items such as medical supplies, spare parts, food or clothing, and being able to get those items out fast.
Dail spoke with CIO Washington Bureau Chief Allan Holmes about how he expects IT to be a major driver in the transformation of DLA into a customer-driven supply chain organization.
CIO: What experiences molded your view that IT is a key ingredient in forming the strategy of an organization?
Lt. Gen. Robert Dail: My assignment before coming here was as the deputy commander of the U.S. Transportation Command and before that as the command’s chief operating officer. Our mission was to move America’s military all over the planet. We had the planes, we had the ships, but the thing that connected it all together, the thing that allowed us to control [where to send the transportation], was information technology.
When I got here, I found an agency that had taken four years to develop an ERP solution to improve its business capabilities. Before, we had a system that allowed us to buy supplies and put them in a warehouse. The focus was on order fulfillment.
But I found myself asking, Now that we have this capability that moves us from just buying [supplies] to supply chain management, how do I move the agency from an entity that manages suppliers at the wholesale level to an agency that links supply and demand where my customers are located?
We have to move from Philadelphia, Richmond and Columbus [out to] the Air Force bases, Marine Corps camps and Naval bases. We have to operate where the troops are. When we get the supply directly to the military customer, we reduce the need for warehousing and military transport. Then we will significantly reduce customer wait time and the costs to ship and store supplies, and significantly increase our customers’ satisfaction.
How do you do that?
I think the first thing that you have to do is get out of Washington. I take senior leaders out to the field to show them gaps in the information system. I went down to Fort Jackson, S.C., where the army trains new recruits. We found that uniforms and other equipment that we supply to the recruits in their clothing bags were missing items. [The officers there] didn’t have the capability to input that information into the system to let us know.
We’ve [provided] that now, and in the past two or three months we’ve seen the fill rates for the clothing bags dramatically improve.
What kind of culture shift does your new business model require, and how do you manage that?
In the past, we measured our performance against how much we were buying, against some historically based demand. A major measure of customer satisfaction was whether we were able to immediately fulfill an order, with no regard to the timeliness of [shipping] the order.
Our new [metric] measures our ability to ship in a matter of days. Customers are interested in when they receive their shipments rather than whether we cut a shipping document.
Making this change is tremendously exhausting. As the director of DLA, I take on the responsibility of being the champion for changes and communicating them to the workforce. That involves frequent travel and one-on-one visits with our workforce around the world. The workforce wants to hear about changes from their top leadership, and they want to comprehend what it is we’re trying to accomplish before we expend time and effort to incorporate these changes.
How do you communicate to the CIO and IT department the changes you want?
During the holidays I visited all of our locations in Afghanistan, Iraq, Kuwait and Qatar, where we have small teams of DLA professionals. They’re operating primarily on e-mail and telephones, gathering [orders] and feeding them back to the United States. In every one of those locations, the people asked me, “Could you forward deploy our ERP solution so I can buy [directly]?”
I came back and told Mae De Vincentis, our CIO, that our accuracy, our performance, our responsiveness has to improve because our workforce wants us to respond better. Nobody in the field talked to me about larger [troop size]; nobody talked to me about smaller. They talked to me about better.
Mae has to continually remind her people that their job is not about developing a capability. It is about using that capability. Over the next year or so, I will continue to focus on not just fielding ERP but convincing my workforce that this will allow them to think differently about how they’re going to support [the troops]. They’re not going to sit in their traditional locations. This is going to allow them to move to where our [troops] are and provide better support.
Providing wider ERP access makes it harder to keep the system secure. Few non-IT executives make improving security a priority, but you have. Why?
One thing you get when you go out to where our people are operating is a constant reminder that we’ve got to protect information. I monitor our performance, and so do my partners [who include the U.S. Transportation Command and the military services]. I track and improve performance through training and through systems capability and through new development. Then I take those lessons and I roll them into our new development of information assurance and metrics.
And so it’s a constant cycle of monitoring your own performance and then working that back into new development, training and capability.
Why have you ordered the IT department to focus on wireless technology?
The purpose of our IT shop is to enable our people to link demand to our supply capability. Wireless will become more critical. I’m not just talking about war-fighting operations. I’m also talking about support in natural disasters and humanitarian relief. As soon as the first planes land, we’ll be plugged in.
One of my initiatives this year will be to demonstrate how we can take all the systems in the distribution center in New Cumberland, Pa., one of our largest distribution centers in America, and deploy those people and IT on a training exercise 7,000 miles away using wireless with assured security—and operate immediately.
The Defense Logistics Agency cannot do its mission in the future if it does not focus on moving information so that we can get the right item to our troops on the ground.
Allan Holmes writes frequently about government issues.