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LMARS Support for Pipeline Measurement Performance

Paul Blackwell

Office of the Deputy Assistant Secretary of Defense for

Supply Chain Integration

March12, 2013

The Supply Chain Metrics Group

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Supply Chain Metrics Group and Contributing Efforts

OSD Priorities for Pipeline Measurement

Supply Chain Metrics Center

Measurable Supply Chain Attributes

“DNA” Chart for each Metric

Upgrading Supply Chain Metrics Center

Way Ahead

Supply Chain Metrics Strategy

• Purpose: Integrate the metrics originating from several Department-level supply chain metrics efforts into a comprehensive set of metrics monitoring the health of the DoD supply chain.

• Objectives: • Establish a framework of enterprise metrics for managing

with measurements

• Develop definitions, secure data sources, and establish data collection procedures for selected metrics.

• Expand or enhance metrics as pipeline measurement improvements are incorporated

• Incorporate enterprise metrics into the OSD supply chain metrics center along with enhanced analytical and reporting capabilities.

Agenda

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Supply Chain Metrics Group and Contributing Efforts

Validate the effectiveness of

measures

Standardize definitions,

measurements &computations

Ensure consistent approaches

Integrate into performance framework

Collaborate with related

metrics efforts

Enable new

measures

CWT

LRT

TDD Compliance

Supply Chain Metrics Group

• Comprehensive Inventory Management Improvement Plan

• Joint Supply Chain Architecture

• DPO Distribution Management (Distribution Performance Reviews)

• Pipeline Measurement

• Strategic Network Optimization

• Business Process Improvements

Ongoing Efforts

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OSD Priorities for Enhancement of Pipeline Measurement

Addressing weaknesses identified as supply chain high risks: Unmet delivery standards and timelines for cargo shipments

Incomplete delivery data for surface shipments

Inadequate RFID to track cargo shipments to and within theater

Lack of common operating picture for integrated distribution data

Development of guidance on implementing performance management

Alignment to enterprise-wide supply chain performance metrics

Lack of performance measures across the enterprise

Tracking of retrograde of materiel

Retrograde Team Report– Sent to the Acting, USD(AT&L) on April 1, 2012

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(S) NMC Rates

(S) Customer Wait Time (CWT)

(L) Order Fulfillment

(C) Procurement Lead Time

(C) Value of Inventory

(C) Excess On-Hand

CWT ToolDrill down into Service CWT records.

LRT ToolDrill down into LMARS and DLA/TRANSCOM LRT records.

LCB ToolDrill down into LCB records.

Strat & SSIR ToolsDrill down into Component inventory records

(DATA SOURCES) LEGEND

(C) Military Services & DLA

(S) Military Services

(B) Working Capital Fund Budgets

(L) Logistics Metrics Analysis Reporting System (LMARS)

(N) Navy

(F) Air Force

(D) DLA

(C) Excess On-Order

(B) Logistics Cost Baseline (LCB)

(C) Supply Availability

(C) NMCS Backorders

(L) Logistics Response Time (LRT)

(S) Repair Turnaround Time

(B) Inventory Turn

(D) Denial Rates

(S) Retrograde Time

Supply Chain Metrics Center

Supply Chain Metrics Center

Metrics to be incorporated(F) Order Response Time

(N) First Pass Effectiveness

(S) Retrograde Asset Write-Offs

(S) Retrograde Over-Aged Due-Ins

(C) Demand Forecast Error

(C) Total Supply Chain Management Costs

(C) Customer Price Change

Analysis Tools

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Metrics StructureDoD Supply Chain Metrics by Measurable Attributes

Attribute/ Outcome

Definition Currently Collected Metrics Proposed Additional Metrics

Standard Not Standard Across DOD

Materiel Readiness

The ability of the supply chain to support weapon systems in undertaking and sustaining their assigned missions at planned peacetime and wartime utilization rates

• NMC Rates• NMCS Backorders

Responsiveness The ability of the supply chain to respond to customer materiel requests according to priority by providing the right support when it is needed and where needed

• Customer Wait Time (O Level)

• Logistics Response Time

• Response Time Effectiveness (e.g. Air Force Order Response Time, Navy First Pass Effectiveness)

Reliability The dependability and consistency of the supply chain providers in delivery of required material support at a time and destination specified by the customer

• Denial Rates• TDD Compliance

• Wholesale Perfect Order Fulfillment (DLA)

• Wholesale Supply Availability

Planning and Precision

The ability of the supply chain to accurately anticipate customer requirements and plan, coordinate and execute accordingly.

• Excess On-Hand• Excess On-Order

• Repair Turnaround Time (D Level)

• Retrograde Time• Procurement Lead

Time

• Demand Forecast Error /Bias

• Retrograde Over-Aged Due-Ins

• Lead Time Variance

Cost The amount of supply chain resources required to deliver a specific performance outcome

• Value of Secondary Item Inventory

• Inventory Segmentation (No Demand 5 or More

Years) ($)• Total Supply Chain Cost

(Log Cost Baseline)

• Total Supply Chain Management Costs

• Tiered Inventory Turns• Price Change• Retrograde Asset

Write-Offs

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“DNA” Chart for Each Metric

DEFINITION IN

POLICY

Proposed definitions were drafted. Upon approval, definitions for CWTOM , CWT for performance budget reporting, CWT for depot maintenance, and order response time will be inserted into DoD 4140.01-M.

BUSINESS

RULES

Proposed business rule for computing mean CWTOM

excludes the 1% of the observations that represent the longest fulfillment times, which may be attributable to data errors and/or extraordinary circumstances.

DATASOURCE All Military Services data sources identified.

OSD DATA

REQUIREMENT

Military Services submit CWTOM records to SCI on a monthly basis and will discontinue submission of aggregate data to DLA Transaction Services for DD2829 report.

GOALS OR

OBJECTIVES

FY2012 performance goals: 15.5 days for Army, 15 days for Navy, and 7.5 days for Air Force.

DISPLAY Supply Chain Metrics Center is being changed to reflect military service year-to-date performance against goals as well as monthly performance.

CHALLENGES AND WAYAHEAD

• Revision of Marine Corps submission to consider orders filled locally –Marines are developing new specifications for collected CWTOM data.• Revision of Army submission to exclusively measure performance only against those orders from organizational maintenance – Army is reviewing use of data from maintenance systems to identify orders..

DEFINITION A measurement of the total elapsed time between submission of a customer order from organizational maintenance and receipt of that order by organizational maintenance.

SUPPLY CHAIN

ATTRIBUTEResponsiveness: Timely receipt of replacement parts by organizational maintenance is key to reducing the time to replace failed parts that are causing a not-mission-capable condition for weapon systems.

BUSINESS

VALUECustomer wait time for organizational maintenance (CWTOM):• indicates how responsive the DoD

supply chain is from an end user’s perspective

• links supply chain performance to the operational availability of weapon systems as the mean logistics delay time (MLDT) factor

CURRENT METRIC PERFORMANCE

• All Military Services are performing within goal• There were no negative trends or anomalies in this performance period.

Source: CWT Tool, outliers omitted.Note: Army and Marine Corps CWT includes all source of supply, Navy includes Navy source of supply, and Air Force includes Air Force source of supply.

Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12

Army 16.9 15.5 15.3 14.9 14.4 13.9 13.7 13.4 13.3

Navy 11.0 11.7 12.2 12.8 12.8 12.8 12.7 12.9

Air Force 6.1 5.8 5.8 5.7 5.8 5.7 5.8 5.8 5.8

Marine Corps 41.5 38.0 37.2 38.5 37.3 32.3 33.5

0

5

10

15

20

25

30

35

40

45Days

CWT – FY2012Military Service Cumulative Year to Date

Official definition for

metric

Relates metric to a

supply chain

attribute

Business value of the

metric

Proposed SC Metrics

Center display

Guidance & pending action

Computational rules

Identifies data

source(s)

Reporting procedures

Applicable goals

Viewing options

Customer Wait TimeOrganizational Maintenance (CWTOM)

A single information resource for all metrics related data

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Logistics Response Time (LRT)

STATUS OF SCMG ACTIONS

COMPLETED PENDING WORKING

FUTURE

DEFINITION IN POLICY

Definition approved for insertion in draft DoD 4140.01-M.

BUSINESS RULES

The measurement of LRT is from the date the retail supply activity requisition is submitted to a DoD or designated commercial source of supply until the date the requisitioned materiel is received and posted in the materiel management system of the requisitioner.

DATA SOURCE

Logistics Metrics Analysis Reporting System (LMARS)

OSD DATA REQUIREMENT

DLA Transaction Services submits LMARS records to SCI on a monthly basis.

GOALS OR OBJECTIVES

TDD standards are used by supply chain providers to evaluate their performance in delivering ordered materiel and do not consider backorder time. However, no consensus exists on how to measure backorder time.

DISPLAY Current display shows Total Pipeline Times and CONUS Segment Times by source of supply, Geographic COCOM, and a myriad of other options.

CHALLENGES AND WAY AHEAD

• Analyzing alternatives for measuring backorder time and to evaluate LRT from a customer’s viewpoint versus a provider’s viewpoint. • Discussing how to handle new LMARS records resulting from BRAC-directed transfer of retail supply to DLA at maintenance depots.

DEFINITION

A measurement of the total elapsed time (in days) from customer requisition to receipt of materiel ordered from a DoD organic or commercial source of supply.

SUPPLY CHAIN ATTRIBUTE

Responsiveness: Timely receipt of materiel demanded from wholesale sources of supply to retail activities and end-use customers is key to DoD supply chain performance.

BUSINESS VALUE

This metric:• indicates how timely the wholesale echelon

of supply and distribution system is responding to their customers – the largest segment being retail activities

• links DoD supply chain performance to negotiated standards for responsiveness

(e.g., TDD Standards)

CURRENT METRIC PERFORMANCE

There were no negative trends or anomalies in this performance period.

CIMIP

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TDD Compliance

STATUS OF SCMG ACTIONS

COMPLETED

PENDING

WORKING

FUTURE

DEFINITION IN POLICY

To be documented in emerging DoD 4140.01-M

BUSINESS RULES

U.S. TRANSCOM rules

DATA SOURCE

U. S. TRANSCOM Strategic Distribution Database

OSD DATA REQUIREMENT

Monthly submission of DPO JDDE Metric Executive Dashboard statistics

GOALS OR OBJECTIVES

85% of deliveries meet TDD standard

DISPLAY DPO JDDE Metric Executive DashboardCHALLENGES AND WAY AHEAD (U.S. TRANSCOM)

•Velocity-focused metric…must be balanced against other efficiency metrics•Efficiency improvements may reduce the velocity causing TDD compliance decrease•Future initiatives must be analyzed as they may alter future TDD Standards or compliance goals.

DEFINITION

The concept that, within a specified degree of probability, the logistics system is capable of delivering required materiel to the customer within a given period of time. As a metric, it measures the count and percentage of shipments that meet the time definite delivery (TDD) standards for a given combatant command and transportation mode. For this metric, backorder time is excluded.

SUPPLY CHAIN ATTRIBUTE

Reliability: The DoD TDD standards provide delivery performance target by combatant command, region within COCOM and transportation mode as dictated by the customer’s priority.

BUSINESS VALUE

This metrics quantifies the reliability of the DoD supply chain in meeting negotiated times when responding to customer requisitions.

CURRENT METRIC PERFORMANCE

Current global performance is below goal.

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Customer Wait TimeOrganizational Maintenance (CWTOM)

STATUS OF SCMG ACTIONS

COMPLETED PENDING WORKING

FUTURE

DEFINITION IN POLICY

Definitions for CWTOM , CWT for performance budget reporting, and CWT for depot maintenance approved for insertion in draft DoD 4140.01-M.

BUSINESS RULES

Excludes the 1% of the observations that represent the longest fulfillment times, which may be attributable to data errors and/or extraordinary circumstances.

DATA SOURCE

All Military Services have established data sources except Marine Corps.

OSD DATA REQUIREMENT

Military Services submit CWTOM records to SCI on a monthly basis and will discontinue submission of aggregate data to DLA Transaction Services for DD2829 report.

GOALS OR OBJECTIVES

FY2013 performance goals are: 15 days for Army and Navy, and 7.5 days for Air Force.

DISPLAY In addition to current display capability, the Supply Chain Metrics Center is being changed to reflect military service year-to-date performance against goals as well as monthly performance. Additional recommendation made by Components.

CHALLENGES AND WAY AHEAD

Complete Marine effort to provide an accurate and complete process for collecting its CWT data.

DEFINITION

A measurement of the total elapsed time between submission of a customer order from organizational maintenance and receipt of that order by organizational maintenance.

SUPPLY CHAIN ATTRIBUTE

Responsiveness: Timely receipt of replacement parts by organizational maintenance is key to reducing the time to replace failed parts that are causing a not-mission-capable condition for weapon systems.

BUSINESS VALUE

Customer wait time for organizational maintenance (CWTOM):• indicates how responsive the DoD supply

chain is from an end user’s perspective• links supply chain performance to the

operational availability of weapon systems as the mean logistics delay time (MLDT) factor

CURRENT METRIC PERFORMANCE

Air Force is performing within their goal, while the Army and Navy are above their goal.

CIMIP

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Inventory in PipelineOverview

DATA SOURCELMARS

BUSINESS RULES (DRAFT)

Inventory in Pipeline is calculated on a quarterly basis, using data from LMARS. The monthly reported value of items shipped (filtered by SOS, customer, Class IX, and IPG) is divided by 90 to get a daily average value of items shipped, and then multiplied by the average quarterly LRT.

DATA REPORTING ORGANIZATION

Logistics Metrics Analysis Reporting System (LMARS)

LEVEL OF DETAIL

Data filtered to include only Class IX, DLA sourced goods, excluding DVDs. LRT numbers are reported by CONUS/OCONUS and by Service.

ITEM POPULATION

LRT and inventory value numbers are reported by CONUS/OCONUS and by Service.

CALCULATIONMonthly reported value of items shipped is divided by 90, then multiplied by the average LRT for the respective month

REVIEW PERIOD October 2009-present

BASELINE FY10

CHALLENGES

• None

DEFINITIONMeasures the average value of inventory that has been shipped but not yet received by the customer

DEFINITION SOURCE

SNO Working Definition

SUPPLY CHAIN ATTRIBUTE

Investment Cost: The amount of supply chain resources required to deliver a specific performance outcome

BUSINESS VALUE

Average Inventory in Pipeline:• Allows SNO to estimate a monetary value to

apply to LRT measurements

Q1201

0

Q2201

0

Q3201

0

Q4201

0

Q1201

1

Q2201

1

Q3201

1

Q4201

1

Q1201

2

Q2201

2

Q3201

2

Q4201

2 $-

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

$140,000,000

$160,000,000

Average Inventory Value in Pipeline Across Services

USAF IPG1

USMC IPG1

Navy IPG1

Army IPG1

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Metrics Center Upgrade

UPGRADING CENTER

A unified platform for:

• Enhanced metric reporting

• Greater spreadsheet integration

• Advanced and flexible data analysis

• Improved information displays & data visualization

• Streamlined user interface

• Simplified customization

• Reduced update cycle

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Way Ahead

Update POA&M for responsiveness and reliability metrics as LMARS is enhanced with pipeline measurement improvements:

Expand or complete metrics

Update procedures for collecting and reporting measurements

Establish or revisit goals for metrics