Defense Logistics:

Actions Needed to Enhance Success of Reengineering Initiatives

NSIAD-00-89: Published: Jun 23, 2000. Publicly Released: Jun 23, 2000.

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Pursuant to a legislative requirement, GAO reviewed the Department of Defense's (DOD) logistics reengineering initiatives, focusing on: (1) what actions are underway and how complete the Department's plans for reengineering are; (2) what the potential effect of the reengineering effort is on combat forces; and (3) what factors could limit the achievement of reengineering goals.

GAO noted that: (1) DOD has taken significant steps towards reengineering its logistics processes; (2) however, many aspects of the overall plan are incomplete, raising questions about whether the overall goals of improved service and lower costs will be achieved; (3) key steps DOD has taken include establishing a special office responsible for coordinating implementation of the reengineering effort and overseeing efforts to link hundreds of ongoing service-sponsored logistics reengineering initiatives to DOD's overall reengineering plans; (4) DOD has also established 30 pilot programs to test various reengineering concepts; (5) however, it has not developed an overarching plan that integrates individual service efforts into a single DOD-wide implementation strategy; (6) plans to test, evaluate, and fully implement reengineered support strategies DOD-wide by the end of 2005 face a number of challenges, making it unlikely that the pilot programs will be able to provide key information in time to support interim decision-making deadlines; (7) pilot test plans have not been fully developed, in others, test results may be delayed; (8) because many of the 30 pilot programs have multiple objectives, it will be difficult to link results and savings to specific reengineering concepts; (9) DOD has not estimated the total costs of completing logistics reengineering or developed a supporting budget plan; (10) without such an investment strategy, there may not be sufficient funds to adequately test the reengineering concepts being piloted and to implement the results on a DOD-wide basis; (11) it is too early to assess the impact of reengineering logistics support on combat forces; (12) officials representing combat forces have brought up a number of concerns, including the effects of having large numbers of private contractors, on or near the battlefield to provide logistics support, the ability of contractors to meet the surge in demand resulting from intensifying military operations, and the effects of outsourcing on the number of positions available to military personnel returning to the United States from overseas assignments or at-sea deployments; (13) DOD is in the early phases of developing its Joint Logistics Warfighter Initiative test that may be useful in assessing the impact of various logistics reengineering efforts on combat forces in an operational environment; and (14) several factors, if not addressed, could limit DOD's ability to achieve its reengineering goals of improved service and lower costs.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: DOD concurred with the recommendation, stating that the many logistics initiatives underway throughout the Department needed to be fitted together. In commenting on GAO's report, DOD expressed the intent to achieve the recommended integration and overarching plan through the efforts of its Logistics Architecture Office. Since the report's issuance, DOD has developed its logistics architecture (which is now referred to as "future logistics environment") and a resulting Defense Logistics Strategic plan. While the change in administrations has created the need for some additional internal DOD coordination, DOD will begin to implement its new logistics plan during the first half of fiscal year (FY) 2002. Regarding the recommendation to develop an investment strategy for the logistics reengineering efforts within the Department, DOD has reviewed the individual Services' logistics plans during the FY 2002-2007 Program Objectives Memorandum process, in conjunction with DOD's efforts to reduce total ownership costs, to assess whether logistics initiatives are resourced and prioritized correctly.

    Recommendation: To build on and expand DOD's efforts to reengineer its logistics system, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition and Logistics to develop an overarching plan that integrates the individual military service and Defense agency logistic reengineering plans. Among other things, the plan should include an investment strategy for funding the reengineering initiatives and details of how DOD plans to achieve its final logistics system end-state.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: The department did not reassess its schedule for testing its reengineering initiatives. However, regarding GAO's recommendation to establish a methodology showing how much savings or improvements come from reengineering efforts, the Department revised its 5000 regulation series in May 2003, to require that the services conduct continuing reviews of sustainment strategies, comparing expectations against actual performance, and where necessary, revise, correct, and improve sustainment strategies to meet performance requirements. Implementation of the revised policy's requirement to compare actual performance against expectations will achieve the objective of GAO's recommendation to quantify improvements resulting from reengineering efforts. With respect to the part of GAO's recommendation dealing with feedback from combat commanders on proposed reengineering changes, the Department revised 5000 regulation series also requires service agreements between the program manager and the warfighters. The Instruction requires program managers to work with the users to document performance and support requirements in performance agreements specifying objective outcomes, measures, resource commitments, and stakeholder responsibilities. The instruction also requires documenting logistics sustainment procedures that ensure integrated combat support. The revision of the 5000.2 Instruction reflects the department's reassessment of its approach for addressing combat command concerns about expanded use of and reliance on contractor personnel as weapon systems logistics providers.

    Recommendation: To improve the implementation of DOD's logistics reengineering, the Secretary of Defense should: (1) reassess the schedule for testing, evaluating, and implementing pilot program logistics reengineering initiatives; (2) establish a methodology showing how much savings or improvements come from reengineering concept tests; and (3) reassess the approach to addressing combat command concerns about the presence of increasing numbers of contractor personnel on the battlefield, the ability of contractors to meet surge requirements, the potential reduction of rotational slots to meet training requirements, and the overall impact on product support costs and funding.

    Agency Affected: Department of Defense


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