NAVSUP and Navy Supply Chain Management

BY CMDR. TONY YANERO, SC, USN
NAVAL SUPPLY SYSTEMS COMMAND

In the Navy, fleet readiness is highly dependent on effective supply chain operations. The Navy’s supply chain operation is much more complex than a commercial vendor supply chain, where the focus is solely on profit. The Navy’s ability to execute its global mission mandates that variables beyond cost and within the logistics lifecycle must also be considered.

Just a few examples of these variables are: operational availability, redundancy requirements, obsolescence barriers, surge capacity, maintenance requirements, and inventory allowancing. Unlike the commercial sector where a company can control or significantly influence most supply chain elements, the Navy supply chain has many independent influences.

Some of the more impactful influences are multiple independent commands, program office decisions, fleet operational requirements, yearly budget decisions, higher echelon guidance, Navy Working Capital Fund requirements, repair process execution, industrial base capability and capacity, contracting, and vendors. When any one of these independent variables makes a decision, there is a ripple effect felt throughout the supply chain. With so many independent variables, it is imperative to communicate and understand the impact these decisions have on fleet readiness and on the other supply chain elements.

Despite these complexities, NAVSUP must ensure our policy supports higher guidance while providing the necessary support and direction to our Echelon III commands. When creating policy, we must account for the many variables in the supply chain that NAVSUP does not control. In addition, it is necessary to have a good understanding understanding of the phases of lifecycle logistics (see graphic) since the decisions made in early phases of the lifecycle have long-reaching readiness and logistics implications.

At NAVSUP Headquarters, the Supply Chain Management Directorate, N31, is responsible for the development of policies and processes associated with the execution of the NAVSUP elements within the Navy supply chain. NAVSUP N31 is divided into eight key process areas, and it is not uncommon to have a subject cross multiple areas of responsibility.

LC graph

Functional Supply Chain Divisions

Planning: Demand planning, forecasting, buy-repair decisions,enterprise resource planning (ERP) improvements, and disposal

Allowancing: Aviation and maritime allowances, appropriated spares account execution, and modeling

Supply Data Management: ERP supply master data, data integrity, and cataloging

Supply Chain Integration: Supply chain cross-functional coordination among systems commands as well as among aviation, surface, subsurface and expeditionary forces

Stakeholder Support: Afloat supply systems, the Chief of Naval Operations logistics support, development and integration of supply policy

Repairables: Commercial and organic repair, process improvement, inter-service repair, and carcass tracking

Order Fulfillment: Requisition processing, ERP sourcing, and supply chain metrics

Material Control: Inventory policy, process and integrity, warehouse management and configuration, inventory accuracy, local requisition processing, receipt management, quality deficiency management, and Financial Improvement Audit Readiness (FIAR) support

Within the basic business areas of responsibility, N31 is also working in conjunction with external stakeholders on a number of longer-term (two- to five-year) supply chain projects to meet fleet requirements and improve fleet readiness. Efforts include updated readiness-based sparing model and instruction, policy and processes for the next generation of RSupply (called Naval Operational Supply System), improved planning within Navy ERP, updated allowance process and documentation, improved data integrity, single national inventory, supply support for Navy Nuclear Deterrence Mission, improved repair processes and metrics, and inclusion of FIAR in everyday processes. As a Supply Corps officer, you interact with Navy supply chain on a regular basis. A working understanding of NAVSUP’s responsibilities, as well as the other elements of the Navy supply chain, will allow you to better articulate mission impact and potential risk. As you progress in your career, the better you understand our supply chain, the more prepared you will be to improve fleet readiness and influence fleet decisions in order to meet mission requirements.

March/April 2017