Employing Supply Chain Analytics for Logistics Efficiencies

By NAVSUP N4 Supply Chain Management Process Owners

As the Navy’s premier supply chain integrator, Naval Supply Systems Command (NAVSUP) manages value streams that provide material for Navy aircraft, surface ships, submarines and their associated weapon systems. Seamless integration within, between, and beyond NAVSUP-managed supply chain segments, such as planning, repairables, material control, order fulfillment, and allowancing, is critical to satisfying customer requirements. In early 2017, supply chain process owners were challenged to leverage deep process knowledge, collaboration, and data insights to examine the accuracy of the requirements determination process, optimize the system to ensure it performs to goal, and explore how process lead times affect requirements and the ability to provide material.

Each supply chain process owner team took on the challenge, with the support of leadership and stakeholders across the NAVSUP Enterprise. Over the past year, this effort became known as Supply Chain Analytics for Logistics Efficiencies (SCALE). The teams have given visibility to the nuanced and complex workings of various pieces of the supply chain. A broad cross-section of NAVSUP teammates from various HQ departments, NAVSUP Weapon Systems Support (NAVSUP WSS), and NAVSUP Business Systems Center (NAVSUP BSC) lent their time, effort, and ideas to yield both concrete improvements to customer support and identify continued opportunities for process optimization.

Planning

The NAVSUP planning process uses data from value streams throughout the supply chain as algorithm inputs to produce buy and repair recommendations.

The NAVSUP planning team, financial team, and NAVSUP WSS analyzed the current budget process by mapping out the requirements determination process. The team concluded that a subset of the requirement for large increases to levels updates was understated. They determined that a financial report, financial and logistics integrated requirements report (FLIRR), should be used to capture these level updates, e.g., procurement lead times (PCLT) and survival rate (SR). This additional data will allow NAVSUP WSS the ability to request the correct budget dollars in support of the fleet’s future requirements.

Repairables

The NAVSUP repair process responds to repair recommendations provided by the Navy Enterprise Resource Planning (ERP) schedule board, executing over 150,000 repairs per year, across 1,000 suppliers, at $3.28 billion, ensuring ready-for-issue material is onhand to support customer requirements.

The NAVSUP repairables team developed the first strategic repair metric for the commercial, organic, and interservice repair value streams to measure how often ready-for-issue assets are received from suppliers by the original estimated completion date. NAVSUP BSC replicated the Navy ERP data pulls, analytical methodology, and graphical displays in NAVSUP’s Logistics Cell (LOGCELL) dashboard. LOGCELL supports supplier collaboration, as performance is a shared responsibility among NAVSUP and its repair partners.

The repairables team is performing analysis into root causes, leading indicators, and cycle time syncs, and is working with developers, analysts, and repair activities to continue to make constraints visible. Part of this analysis includes simulations to monetize changes in process lead times. Potential solution sets include cycle time reduction efforts within the contracting process and carcass shipping process, and improvements in the piece part ordering process.

Material Control

The NAVSUP material control team is responsible for warehouse management, discrepancy reporting, and inventory accuracy across sites that hold NAVSUP owned material. NAVSUP has established inventory accuracy as one of the top priorities. Although inventory accuracy varies across supply chain segments, overall inventory accuracy is at 90 percent, with a goal of 97 percent by June 2019.

The material control team authored an inventory management plan that dictates inventories be conducted across the NAVSUP Enterprise. All sites must be assessed in a three-year period by performing an inventory on a statistically significant sample size. Any site failing an assessment must undergo a wall-to-wall inventory.

Additionally, material control initiated action to monitor disconnects between inventory accuracy feeder systems and Navy ERP. The team is also developing and executing action plans to improve accountability, including regular drumbeats with external Navy budget submitting offices to share inventory accuracy results and lessons learned.

Order Fulfillment

The NAVSUP order fulfilment team ensures material can be automatically sourced within Navy ERP to fulfill customer requirements.

The order fulfilment team worked with NAVSUP BSC and Defense Logistics Agency (DLA) to streamline support for Navy requirements for DLA-held customer backorders, despite full functionality (lateral redistribution) not being available in the initial Navy ERP rollout.

NAVSUP filled 1,818 backorders valued at $4.06 million by processing records in Navy ERP, leading to improved customer wait time for Navy and other service customers. Automated lateral redistribution functionality is expected to deliver in the May 2018 Navy ERP release.

The order fulfilment team also developed a sourceable/unsourceable metric that the NAVSUP BSC inforM-21 team is finishing in the development environment. The NAVSUP order fulfillment team is reviewing the design and recommending any enhancements to give the desired degree of automated sourcing to Navy Working Capital Fund-owned assets in Navy ERP.”

Allowancing

The NAVSUP allowancing team oversees the modeling process by which inputs, such as configuration data and usage rates, are used to produce allowance products reflecting the range and depth of material customers are authorized to carry. The team reviewed the model and adjusted the price sensitive threshold for inflation, driving a three percent improvement in spares effectiveness.

NAVSUP also established a Joint instruction with Naval Sea Systems Command (NAVSEA) to stand up a review board called the Maritime Allowance Readiness Based Sparing, Reprovisioning, and Change-Review Board (MARRC-RB). This review board is chaired by NAVSUP and NAVSEA and includes both fleet and Office of the Chief of Naval Operations (OPNAV) participation. The MARRC-RB will ensure programs are complying with current policy, OPNAV-approved models are utilized to develop spares packages, and funding is in place to support the spares process. Further, the MARRC-RB will recommend RBS analysis of underperforming weapon systems. The result will be improved weapon system availability, readiness, and efficient and effective use of spares funding. Also, due to NAVSUP advocacy, the outfitting account, which provides initial spares to the fleet, is fully funded at 100 percent in Program Objectives Memorandums (POM) -19 and 20.

Summary

With the command’s focus on cultivating enhancements to NAVSUP’s supply chain to improve customer outcomes, NAVSUP process owners continue to leverage data insights to refine processes and achieve supply chain performance increases. As NAVSUP Vice Commander Michael Madden says, “We need to continue to develop a culture that is always questioning our process and our underlying assumptions, a culture that accepts prudent risks to learn and drive improvements. It is this kind of culture that will find a way to improve readiness and will be a key differentiation for NAVSUP.”

Summer 2018