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Logistics Modernization Program: A Cornerstone of Army Transformation

What began as a plan to modernize Army supply chain management has evolved into one of the largest, fully integrated supply chain and maintenance, repair, and overhaul solutions in the world.

Today, the Army is undergoing an exciting and dynamic transformation. While this transformation is driving the Army’s evolution into an expeditionary force that is agile, versatile, and capable of meeting the challenges of the Global War on Terrorism, a similar revolution is occurring in the systems and processes that support and supply the warfighter.

The Logistics Modernization Program (LMP) is one of the programs that stands at the center of the Army’s business transformation initiatives. The LMP is a cornerstone of the Single Army Logistics Enterprise—an enterprise business solution that will enable vertical and horizontal integration at all levels of logistics across the Army. By modernizing both the systems and the processes associated with managing the Army’s supply chain at the national and installation levels, the LMP will permit the planning, forecasting, and rapid order fulfillment that lead to streamlined supply lines, improved distribution, a reduced theater footprint, and a warfighter who is equipped and ready to respond to present and future threats.

Logistics Modernization Program: History

Before the LMP was conceived, the Army Materiel Command (AMC) depended on ponderous, 30-year-old systems to manage its logistics operations and supply critical equipment and repair parts to the Soldier. These systems—the largest of which were the Commodity Command Standard System (CCSS) and the Standard Depot System (SDS)—evolved into a complex web of software solutions that were difficult to maintain and almost impossible to update to address the Army’s rapidly expanding supply needs.

The lack of a single, unified supply system across the Army fostered an environment in which numerous organizations developed independent configurations of the CCSS and SDS, along with a wide variety of localized software applications designed to support those systems. As a result, the Army faced serious challenges in managing its supply chain and distribution infrastructure.

Because of the lack of financial integrity created by the lack of a single, unified system, it became clear that the Army would not be able to upgrade its legacy systems to comply with Federal directives such as the Chief Financial Officers Act of 1990 and the Federal Financial Management Improvement Act of 1996—laws that were enacted to increase the efficiency and visibility of financial operations across the Department of Defense (DOD). Along with these efforts, the Government Accountability Office published several reports that recommended consolidating DOD logistics infrastructure further and increasing privatization and outsourcing to bolster the efficiency of the Army’s business operations.

Instead of embarking on a massive, customized software development effort that would produce a software solution for current conditions, but that perhaps would not be flexible enough to meet the needs of the future warfighter, the Army decided to implement a commercial off-the-shelf-based, best-in-class enterprise resource planning (ERP) solution to revolutionize the Army’s national-level logistics systems and business processes. This solution is the LMP.

Recently, operational control for the LMP was placed under the Program Executive Officer for Enterprise Information Systems (PEO EIS), whose office oversees large systems integration projects Army-wide. The LMP’s principal beneficiary, AMC, provides expertise in current and desired supply chain business practices to create a winning leadership combination for the program.

The leadership structure of the LMP includes the Deputy Chief of Staff, G–4, Department of the Army; the commanding general of AMC; and the PEO EIS. The Deputy Chief of Staff, G–4, is the Logistics Domain Portfolio Manager. In addition to collaborating with the Secretary of the Army, the program’s leaders also work closely with the Business Transformation Agency, an organization established within the Office of the Secretary of Defense to oversee business transformation across DOD, in order to align the LMP closely with broader Army and DOD modernization goals.

Logistics Modernization Program: Today

The LMP has been fulfilling warfighter requirements on a daily basis since July 2003. Today, the LMP manages $4.5 billion worth of inventory, processes transactions with 50,000 vendors, and integrates with more than 80 DOD systems. The LMP is deployed to 4,000 users at the Army Communications-Electronics Life Cycle Management Command (C–E LCMC); Tobyhanna Army Depot, Pennsylvania; the Defense Finance and Accounting Service; and a dozen other Army and DOD locations. When fully deployed, LMP will support more than 17,000 logistics professionals.

The LMP delivers real-time situational awareness and vastly improved decisionmaking capabilities, and it has significantly reduced logistics operational costs where it has been deployed.

The LMP is one of the world’s largest ERP implementations, leveraging the technology of ERP industry leader SAP to fully integrate the Army’s supply-chain activities. These activities include sourcing and acquisition, production scheduling, order processing, inventory management, transportation, warehousing, and customer service. As a result, the Army is better able to adjust its logistics operations quickly to meet evolving needs.

A Key Piece of a Larger Vision

The LMP does not stand on its own: It is the cornerstone of the Army’s larger vision of integrating business processes across logistics systems Army-wide. This vision is the Single Army Logistics Enterprise (SALE).

The SALE vision is managed at the operational level by the PEO EIS. It has three components: the LMP, the Global Combat Support System-Army (Field/Tactical) (GCSS-Army [F/T]), and the Global Combat Support System-Army, Product Lifecycle Management Plus (GCSS-Army [PLM+]).

As a part of SALE, the LMP will provide the Army with national-level supply chain functionality, replacing systems that manage wholesale inventory control, planning, budgeting, and depot, arsenal, and ammunition plant operations.

GCSS-Army (F/T) will provide all combat support and command and control functions with a seamless, interactive information management and operations system. By replacing 13 current Army tactical legacy systems, GCSS-Army (F/T) will establish the tactical component of an integrated logistics system architecture for an enterprise-wide solution. GCSS-Army (F/T) will incorporate the functions now performed by the following systems and provide warfighters with a continuous flow of timely, accurate, accessible, and secure information

  • Standard Army Retail Supply System (SARSS).
  • Standard Army Ammunition System (SAAS).
  • Standard Army Maintenance System-Enhanced (SAMS–E).
  • Unit Level Logistics System-Enhanced (ULLS–E).
  • Property Book Unit Supply Enhanced (PBUSE).

GCSS-Army (PLM+) will serve as the technical enabler linking the field- and tactical-level system, GCSS-Army (F/T), with the national-level system, the LMP. By serving as a single data repository for logistics information, GCSS-Army (PLM+) will provide seamless interaction between the national and tactical levels. GCSS-Army (PLM+) also will provide a single data interface for logisticians.

Each of these efforts supports the objective of the Deputy Chief of Staff, G–4, to deliver materiel readiness to warfighters by focusing policies, processes, and resources in four key areas—

  • Connecting Army logisticians.
  • Modernizing theater distribution.
  • Improving force reception.
  • Integrating the supply chain.

By eliminating disparate sources of data previously contained in incompatible legacy systems, SALE also will allow the Army to view worldwide operations more easily and redistribute resources to meet evolving needs.

A Closer Look at the LMP

To date, the LMP has offered users benefits in three principal areas—

  • It streamlines the Army’s supply chain processes.
  • It employs an information technology (IT) platform that delivers superior performance to its users.
  • It supports the warfighters of the United States.

Streamlining Supply Chain Processes

The LMP offers the Army’s logistics professionals a robust set of supply chain management capabilities that extend benefits to such functional areas as order fulfillment, demand planning and forecasting, maintenance program oversight, depot operations, and financial management.

Order fulfillment. The LMP greatly improves order fulfillment processes for AMC’s item managers. For example, item managers can use the LMP to verify onhand inventory balances quickly using real-time information from more than one storage depot. They can confirm a requesting unit’s geographic location and mission product code to ensure that the request is for a critically needed item. Then, with a simple click of the mouse, the managers can release all orders instantaneously, without going through the multiple processes and systems previously required by the legacy systems. In this way, the LMP effectively integrates all logistics supply chain operations from suppliers to customers, thereby uniting maintenance activities and inventories in one system and automating support processes for maintenance, repair, and overhaul at the depot level.

Demand planning and forecasting. The LMP integrates enhanced demand planning processes that support a range of forecasting techniques and alerts that immediately identify out-of-tolerance forecasts. For example, the LMP uses “traffic light” settings that alert managers to priority actions they need to take on their portfolio of materials in the manufacturing resource planning process. The LMP also has made it possible for current users at AMC to transition their major-item planning activities from an entirely manual process to an automated supply chain planning solution.

Maintenance program oversight. The LMP provides item managers and project leaders with enhanced oversight of maintenance programs. The system supports improved tracking of labor hours and dollars expended by repair program and integrates detailed, accurate forecasting capabilities for programs partially funded throughout the fiscal year.

The LMP also supports greater collaboration among item managers, project leaders, and item repair facility managers, resulting in more accurate forecasting of maintenance demands and maintenance program execution. A project can be created, funded, transmitted to the depot, rejected, renegotiated, retransmitted, and accepted by the depot in 1 day; most projects are accepted in a matter of minutes. By contrast, these activities previously required 2 weeks to 1 month to complete using multiple legacy systems.

Depot operations. The LMP offers Army users increased functional and end-user knowledge of the Army’s depot operations and logistics processes. The system streamlines materiel and parts requisitioning processes and facilitates the movement of assets between the Defense Logistics Agency and depots. These capabilities shorten the time required to reconcile logistics activities among C–E LCMC, Tobyhanna Army Depot, and other customers.

Financial operations. The LMP effectively integrates financial and logistics operations, meets the requirements of the Chief Financial Officers Act, and aligns with the DOD’s Financial Business Enterprise Architecture. The system merges four Army Working Capital Fund activities into one fund under a single company code organization.

The LMP permits the Army to reduce inventories significantly because logisticians are able to better plan and allocate resources. That ability, in turn, allows the Army to reduce the theater footprint in battlefield operations. Moreover, the LMP complies with the requirements of the Federal Financial Management Improvement Act and supports the full-scope audits of the Army Working Capital Fund needed to achieve a clean audit opinion.

IT Platform Delivers Superior Performance

The unifying component underlying all of the Army’s logistics transformation initiatives is the pursuit of excellence in applying IT to meet strategic goals. IT is the key enabler for mission success in the 21st century, and the LMP has set high standards for IT performance and quality. This Web-based system is easily accessible worldwide and supports the DOD vision of building a global information grid that provides the right information at the right time to the right entity.

From the outset of LMP solution design and planning, the Government and its principal system integration partner, Computer Sciences Corporation, were determined to use technology components that would allow system performance to evolve without the need for significant architectural changes. The LMP also is technologically open, scalable, and secure. Because it uses a common personal computer and Web browser, the deployed LMP solution is accessible worldwide on a real-time basis through the DOD Unclassified but Sensitive Internet Protocol Router Network (NIPRNET). This provides users secure, yet flexible, access to logistics information.

As an indication of the excellence of its technical engineering methodology, the LMP has been awarded a SAP Customer Competency Center certification—a first for a Federal Government implementation of a SAP system. Only 3.5 percent of worldwide SAP implementations, and less than 1 percent of more than 20,000 SAP North America clients, have earned this distinction. The LMP also excels in seven major technology service categories that measure logistics sustainment capabilities—

  • System availability. The LMP exceeds best-in-class standards with 99.98 percent availability. (Gartner, Inc., an IT consulting and research company used by many corporations and Government agencies, specifies a target of 99.50 percent for a best-in-class rating.)
  • System response time. The LMP exceeds industry performance standards by completing 98.5 percent of user transactions in less than 2 seconds. (The industry standard is 85 percent.)
  • Trouble ticket management. The LMP achieved a significant 45-percent reduction in functional-related trouble tickets since its deployment. (A trouble ticket is a method used to track the reporting and resolution of problems.)
  • Interface transaction flow. The LMP successfully processes high transaction volumes without losing data or disrupting business processes. Less than 1 percent of Defense Automatic Addressing System (DAAS) transactions have been rejected since September 2005.
  • Security access. The LMP successfully meets Government standards and regulations, granting system access within target timeframes in 98.5 percent of all cases.
  • Movement of change requests to production. The LMP uses strict change-control processes to validate 100 percent of all change requests, ensuring that they are appropriately evaluated in the production environment.
  • Automated processing. The LMP exceeds industry standards for batch-processing execution, successfully completing transactions in 99.95 percent of all cases.

These results demonstrate the extent to which the LMP delivers a comprehensive logistics information management framework that meets the needs of its constituents across the Army and DOD.

Supporting America’s Warfighters

In streamlining many of the labor-intensive proc-esses involved in using multiple legacy systems since July 2003, the LMP has been making a significant and measurable difference in the lives of troops conducting vital combat operations. The LMP is connecting the foxhole to the industrial base in a manner that would have been difficult to imagine only a few years ago. The result of LMP implementation is that the Army has a system that empowers its leaders to make strategic decisions about logistics operations in real time.

The LMP currently processes 8 million requisitions annually and enables the Army to realize the benefits of a centralized and standardized system. In this way, the LMP delivers a significant advantage in managing Army operations at home and on the battlefield. The LMP also helps the Army reduce inefficiencies and related costs along its distribution system. It reduces the accumulation of excess inventory, eliminates the duplication of requisitions, and increases efficiencies at theater distribution centers.

By replacing numerous nonintegrated information systems and limiting the data inconsistencies and data duplication that result, the LMP makes it easier for logistics professionals to comply with Army supply policies and procedures. By eliminating the need for extensive manual intervention, the LMP reduces the time, funding, and human resources needed to process the millions of transactions the Army initiates on an annual basis.

The Logistics Modernization Program is a pivotal component of the Army’s drive to ensure that business systems and processes remain flexible and responsive to the needs of a dynamic and rapidly evolving expeditionary force. As a cornerstone of the Single Army Logistics Enterprise—the Army-wide vision for integrating logistics business processes from the factory to the foxhole—the LMP provides the functional and technical benefits that bring rapid order fulfillment, improved demand planning and forecasting, streamlined depot operations, and financial visibility to the Army’s supply chain and ensure that Soldiers receive the right equipment and repair parts at the right time.

Every day, the Army is laying a foundation of flexible, scalable, and modernized systems and business processes that will allow logisticians to see requirements, control distribution, and guarantee precise, time-definite support. This is not a vision that can wait until some time in the future. Effective, efficient, and integrated warfighter supply and support are vital requirements now. The LMP is helping to make them a reality.
ALOG

Kevin Carroll is the Program Executive Officer for Enterprise Information Systems at Fort Belvoir, Virginia. He holds a bachelor’s degree and a master’s degree in business administration. He is also a graduate of the Federal Executive Institute and a member of the National Contract Management Association Board of Advisors.

Colonel David W. Coker is the Project Manager for Logistics Information Systems at Fort Lee, Virginia. He was the Project Manager for the Logistics Modernization Program when he co-wrote this article. He holds a bachelor’s degree in business administration and master’s degrees in business administration, procurement/contract management, and national strategic resource management.