E-Commerce Joins the Guard

One of the best-kept secrets in military logistics circles is nestled quietly in the thoroughbred horse capital of the world. In the Bluegrass State of Kentucky, you can find one of the most innovative and creative logistics and redistribution operations centers anywhere—and it is just a "point-and-click" away! It is the Kentucky Logistics Operations Center (KYLOC), located at the former Lexington Blue Grass Army Depot (LBAD) in Avon, Kentucky.

Originally established in 1941 as the Lexington Army Signal Depot, LBAD was closed in 1995 as a result of a Base Realignment and Closure Commission recommendation. Following its subsequent lease by the Commonwealth of Kentucky, the installation was renamed Bluegrass Station and initially was the home of the Retrograde Europe Non-Rolling Stock (RETROEUR-NRS) Program. The program's mission was to receive, sort, and redistribute nonrolling stock that was surplus after the drawdown of forces in Europe during the early 1990's. More than 1,400 CONEX containers of stock valued at over $432 million were received from the Army's stockpiles in Europe and processed through RETROEUR-NRS. Ranging from uniforms and personal supplies to tools and heavy equipment (excluding vehicles), these items were cataloged, reclassified, and advertised on the Internet as being available for redistribution to military units in and outside of the continental United States. This reuse of existing military equipment and supplies eliminated the need to purchase $432 million worth of new items.

As the RETROEUR-NRS program wound down, Kentucky's Adjutant General took a leap of faith. Rather than see a successful operation and all of the lessons learned from it fade into history, he established the KYLOC and created an advisory board of State government and Army National Guard (ARNG) stakeholders to guide the development of its missions.

"Opportunity seldom knocks twice," said the Adjutant General, Major General John R. Groves, Jr. "We had a unique skill set available at a moment in time and an ideal location. We were fortunate enough to recognize it and to truly believe that we could take what we learned through the hard work and innovation of many people, sustain it, and make great things happen. I think the accomplishments of the KYLOC—both the clothing and class IX programs— speak for themselves. The KYLOC benefits Kentucky's citizens through more jobs but, more importantly, the program will eventually positively touch the life of every Army National Guard soldier in the Nation."

Bluegrass Station includes 110 buildings and is home to approximately 50 tenants.

KYLOC's first mission was in partnership with the National Guard Bureau (NGB). Together, they created the National Guard Materiel Management Center (NGMMC), which began as an experiment to provide ground and aviation repair parts to ARNG units across the Nation—all from surplus stocks. Like RETROEUR-NRS, KYLOC proved that computer communication and the Internet are essential in advertising supplies on hand. The Lands' End^® type of real-time Internet catalog and ordering operation, which was unheard of in military circles, is the real key to the success of the logistics programs at KYLOC. For example, if a user needs an engine, he can go to www.ngmmc.com on the Internet, search for the engine by stock number, point and click, and the engine will be shipped to his unit. The best part is that it's all free issue to ARNG units. The order is out the door of the NGMMC and on its way by United Parcel Service or another commercial carrier within 48 hours.

Inspectors at the NGMMC give the "white glove" treatment to a newly arrived 2½-ton truck engine.

In the past, orders went to the depots through the state's U.S. Property and Fiscal Office (USP&FO), where the requested items may have been backordered. Meanwhile, at an installation two states away, there may have been 12 pallets of the same item about to be shipped to a Defense Reutilization and Marketing Office as excess.

The NGMMC provides a central inventory and a central listing. It has "earned its keep" with a $10 to $1 return on investment for the NGB through cost avoidance. Numbers like these have made Colonel Layne Walker, Director of Army Logistics for the National Guard Bureau, a true believer. "The NGMMC has saved the Army National Guard more than $25 million in just 3 short years. That kind of money demands respect, and their efforts allow us to apply those savings against other needs throughout the organization," said Walker.

A recent addition to the NGMMC mission is an organizational clothing and individual equipment redistribution system. This system operates basically the same way as the repair parts system by capturing excess clothing and equipment from within the ARNG system and redistributing it where it is needed.

One of the newest experiments underway at NGMMC is a partnership with the NGB to redistribute slightly used military clothing. Six states are shipping turned-in nonpersonal clothing items to the NGMMC. The items are inspected for compliance with Army standards and, if they pass inspection, they are laundered and redistributed as free issue to the states via the Internet ordering system. As an example, a "class A" all-weather coat that costs around $130 new can be redistributed through the NGMMC program as free issue, making the purchase of a new item unnecessary.

In another partnership with the NGB and the Defense Supply Center Philadelphia (DSCP), KYLOC distributes clothing to ARNG soldiers across the Nation. Until this partnership was formed, the USP&FO in each of the 54 states and territories kept a supply of clothing on hand to meet the needs of ARNG soldiers in the state. While anyone could go to the Internet, order clothing from a commercial vendor, and have it on his doorstep in 7 days, a soldier typically would find his uniform request winding its way up through the state system to the USP&FO and then back down through the system to him in a process that took as long as 45 days. On top of that, the uniform still would need patches and nametapes sewn on before it was ready to wear.

The clothing issue system obviously needed improvement, but no one was quite sure how to tackle it. As it turned out, the framing of the problem pointed to the answer. If customers could go to the Lands' End website, browse their catalog, order items on line, and have them shipped to their home in a matter of days, why couldn't the Guard create a similar system for its soldiers? Using their collective expertise, KYLOC, DSCP, and the NGB soon came up with a solution. The lessons learned from RETROEUR-NRS proved their value again, and the Central Clothing Distribution Facility (CCDF)—a "virtual prime vendor" of DSCP—was born.

Clothing received for the NGMMC recycling program is inspected carefully and laundered before it is issued at no cost to state ARNG units.

Despite some initial concerns by the USP&FO's, the CCDF consolidated its inventories in 54 states and territories into one large stockpile and began receiving shipments from DSCP, which served as the wholesaler. Internet, e-mail, telephone, and fax ordering were set up. Now, within 10 days of ordering, a soldier can have clothing, complete with patches and nametapes sewn on, delivered to him at his unit. This innovative process simplifies life for the DSCP and is more cost efficient for the ARNG. The soldiers benefit from the faster turnaround and greatly improved ordering through a simple point, click, and ship process. Perhaps the most visible value added for the soldiers is that the uniforms already have the required patches and nametapes properly sewn on. Getting this done often proves a challenge for some troops, especially in more rural areas.

This "kitting" concept—having everything a soldier needs delivered to him in one box, ready to go—was an earlier lesson learned that KYLOC was able to apply to the CCDF operation. The value of the improved service may be difficult to measure in dollars, but the concept means one less distraction from the mission for the soldier. The fiscal bottom line is important in today's military, but equally important to KYLOC is how its serv-ices benefit its customer—the warfighter.

A CCDF employee sews a nametape onto a BDU blouse.

Harry Veneri, DSCP virtual prime vendor program manager for the Clothing and Textile Directorate, knows firsthand the potential of this program. "We are estimating that the virtual prime vendor agreement with Kentucky and NGB will save Federal taxpayers over $10 million annually. Now states won't need to spend millions of dollars up front based on anticipated needs for clothing items that end up sitting on the shelves for several months," said Veneri.

KYLOC also has embraced special-issue projects. Perhaps its most far-reaching effort will be the nationwide roll-out of the improved physical training (PT) uniform to ARNG soldiers as a result of a congressional funding add-on. The NGB will pass the funding to KYLOC, which will purchase in bulk from the DSCP and distribute directly to soldiers and units through its CCDF program. This will improve the NGB's ability to manage the roll-out; it also will centralize purchasing, accountability, and reporting rather than dividing the funding into 54 chunks for separate purchases from DSCP. A full one-third of ARNG soldiers across the Nation will be issued the PT uniforms in fiscal year 2001 through this system. Before long, every ARNG soldier who slips into his new high-speed, low-drag PT uniform will thank not only his first sergeant but also KYLOC.

The improvements and experimentation at KYLOC have generated high-level interest from the military logistics community. General John G. Coburn, commanding general of the Army Materiel Command, who recently toured KYLOC, considers it to be on the leading edge of adapting electronic commerce to serve the needs of the military. "The citizens of this Nation expect and deserve not only the very finest trained and equipped military force in the world but also the most efficient. Computer-based electronic commerce is transforming the way the world conducts business. We need to make every effort to adapt these innovations to more quickly and efficiently project supplies and equipment to where the warfighter needs them," Coburn said.

So where does KYLOC go from here? The NGMMC's repair parts project continues to save money, because there are still too many parts within the ARNG that are "washing out" of the system and forcing unnecessary new purchases. Under DSCP's virtual prime vendor program, the CCDF has begun distributing clothing to the Marine Corps Reserve. DSCP personnel, in conjunction with the CCDF, are making proposals to other reserve components. Electronic commerce has joined the Guard, and it is paying its own way with some $35 million saved by KYLOC since July 1997. With that kind of resumé, e-commerce is here to stay. ALOG

Jason M. LeMay is a long-time employee of the Commonwealth of Kentucky's Department of Military Affairs and a former member of the Kentucky Army National Guard. He is a graduate of Union College in Kentucky and currently is pursuing a master's degree in public administration at Kentucky State University.

David W. Altom is a public information officer with the Kentucky Department of Military Affairs and is editor of The Bluegrass Guard, the Kentucky Army National Guard's official command publication. He is a graduate of the University of Kentucky and has more than 13 years of military experience.

E-Commerce Joins the Guard

by Jason M. LeMay and David W. Altom