Defining and Improving Reverse Logistics

by Robert Banks

The Army is paying new attention to the reverse pipeline.  Better management of reverse logistics will make the most of the Army dollar.

    Reverse logistics (RL) has existed in one form or another since the advent of the Army, but until recently it has received little more than cursory examination. So why do Army leaders now want to study RL using the velocity management (VM) process methodology of define, measure, and improve (DMI)?

    Reverse logistics is the timely and accurate movement of serviceable and unserviceable materiel from a user back through the supply pipeline to the appropriate activity. In the past, the Army has placed RL on the proverbial back burner for several reasons. RL is not "glamorous" or "high tech." To the tactician, RL cannot be linked directly to readiness drivers. Few commands include RL as a component in their performance reviews or review and analysis briefings. When a unit initiates an RL action, it seldom realizes any financial benefit from doing so. The list can go on and on.

    In recent years, industry has placed greater emphasis on RL. Ten years ago, literature on RL was uncommon. Today, entire textbooks are devoted to the subject. So why has industry moved RL to the front burner? The simple answer is buying power, or, more correctly, the avoidance of lost buying power; RL makes the greatest and most efficient use of existing resources. In order to maximize the Army's buying power, we too must adopt the same philosophy for the same reasons (though obviously in a different context). Make no mistake, maximizing buying power is the logistician's "ace in the hole."

    Customer wait time (CWT)—previously order ship time (OST)—and requisition wait time (RWT) are the latest performance metrics for determining logistics responsiveness. So why has the Army had difficulty defining and developing performance goals for materiel in the reverse pipeline? The answer is rather simple. RL is like skeet shooting: you always are aiming at a moving target. As a point of comparison, the RL forward pipeline starts at the customer—generally at the unit level—and ends at the same point. However, while RL starts with the unit, it can stop at multiple distribution or maintenance activities in the retail or wholesale
pipelines.

    To better determine the flow of the RL pipeline, the Department of the Army Deputy Chief of Staff, G_4, and the Army Combined Arms Support Command (CASCOM) at Fort Lee, Virginia, formed the Reverse Logistics Process Action Team (RLPAT). This team is under the direction of Brigadier General Jeanette K. Edmunds, the Army G_4 Director of Sustainment, and Tom Edwards, the Deputy Commander of CASCOM. These leaders instructed the team to use the VM DMI methodology to define the RL pipeline process flow. As a result of a series of RLPAT meetings and conferences, a detailed RL process map was identified (see chart on page 4).

When Does RL Start and Stop?

    The immediate questions confronting the RLPAT were: When does the RL process start, and when does it stop?

    The starting point is the Julian date placed on the turn-in documentation at the unit level. To the purist, this date may not be the "true" starting date of the process. However, until we can link the Unit Level Logistics System (ULLS) successfully with the Standard Army Maintenance System (SAMS) and the Standard Army Retail Supply System (SARSS), the Julian date of the turn-in document will have to suffice.

 
The Reverse Logistics Process Action Team developed this map to define the reverse logistics process. The Reverse Logistics Process Action Team developed this map to define the reverse logistics process.

    The ending point for the RL process is infinitely more complex to determine. It either will be when an item is available for issue; when an A5J, Disposal Release Order, has been issued directing an item be shipped to the Defense Reutilization and Marketing Office; or when an item has been received at the maintenance depot. Again, the purist may argue that this is not the true end of the process. But until we can link SARSS successfully with the Depot Standard System (DSS) and Commodity Standard System (CSS), then this too will have to
suffice.

    A detailed review of the diagram will reveal the melding of supply, maintenance, and transportation functions. The system of record from an accountability and financial perspective is SARSS. (Our comptroller friends will argue that the Standard Army Finance and Accounting System is the financial system for RL. However, one needs the input from supply systems to debit or credit our financial systems, which leads to the assertion that the process truly starts with a supply transaction.) However, the developers of SARSS did not account for the disconnects in automated system interfaces among quartermaster, ordnance, and transportation functions. For example, when an unmatched recoverable report shows up on an accountable officer's desk, he will point out very quickly that his maintenance brethren failed to turn in the unserviceable part.

Three Tenets of RL

    From this beginning, three tenets of RL have emerged: predictability, reliability, and visibility. We can predict successfully when a retrograde item will arrive, our prediction is reliable to the 95th percentile, and we have visibility of the shipment throughout the process. With a system in place that can meet these tenets, maintenance personnel can schedule maintenance activities and more accurately order repair sets or kits. Central shipping and receiving personnel also can adjust workloads to handle inbound or surge shipments as well as to schedule outbound trucks or containers more accurately.

    The question now becomes: how do we gain this predictability, reliability, and visibility? The answer is a combination of supply discipline and SARSS data, coupled with radio frequency identification (RFID) technology; both are in use throughout the Army but are nowhere more prevalent than in U.S. Army Europe (USAREUR).

    Supply discipline for all RL operations starts at the unit (customer) or supply support activity (SSA) level. SSA personnel must prepare an Automated Manifest System (AMS) card for each retrograde shipment. Every SSA in the Army currently has this capability. Next, the main support battalion (MSB) SSA or the next higher SSA should have the Defense Logistics Agency "tactical" manifest system installed and operational. It is this system that will gather the data from the SARSS AMS cards and generate a global AMS card along with an RF tag. The Logistics Automation Division of the USAREUR DCSLOG has conducted studies and concluded that trained and competent personnel can create a global AMS card and RFID tag in about 10 minutes from multiple SARSS AMS cards. This truly is a small investment in time to achieve the three tenants of RL.

    These data are uploaded automatically on a regular basis to a central repository. Within USAREUR, this repository is the Freidrichsfeld server located at the Logistics Automation Division of the USAREUR DCSLOG. The Freidrichsfeld server also will send this same information to the continental United States server in Reston, Virginia, and to the Logistics Support Activity (LOGSA) at Redstone Arsenal, Alabama, where the Army's central automated data repository is maintained.

    SARSS automatically sends an electronic copy of all retrograde transaction data to LOGSA, which deposits the data in the Logistics Intelligence File (LIF). Anyone with access to the Logistics Integrated Data Base (LIDB) can view or extract these data. What SARSS does not transmit, and thus what LOGSA does not capture, are the intransit data; that means lost visibility. We can gain visibility of these data by applying already existing RF technology, which is the third piece of the RL puzzle.

One Source for Intransit Visibility

    RFID technology can capture the actual intransit status, so we know the last "gate" a shipment has passed through at any time. This information currently is available through Total Asset Visibility (TAV) as long as we know the document number, the transportation control number, or the RFID tag number. (Each RFID tag has a unique number much like a license plate number.) This information is not passed to LOGSA (and thus the LIF) because LOGSA depends on standard Document Identifier Codes (DICs). To resolve this obstacle and provide one source for complete retrograde intransit visibility would require converting the RFID data into either DIC TK4 or DIC TK6 data. This type of conversion would require a programming change. This is not likely to happen until the Global Combat Service Support-Army (GCSS-Army) replaces the current Standard Army Management Information Systems (STAMIS).

    No one will argue with the point that our weapon systems are more sophisticated, logistically complex, costly, and automated than at any time in our history. No one will argue that components eventually will fail and have to be replaced. And no one will argue that it generally is more cost effective to repair or rebuild these components than to purchase new ones. To this extent, it makes perfect sense that we manage our repair and rebuild programs to maximize our logistics resources. Having and maintaining predictability, reliability, and visibility of the RL pipeline will help us achieve this objective.  ALOG

    Robert Banks is the repair cycle change agent at the Army Combined Arms Support Command at Fort Lee, Virginia, and a member of the Reverse Logistics Process Action Team. When this was written, he was a logistics management specialist in the Support Operations Directorate, 21st Theater Support Command, in Kaiserslautern, Germany. He has a B.A. degree from Ohio State University and an M.S. degree from West Coast University.