Presentation on theme: "Supply Chain Metrics Strategy"— Presentation transcript:
0 The Supply Chain Metrics Group LMARS Support for Pipeline Measurement PerformancePaul BlackwellOffice of the Deputy Assistant Secretary of Defense forSupply Chain IntegrationMarch12, 2013
1 Supply Chain Metrics Strategy AgendaSupply Chain Metrics Group and Contributing EffortsOSD Priorities for Pipeline MeasurementSupply Chain Metrics CenterMeasurable Supply Chain Attributes“DNA” Chart for each MetricUpgrading Supply Chain Metrics CenterWay AheadSupply Chain Metrics StrategyPurpose: Integrate the metrics originating from several Department-level supply chain metrics efforts into a comprehensive set of metrics monitoring the health of the DoD supply chain.Objectives:Establish a framework of enterprise metrics for managing with measurementsDevelop definitions, secure data sources, and establish data collection procedures for selected metrics.Expand or enhance metrics as pipeline measurement improvements are incorporatedIncorporate enterprise metrics into the OSD supply chain metrics center along with enhanced analytical and reporting capabilities.
2 Supply Chain Metrics Group and Contributing Efforts Validate the effectiveness of measuresStandardize definitions, measurements &computationsEnsure consistent approachesIntegrate into performance frameworkCollaborate with related metrics effortsEnable new measuresOngoing EffortsComprehensive Inventory Management Improvement PlanJoint Supply Chain ArchitectureDPO Distribution Management (Distribution Performance Reviews)Pipeline MeasurementStrategic Network OptimizationBusiness Process ImprovementsCWTLRTTDD Compliance
3 OSD Priorities for Enhancement of Pipeline Measurement Addressing weaknesses identified as supply chain high risks:Unmet delivery standards and timelines for cargo shipmentsIncomplete delivery data for surface shipmentsInadequate RFID to track cargo shipments to and within theaterLack of common operating picture for integrated distribution dataDevelopment of guidance on implementing performance managementAlignment to enterprise-wide supply chain performance metricsLack of performance measures across the enterpriseTracking of retrograde of materielRetrograde Team Report– Sent to the Acting, USD(AT&L) on April 1, 2012
4 Supply Chain Metrics Center Metrics to be incorporated(F) Order Response Time(N) First Pass Effectiveness(S) Retrograde Asset Write- Offs(S) Retrograde Over-Aged Due-Ins(C) Demand Forecast Error(C) Total Supply Chain Management Costs(C) Customer Price Change(S) NMC Rates(S) Customer Wait Time (CWT)(L) Order Fulfillment(C) Procurement Lead Time(C) Value of Inventory(C) Excess On-Hand(C) Excess On-Order(B) Logistics Cost Baseline (LCB)(C) Supply Availability(C) NMCS Backorders(L) Logistics Response Time (LRT)(S) Repair Turnaround Time(B) Inventory Turn(D) Denial Rates(S) Retrograde Time(DATA SOURCES) LEGEND(C) Military Services & DLA(S) Military Services(B) Working Capital Fund Budgets(L) Logistics Metrics Analysis Reporting System (LMARS)(N) Navy(F) Air Force(D) DLACWT ToolDrill down into Service CWT records.LRT ToolDrill down into LMARS and DLA/TRANSCOM LRT records.LCB ToolDrill down into LCB records.Strat & SSIR ToolsDrill down into Component inventory recordsAnalysis Tools
5 Metrics Structure DoD Supply Chain Metrics by Measurable Attributes Attribute/ OutcomeDefinitionCurrently Collected MetricsProposed Additional MetricsStandardNot Standard Across DODMateriel ReadinessThe ability of the supply chain to support weapon systems in undertaking and sustaining their assigned missions at planned peacetime and wartime utilization ratesNMC RatesNMCS BackordersResponsivenessThe ability of the supply chain to respond to customer materiel requests according to priority by providing the right support when it is needed and where neededCustomer Wait Time (O Level)Logistics Response TimeResponse Time Effectiveness (e.g. Air Force Order Response Time, Navy First Pass Effectiveness)ReliabilityThe dependability and consistency of the supply chain providers in delivery of required material support at a time and destination specified by the customerDenial RatesTDD ComplianceWholesale Perfect Order Fulfillment (DLA)Wholesale Supply AvailabilityPlanning and PrecisionThe ability of the supply chain to accurately anticipate customer requirements and plan, coordinate and execute accordingly.Excess On-HandExcess On-OrderRepair Turnaround Time (D Level)Retrograde TimeProcurement Lead TimeDemand Forecast Error /BiasRetrograde Over-Aged Due-InsLead Time VarianceCostThe amount of supply chain resources required to deliver a specific performance outcomeValue of Secondary Item InventoryInventory Segmentation(No Demand 5 or More Years) ($)Total Supply Chain Cost (Log Cost Baseline)Total Supply Chain Management CostsTiered Inventory TurnsPrice ChangeRetrograde Asset Write-OffsSame slide you have seen with a couple exceptionsORT and FPS are rolled under response time effectiveness under Responsiveness as we sort out the outcome of ORT and alternatives
6 “DNA” Chart for Each Metric Customer Wait Time Organizational Maintenance (CWTOM)Guidance & pending actionOfficial definition for metricComputational rulesRelates metric to a supply chain attributeIdentifies data source(s)Reporting proceduresBusiness value of the metricApplicable goalsProposed SC Metrics Center displayViewing optionsA single information resource for all metrics related data
7 Logistics Response Time (LRT) DefinitionA measurement of the total elapsed time (in days) from customer requisition to receipt of materiel ordered from a DoD organic or commercial source of supply.Supply Chain AttributeResponsiveness: Timely receipt of materiel demanded from wholesale sources of supply to retail activities and end-use customers is key to DoD supply chain performance.Business ValueThis metric:indicates how timely the wholesale echelon of supply and distribution system is responding to their customers – the largest segment being retail activitieslinks DoD supply chain performance to negotiated standards for responsiveness(e.g., TDD Standards)Status of SCMG ActionsCompletedPendingWorkingFutureDefinition in PolicyDefinition approved for insertion in draft DoD M.Business RulesThe measurement of LRT is from the date the retail supply activity requisition is submitted to a DoD or designated commercial source of supply until the date the requisitioned materiel is received and posted in the materiel management system of the requisitioner.Data SourceLogistics Metrics Analysis Reporting System (LMARS)OSD Data RequirementDLA Transaction Services submits LMARS records to SCI on a monthly basis.Goals or ObjectivesTDD standards are used by supply chain providers to evaluate their performance in delivering ordered materiel and do not consider backorder time. However, no consensus exists on how to measure backorder time.DisplayCurrent display shows Total Pipeline Times and CONUS Segment Times by source of supply, Geographic COCOM, and a myriad of other options.CIMIPOrient Slide – 2nd from bottom purple line is the DoD LRT. Uptick is always expected due to Medical Prime Vendor data lagging. Should drop ~3 days after receiving that dataUse of TDD standards are goal is a challenge.TDD do not include backorder time.TDD standards differ based on location. Exploring use of weighted TDD standards as goalWe are analyzing how to measure the backorder time and display itBackorder time is not a data element of LMARS, our data source for LRT data. Moreover, dates needed to computed backorder time are not always in the file. The question is what is the best estimate.Challenges and Way AheadAnalyzing alternatives for measuring backorder time and to evaluate LRT from a customer’s viewpoint versus a provider’s viewpoint.Discussing how to handle new LMARS records resulting from BRAC-directed transfer of retail supply to DLA at maintenance depots.Current Metric PerformanceThere were no negative trends or anomalies in this performance period.7
8 TDD Compliance Status of SCMG Actions Definition in Policy The concept that, within a specified degree of probability, the logistics system is capable of delivering required materiel to the customer within a given period of time. As a metric, it measures the count and percentage of shipments that meet the time definite delivery (TDD) standards for a given combatant command and transportation mode. For this metric, backorder time is excluded.Supply Chain AttributeReliability: The DoD TDD standards provide delivery performance target by combatant command, region within COCOM and transportation mode as dictated by the customer’s priority.Business ValueThis metrics quantifies the reliability of the DoD supply chain in meeting negotiated times when responding to customer requisitions.Status of SCMG ActionsCompletedPendingWorkingFutureDefinition in PolicyTo be documented in emerging DoD MBusiness RulesU.S. TRANSCOM rulesData SourceU. S. TRANSCOM Strategic Distribution DatabaseOSD Data RequirementMonthly submission of DPO JDDE Metric Executive Dashboard statisticsGoals or Objectives85% of deliveries meet TDD standardDisplayDPO JDDE Metric Executive DashboardChallenges and Way Ahead (U.S. TRANSCOM)Velocity-focused metric…must be balanced against other efficiency metricsEfficiency improvements may reduce the velocity causing TDD compliance decreaseFuture initiatives must be analyzed as they may alter future TDD Standards or compliance goals.Clarified definition to note that backorder time is not included.Business rules were provided to SCMG.We continue to track this metric but note that it must be compared to other metrics to get the big picture.Still below goal.CONUS Mil Air – Afghanistan, Kuwait and Kyrgyzstan are struggling; hurricane Sandy affected perfomance on East Coast.Hurricane Sandy affected performanceCurrent Metric PerformanceCurrent global performance is below goal.
9 Customer Wait Time Organizational Maintenance (CWTOM) DefinitionA measurement of the total elapsed time between submission of a customer order from organizational maintenance and receipt of that order by organizational maintenance.Supply Chain AttributeResponsiveness: Timely receipt of replacement parts by organizational maintenance is key to reducing the time to replace failed parts that are causing a not-mission-capable condition for weapon systems.Business ValueCustomer wait time for organizational maintenance (CWTOM):indicates how responsive the DoD supply chain is from an end user’s perspectivelinks supply chain performance to the operational availability of weapon systems as the mean logistics delay time (MLDT) factorStatus of SCMG ActionsCompletedPendingWorkingFutureDefinition in PolicyDefinitions for CWTOM , CWT for performance budget reporting, and CWT for depot maintenance approved for insertion in draft DoD M.Business RulesExcludes the 1% of the observations that represent the longest fulfillment times, which may be attributable to data errors and/or extraordinary circumstances.Data SourceAll Military Services have established data sources except Marine Corps.OSD Data RequirementMilitary Services submit CWTOM records to SCI on a monthly basis and will discontinue submission of aggregate data to DLA Transaction Services for DD2829 report.Goals or ObjectivesFY2013 performance goals are: 15 days for Army and Navy, and 7.5 days for Air Force.DisplayIn addition to current display capability, the Supply Chain Metrics Center is being changed to reflect military service year-to-date performance against goals as well as monthly performance. Additional recommendation made by Components.CIMIPNavy Nov is 17.5 days. Highest its been that we have on record ( since FY2004). Aviation count decreased andOrient Slide…year to date average. All within goal for FY12Received initial input from USMC – processing data to determine if data captures CWT for OM.Metrics Center will show both year to date performance as well as monthly performance…Challenges and Way AheadComplete Marine effort to provide an accurate and complete process for collecting its CWT data.Current Metric PerformanceAir Force is performing within their goal, while the Army and Navy are above their goal.
10 Inventory in Pipeline Overview DEFINITIONMeasures the average value of inventory that has been shipped but not yet received by the customerDEFINITION SOURCESNO Working DefinitionSUPPLY CHAIN ATTRIBUTEInvestment Cost: The amount of supply chain resources required to deliver a specific performance outcomeBUSINESS VALUEAverage Inventory in Pipeline:Allows SNO to estimate a monetary value to apply to LRT measurementsDATA SOURCELMARSBUSINESS RULES (DRAFT)Inventory in Pipeline is calculated on a quarterly basis, using data from LMARS. The monthly reported value of items shipped (filtered by SOS, customer, Class IX, and IPG) is divided by 90 to get a daily average value of items shipped, and then multiplied by the average quarterly LRT.DATA REPORTING ORGANIZATIONLogistics Metrics Analysis Reporting System (LMARS)LEVEL OF DETAILData filtered to include only Class IX, DLA sourced goods, excluding DVDs. LRT numbers are reported by CONUS/OCONUS and by Service.ITEM POPULATIONLRT and inventory value numbers are reported by CONUS/OCONUS and by Service.CALCULATIONMonthly reported value of items shipped is divided by 90, then multiplied by the average LRT for the respective monthREVIEW PERIODOctober 2009-presentBASELINEFY10ChallengesNone
11 Metrics Center Upgrade UPGRADING CENTERA unified platform for:Enhanced metric reportingGreater spreadsheet integrationAdvanced and flexible data analysisImproved information displays & data visualizationStreamlined user interfaceSimplified customizationReduced update cycle
12 Way AheadUpdate POA&M for responsiveness and reliability metrics as LMARS is enhanced with pipeline measurement improvements:Expand or complete metricsUpdate procedures for collecting and reporting measurementsEstablish or revisit goals for metrics