1. 1 DEFENSE LOGISTICS AGENCY AMERICA’S COMBAT LOGISTICS SUPPORT AGENCY DEFENSE LOGISTICS AGENCY AMERICA’S COMBAT LOGISTICS SUPPORT AGENCY WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT DLA Distribution Suspended Stock Initiatives Supply PRC June 2011

2. 22 Stock Readiness Program is in place to ensure materiel is ready for issue to fulfill customer orders accurately and rapidly. Memo to CDRs - Importance of SR Program Staffing Levels with dedicated SR FTEs Handbook for SR Coordinators Monthly reporting requirements Communications with SR teams Memo to CDRs - Importance of SR Program Staffing Levels with dedicated SR FTEs Handbook for SR Coordinators Monthly reporting requirements Communications with SR teams Refocus DLA Enterprise-wide CPI for ‘L’ Stock DLA Distribution IPTs with Services – Obtain disposition and identify root cause DLA Enterprise-wide CPI for ‘L’ Stock DLA Distribution IPTs with Services – Obtain disposition and identify root cause $1.7 B of J,K,L condition in stock Work open backlog of SDRs w/Disposition Temporary work force at DDSP DLA Supply Center Tiger Teams at DDSP/DDJC $1.7 B of J,K,L condition in stock Work open backlog of SDRs w/Disposition Temporary work force at DDSP DLA Supply Center Tiger Teams at DDSP/DDJC Battle with Suspended Stock Joint Approach to Resolution Stock Readiness/Un-issuable Materiel (CC J/K/L) Un-issuable Materiel Reduce Suspended Stock Background: Large amount of stock that can not be issued due to discrepancies identified by DLA Distribution. Opportunity: Partnership between DLA/Service Supply Chains to gain disposition ( DRMO, PPP&M, etc.) and reduce causes that require stock to be suspended. Benefits: Place materiel back into issuable condition, fill backorders, reduce storage footprint and related handling costs, prevent re-procurement, & increase order effectiveness. Service Supply Chain DLA Supply Chain DLA Distribution J,K,L Dollar Value as of March 2011 Net decline of $300M since Aug 2010 Cleared $31M of Stock

3. 33 The Challenge: $1.48B of Service Owned Materiel in CC J,K,L as of April 2011. Objective: Develop joint IPT with Services to address stemming the flow of materiel requiring suspension, obtaining disposition on Open SDRs/SQCRs and closing at DLA Distribution Center. Endstate: Reduction in new SDRs/SQCRs. Use root cause analysis to prevent future suspended stock – Stop the inflow Obtain Disposition on open Service SDRs/SQCRs DLA Distribution Center working disposition within DoD required timelines. Suspended Stock - Services Importance of Root Cause Analysis for Prevention

4. 44 Key Accomplishments/Events Kickoff meetings held & Raw Data sent for Service Analysis Currently in start up phase: identify right players, define the project objective and analyze. Expect the project will be on-going over next 12-18 months Air Force: April 11, May 31 Army: April 20, May 4 & 18, June 1, 15 Navy: May 11, June 15 USMC: May 25 with next meeting in early July Key Issues/Concerns After First Meetings SDR/SQCR lines of communication - Use of DoD WebSDR/Email/Faxing Use of proper codes and well written comments – Two Way – Original SDR & Disposition Interim Responses on SDRs Multiple touch points within ICPs Unauthorized Materiel Returns Materiel marked for disposal sent to Distribution Center vice DRMO Distribution Centers taking to long to work disposition provided by ICP Suspended Stock - Services AF/DLA Distribution Kickoff Apr 11, 2011 Army/DLA Distribution Kickoff Apr 20, 2011 Navy/DLA Distribution Kickoff May 11, 2011 USMC/DLA Distribution Kickoff May 25, 2011 On-going 12-18 months Dec 2012

5. 5 Project Teams Service/DLA Distribution Suspended Stock 5 DLA Distribution Members Christian Lubic (J4 BA) Terry Seibert (J4 Stock Readiness) Dennis Amrhein (J4 Stock Readiness) Troy Brown (J4 Stock Readiness) Gregory Pigg (J4 Stock Readiness) Joe Manta (J4 Receiving) Rodney Owens (J4 Receiving) J3 OPS Reps depending on Service/Depot Vickie Edgar (DLA HQ) Service Members Teams vary but all have HQ representation and field level reps….. NAVSUP – Ramon Marin Army Materiel Command – Stacey Holden Marine Corp Logcom – MSGT Walker AFMC HQ – Linda Miles DLA Distribution Joint Effort Service Supply Chain

6. 66 DLA CPI L 6 DLA CPI L is focusing on Condition code ‘L’ Litigation materiel – New Procurement Root cause analysis shows packaging, labeling and contract nonconformance - WPM Tiger Teams resolved over $31.5M since last summer. Study will commence on 1 or 2 forward presence personnel at SDPs SCR for interim SDR responses between DLA Distribution and DLA Supply Chain Breakout session at the DLA Suppliers conference to educate customers on why materiel goes into Litigation.

7. 7 DEFENSE LOGISTICS AGENCY AMERICA’S COMBAT LOGISTICS SUPPORT AGENCY DEFENSE LOGISTICS AGENCY AMERICA’S COMBAT LOGISTICS SUPPORT AGENCY WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT