That's why over 400 of the FORTUNE 500 companies look to United Van Lines for quality service they can
Talking about quality is one thing; delivering it is another. At United Van Lines, we agree with the belief that "you're judged by the company you keep." We've worked hard for more than 40 years to earn our quality reputation and to gain the trust and recognition of Corporate America. But we're still not satisfied. We know that a true commitment to quality is a never-ending process of monitoring customer expectations ... and meeting those expectations better than anyone else.
Let United Van Lines be your total transportation service partner. You'll immediately recognize the quality difference. Call your local United agent. .. or call our World Headquarters at 1-800-948-4885.
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Martin
Ms. Lana R. Batts, Exec. Dir., Interstate Truckload Carriers Con{
Dr. Jerry R. Foster, Associate Professor, College of Business, University of Colorado
COL Norbert D. Grabowski, USA (Ret.), Exec. Ass't., NDTA
Maj Gen John E. Griffith, USAF (Ret.), Transportation Logistics Consul tant
Richard H. Hinchcliff, Consultant
Brig Gen Malcolm P. Hooker, USAF (Ret. ), Member, Board of Directors, NDTA
Dr. Joseph G. Mattingly Jr., College of Business & Management, Univ. of Maryland
Whitefield W. Mayes, Chief Engineer, Transportation Engineering Agency, MIMC
Prof. Gary S. Misch, Valdosta State College Valdosta, Georgia
Dr. Richard F. Poist Jr., Professo1; Transportation and Logistics, Iowa State University
MG Harold I. Small, USA (Ret.), Consultant
COL Joseph Torsani, USA (Ret.), Consolidated Safety Services Inc.
Dr. David Vellenga, Professor of Business, Calvin College
Dr. L. Leslie Waters, Professor of Transportation, Emeritus, Indiana University School of Business
Dr. Clinton H. Whitehurst Jr., Senior Fellow, Strom Thurmond Institute of Government and Public Affairs, Clemson University
Editorial Objectives
The editorial objectives of the Defense Transportation fournal are to advance knowledge and science in defense transportation, the partnership between the commercial transportation industry and the government transporter. DTJ stimulates thought and effort in the areas of defense transportation and logistics by providing readers with:
• New and helpful information about defense transportati on issues;
• New theories or techniques;
• Information on research programs;
• Creative views and syntheses of new concepts;
• Articles in subject areas that have significant current impact on thought and practice in defense transportation;
• Reports on NDTA Chapters.
Editorial Policy
The Defense Transportation Journal is designed as a forum for current research, opinion , and identification of trends in defense transportati on. The opinions expressed are tho se of the authors and not necessarily of the Editors, the Editorial Review Board or the NDTA.
Manuscript Submission
Manuscripts should be between 1,500 and 3,000 words, usually from 6 to 15 double spaced, typewritten pages. Articles or position papers of shorter length are also acceptable. Manuscripts should be submitted on floppy disk (5.25" or 3.5") in most popular word processing programs, accompanied by one hard copy (not a photocopy or dot-matrix print, if possible). Photographs, artwork, and charts that add to the manuscript are encouraged. A color photograph and biographical sketch of the author(s) may be included.
Editorial Content
For all correspond ence including manuscripts and books for review, write:
Joseph G. Mattingly Jr., Editor
Defense Transportation foumal Asst. Dean, Emeritus Van Munching Hall University of Maryland College Park, MD 20742 (301) 405-7163 - Voice Mail (301) 405-0146- Fax (703) 256-3172- Home email-jmatting@de ans.umd.edu
Dr. Joseph G. Mattingly Jr.
lntermodal Surface Transportation Act (ISTEA)
Who needs the reauthorization bill? In my opinion, subsidies should be removed from the bill and user fees be used to fund the infrastructure expenditures to maintain the country's transportation system. I fail to see the necessity to use public funds to subsidize an intermodal industry that is growing for economic reasons. If there were no economic reasons for the growth of intermodal transportation, its use would not continue to grow. One would be hard put to claim that this growth is a result of the original ISTEA. If government aid is needed to make intermodal service grow, then I say we do not need it If economies were not involved, would any of the modes be engaged in the service?
The transportation industry modes have all been promoted by the government directly or indirectly in days past. At this time, potential competition among the modes, technology improvements and the mature nature of the individual modes make it unnecessary for any further government promotion of one mode over another. You cannot use public funds to support and promote one mode without discriminating against the other modes.
Sometimes it is necessary to support the industry infrastructure for national security reasons, i.e. special facilities to support the employment and resupply of committed forces . It would be hard to see an ammunition port being viable economically as an example. The ideal situation would be that the defense forces could be supported entirely by economically sound commercial operations. Of course, we all recognize that supporting one or more military operations around the world would require the movement of large numbers of personnel and large quantities of materials in a short time. These requirements have exceeded and are expected to continue to exceed the transportation capabilities of our economically viable commercial transportation industry.
Public funds should be used to provide these additional requirements needed to support national security. A profitable transportation industry should be prepared to continue to support peacetime and commercial operations. Reengineering of the Department of Defense logistics system with deliveries to the user should aid the commercial transportation industry to remain profitable without direct or indirect subsidies to any one mode. User fees should continue to support the maintenance and provision of the transportation infrastructure needed for a viable transportation system.
I doubt that any mode would cease to exist without renewal of the ISTEA subsidies.
Ideas expressed on this page are solely the ideas of the editor and do not necessarily reflect the position of the NDTA or any other officer or member of the NDTA.
Literary Awards
Congratulations to those persons receiving the NDTA's Foundation Memorial Medal for Literary Merit for the top article and cash honoraria for the top three articles written for Defense Transportation Journal in FY 97. For 1997, the Memorial Medal honors General Robert E. Huyser, USAF (Ret.), a stalwart supporter of NDTA.
First Place-NDTA's Foundation Memorial Medal for Literary Merit ($500 honorarium) "Changing Medical Distribution Practices and the Future of Contingency Support" by George D. Magee.
Second Place-($300 honorarium) "Women in Transportation and Logistics: Contemporary Perspectives" by Peter M. Lynagh, Paul R. Murphy and Richard F. Poist.
Third Place-($200 honorarium) "Limited Wars, Civilian Casualties and Who Must Decide" by Clinton H. Whitehurst, Jr.
Total Cash honoraria awarded in 1996-97: $1,000
Selection Process: Copies of eligible articles, with authors identity removed, were provided to all members of the Editorial Review Board. Members voting ranked articles (best article number 1, etc.) Votes were tallied with the lowest score winning.
Scholarship Awards
In the last issue of the Journal, page 37, we reported on the 12 scholarship recipients of the NDTA's Foundation scholarship program. We know that many chapters have scholarship programs. I am listing three of these that have come to my attention in recent weeks. I invite other chapters to provide me with information about their scholarship activities. My address is on the facing page.
Del-Mar-Va Chapter presented $1,000 in scholarships to three students in August.
Space Coast Chapter issues a $300 scholarship per semester using interest and state matching funds from its over $12,000 scholarship fund.
Washington, DC Chapter presented $5,500 to 3 students (two $2,000 and one $1,500) in August for the 97 /98 academic year.
fold page so point meets point "b "
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1residen ' s Cornerr
LTG Edward Honor, USA (Ret.) President
The NDTA 52nd Transportation and Logistics Forum and Exposition was a tremendous success by all measures. I wish to thank the 1,389 conferees, 143 exhibitors, keynote speakers, moderators and panelists for contributing to that success. Events sponsored by our corporate members were again top-drawer and produced funds for the NDTA Foundation
This issue of the DTJ is dedicated to recording the proceedings of this Forum for historical purposes and to share the program with our thousands of members who did not attend . As you know, a Forum such as ours requires a tremendous amount of coordination and people to make sure that events run smoothly. I wish to publicly thank the San Francisco Bay Area and San Joaquin Chapters for their support of the Forum and Exposition. I also want to thank our 18 volunteers who supplement the NDTA staff each year in many critical areas of the operation.
This was an election year and I wish to welcome three new members to the NDTA Board of Directors, Mr. Charlie Kohl, as Vice Chairman, Council of Regional Presidents, Mr. James Henry, Chairman of the NDTA Military Sealift Committee and Mr. Gary Hartter, Chairman of the NDTA Surface Transportation Committee. All are longtime members of NDTA and have been extremely active in the Association. I look forward to working with Charlie, Jim and Gary in the months and years ahead. At the same time , I wish to thank Paul Merwin, former Vice Chair, Council of Regional Presidents, Bob Blackwell and Larry Sur who chair ed the Sealift and Surface committees respectively for the past four years. They did a superb job at organizing and addressing key issues of impor-
tance to our government/industry partnership .
Our A-35 participation was great again this year. I am delighted to see that supervisors are permitting these young transporters to attend and expand their knowledge in transportation and logistics. I believe that in the mid- to longterm you will see the value added in your organizations-so continue to allow them to participate.
I am saddened to announce that just prior to the start of our Forum, on 22 September, General Robert E. "Dutch" Huyser, a staunch supporter of NDTA, died of heart failur~ at the David Grant Medical Center, Travis AFB, CA. I have extended condolences on behalf of NDTA to his family.
The Military Traffic Management Command Symposium and the NDTA Exposition will be held in Denver, CO, at the Adams Mark Hotel from March 2 to 5, 1998. Additional information will published sho1tly. I hope to see you there.
The NDTA European Region Transportation Conference will be held in Rotterdam, The Netherlands , from April 25 to 29, 1998. Detailed registration information may be found on page 69 of this DTJ.
Our 53rd Transportation and Logistics Forum and Exposition will be held in Houston , TX from 24 to 28 October 1998 . This October, I met with the planning committee of the Houston Chapter and I can assure all of you that we are off to an excellent start. The hotel we are using in Houston can accommodate all of our conferees. Start making your plans to attend.
In closing, I wish to thank all of our members for their support during 1997 and hope that you hav e a healthy and happy Holiday Season.
customers in more than 80 countries worldwide. Whenever we're needed and whatever we carry, we deliver total quality transportation.
We're proud to be partners with the Department of Defense in supporting the nation's defense strategy.
Co-Keynote Speech
Gen Walter Kross, USAF Commander-in-Chief, USTRANSCOM
Commander, Air Mobility Command
Good morning. It is a pleasure for Kay and I to be with you here at the NDTA Forum in Oakland.
It's a pleasure for me to be co-keynote speaker with my good friend and a critical partner in what we do, Mr. Tim Rhein. As CINCTRANS, I've looked forward to this Forum for a long time so I could have an opportunity to talk with you about some things that are very important and exciting. I want to talk about the value of NDTA, what TRANSCOM is now doing as we partner with NDTA and industry, strategic relationships with industry and lastly I want to discuss this year's theme "Transition to a Focused Logistics. 11
The value of NDTA-there is no organization like NDTA. This Forum, the largest in [NDTA] history, is the centerpiece of our years' activities and will yield very much for us in the months and years ahead. To be sure, NDTA is a true professional organization, a true professional center of gravity for national defense transportation. But it is much moreNDTA solves problems. That's what we do together as friends, partners and professionals. Today, I can say without any reservations that our country can carry out its national military strategy because we have an NDTA and it works. It's functional, effective and innovative. Just two seminal examples: the NDTA's Airlift Committee gave us the Civil Reserve Air Fleet and more recently the NDTA Sealift Committee has given us the Voluntary Intermodal Sealift
Agreement (VISA). But I can point to many examples where NDTA made defense transportation more effective and efficient in peace and war. That is because NDTA facilitates at the strategic, operational, tactical and contracting level. No other nation, indeed no other element of the Department of Defense, enjoys this catalyst that is NDTA, its competency, commitment and commitment of its members to its government and industry partners pulling together. NDTA does this for all of us. NDTA's committees are like engines that propel DoD forward by infusing creativity, innovation, teamwork between industry and government, the exploitation of technology, ideas and total commitment. No challenge is too great; no action is too small. NDTA is the ultimate bridge-the role model professional organization. Its leaders and you the members commit to this endeavor to make National Defense Transportation better. You've succeeded by many measures, because America's defense transportation today is preeminent in the world because it's built on the professional partnerships that NDTA creates. I'm lucky. All of us at TRANSCOM are blessed because we are the major benefactor of NDTA's good offices. We enjoy the direct focus of its outstanding committees, panels and boards. We ask NDTA and they deliver quickly and on target. No other CINC enjoys this integrated CINC-NDTA industry teamwork.
At TRANSCOM, things are humming. They've been humming for a year and it's getting even more exciting each day. We run the command on three main themes: never take your eye off the primary customer-the warfighter; prepare now and operate effectively in the 21st Century; and the continuous improvement of all the critical processes associated with the defense transportation system. At TRANSCOM, we know we must be efficient to be effective. Everyone knows the three
Editor's note: This article is a summarization of a presentation made at the 1997 NDTA Forum in Oakland, CA. NDTA regrets that due to audio difficulties on site, some portions may be missing or incomplete.
main themes, their roles and the stake they have in those themes. At TRANSCOM, we produce at that strategic, operational and tactical level and we provide value at all levels. It's best described like this-in peace, as you know, when it comes to defense transportation, we've got ten pounds to put in a five pound bag and in war, we have a two-war strategy and it's supported by a one-war capability-that is defense TRANSCOM's capabilities. Two wars in a one-war capability; done by the inherent agility of transportation forces. But also done through this partnership is smart planning and even smarter agile execution-that's how it gets done in teamwork with the services and CINCs and our great OSD policy partners, led by Mary Lou McHugh. As we look below that one war capability and find incredibly that it is only 28% active duty, another 30% guard and reserve and where is the rest of it-it's in the cutting edge transportation corporations that make America great todayLandstar, FedEx, APL, Sea-Land, CSX and the list goes on. That's where it resides and it's through partnerships in peace and transition to war that brings all that to
from now our mission will be the same. Why? Two reasons-human behavior and the laws of physics. Human behavior will always create Pol Pots, Saddam Husseins and Muammar Qaddafis and we'll have to go and clean up the mess. Laws of physics because there will always be floods, hurricanes, earthquakes and people will have to be helped. Indeed we're very proud that our nation has high technology military forces in all branches of the service. It is good that we have B2s and cosmic precision-guided munitions that can target people on personality traits and DNA codes. I was only kidding. But with NDTA's help and partnership, we will always have that enduring mission where we have to go to some corner of the world and land on a dusty airstrip or sail up to an austere port and someone from USTRANSCOM or someone it carries will get off a plane or ship and put a meals ready to eat into the hand of a starving child. That mission will not change and that's why we are strategically important to our country and to the world.
Today, I can say without any reservations that our country can carry out its national military strategy because we have an NDTA and it works. It's
functional, effective and innovative.
With NDTA's help all the way, the table. In taking it to the next level, USTRANSCOM creates readiness and we are readier than we have ever been to carry out our mission all the way down to the ready reserve force thanks to MARAD. In creating that readiness, we move people and things as a by-product in peace and we leverage commercial industry's participation. In the process, we recover through rates, 80% of our annual operating dollar. No part of the Department of Defense creates that kind of wartime punch, flexibility and capability. That is value to the taxpayer and
mankind.
Our mission at USTRANSCOM is an enduring one. You can find advice and quotes on military transportation all the way back to Sun Tzu, Frederick the Great, Napoleon, Nathan Bedford Forrest, Erwin Rommel, Dwight Eisenhower and more recently John M. Shalikashvili. Defense transportation has written and continues to write tremendous music in this area. Harkening back 50 years to the Berlin Airlift, Vietnam and Desert Shield in its one year transportation war that was unmatched by anything in human history. Even last year, Desert Strike, when we went to modify Saddam Hussein's most recent behavior, was the longest air strike in history and was enabled by USTRANSCOM's KC- lOs and KC- 135 tankers. Two weeks ago, eight C-17s flew from Pope AFB, Ft. Bragg to Kazakstan and airdropped 540 paratroopers from the United States and our allies. Over 20 hours, multiple refuelings on target to the second and drawing over 2 million pounds of gas from KC- lOs and 135s all done with no aborts-100% reliability. The longest such airdrop in history. Today, two large medium speed RO/ROs are on station in the Persian Gulf in the preposition mode and 17 more are behind them coming down the waves. The beat goes onnew tools, new technology, but believe me twenty-five years
TRANSCOM and our OSD policy partners are streamlining the DTS as never before. Propelling us forward with process improvement tied to new organizations, great initiatives with industry and practical application of technology. One example of process improvement is what we call cost driver process or cost driver VTC that we hold in TRANSCOM, which in Harvey Penik's words takes dead aim at our
costs and expenses. In nine months of this enterprise, we've shaved $125 million dollars out of our global transportation costs and we see much more ahead. "Direct benefits to our customers"we learn this from our industry visits that were facilitated by NDTA's Transportation Advisory Board, its capstone board. We've infused this critical process into TRANSCOM's components and they have caught fire. We believe 1998 will be even more exciting in this area. We now have new organizations within TRANSCOM that are built around the improved processes-process first, organization second and it's paying off. Our Joint Mobility Control Group QMCG) puts all the critical transportation requirements in TRANSCOM's Mobility Control Center for smart heads-up execution from one single clearinghouse, tasking the right component for execution. Our Joint Traffic Management Office (JTMO) that resides in the Military Traffic Management Command adds a service intermodal super-storeness to our intermodal operation for door-to-door service, maximum cost avoidance for our customers, high leverage decisions and thrifty contracting that pays real dividends for everyone; and then there's TRANSCOM's new business center-solid evidence of our intent to insure business aspects are fully and properly inculcated in TRANSCOM's stewardship of the defense transportation system. Headed by Mr. Frank Weber, who by the way is a member of the second panel. The center stood up in June as
part of TRANSCO M's operations and logistics directorate and we've incorporated customer support, pricing and rates, assessment standards, business practices, functional areas relating with acquisition all pull together into this center. Frank Weber has spent weeks working on his presentation so I should be careful not to tell you much or he will be up all night rewriting his presentation and we don't want that to happen. The business center focuses on developing optimal strategies to meet our evolving customer requirements and acts as the command's center of excellence for implementing best industry practices. Again, the business center conceived through our NDTA link. It's clearly evident that many of the business. practices in commercial industry cut across all modes of transportation-air, sea, land and express delivery. We've needed a center like this and its time has come and applies to USTRANSCOM, its components and the DTS. All that such a center should do. We believe another key process's time has come as well the link between our new business center to NDTA so we can draw from NDTA
even more efficiently on the commercial business practices and standards. And again the NDTA leadership has jumped on this and has taken that challenge. These improved processes, new organizations and NDTA-fostered industry partnerships have led to a fistful of new initiatives in the DTS over the last year. Ideas like worldwide express, air mobility express, a CRAF-like ]LOTS Ooint Logistics Over the Shore), a specialized surface carrier CRAF-like concept, reengineered household goods and POV programs, more effective collection, billing and payment, streamlined ship vessel operations, the new uni-
pull all of it together so it works in peace, but more important, in crisis and war.
TRANSCOM's relationships with industry are critically important. They are strategic in the total sense of the word. Recalling theme one-support to the warfighter above all else. That means that TRANSCOM is in the business of insuring capability to meet warfighting needs on time. We leverage peacetime DoD business to insure commercial industry's capability is there in war. In doing so, as we work with our industry partners, we favor long-term relationships, stable ones in both directions. We favor dealing with transportation asset owners and corporations that consistently deliver capability while meeting high standards of performance. Consistent proven performers-we view this as a two-way street. We seek readiness, consistency, performance in peace and war and we're willing to pay for it and share total visibility of our emerging requiremen ts as well. That's what best value means for
We adapt our policies to a changing world, write our contracts on best value and underpinning all of this is something no other country or entity really has with its industry partners-the element called strategic trust.
versal service contract and many more. These are the items that are going to be discussed in the panels.
The Military Traffic Management Command led by MG Monty Montero, Military Sealift Command led by Vice Admiral Jim Perkins and Air Mobility Command led by myself and with the help of LTG John Sams, are hotbeds of new initiatives always feeding off industry success facilitated by NDTA. Then there's the Global Transportation Network (GTN), our capstone command and control and ITV system. It went operational last February and now supports over 5000 user accounts and is still growing rapidly. It's powerful, functional, ready and it works today in contingencies and peace around the world. Springboarding off what we've learned and what we see emerging within our industry's leaders information and business support systems, we're charging ahead with GTN customization and direct commercial feeds; and that's going to maximize ITV into rapidly expanding sectors to include direct vendor delivery. Our GTN goals match our overall strategy-listen to the customer, watch the cutting edge commercial industry successes and field functionality before the customer knows he needs it. Write the business rules to
USTRANSCOM and its components. We adapt our policies to a changing world, write our contracts on best value and underpinning all of this is something no other country or entity really has with its industry partnersthe element called strategic trust. Focusing on the theme "Transition to a Focused Logistics," a very righteous and worthy theme this year. The operational concept as detailed in Joint Vision 2010 is a blending of transportation, logistics and information technologies. Several of us here today were present at the crafting of the words that are in focused logistics. I'd like to give
credit to MG Charlie Cannon who is not with us here today, but was very important in writing this, and LTG John Cusick and his team who have taken this to a new level in implementation . John will tell you more about that. The focused logistics concept is ambitious, a cutting-edge construct requiring continuous improvement of our critical processes to properly exploit existing and emerging technologies. Those words should sound familiar and in an area in which the private sector has excelled for a number of years.
So NDTA's Forum will lead to a sharing of knowledge and experience as we synchronize focused logistics to our goals in support of theme one-the warfighting CINC. We are also fortunate to have LTG John Cusick, the Joint Staff expert on focused logistics, chairing that first panel discussion. As Bill Lucas pointed out, John and the members of his panel will provide a much more comprehensive look at focused logistics and I encourage you to be there.
Before I turn the podium back, let me say how proud and excited we are at TRANSCOM to be part of this NDTA enterprise. We, the nation, and all the world are better for it. Thank you.
Co-Keynote Speech
ThankMr. 1im Rhein President
and
CEO
APL Limited
you very much, Ken [Gaulden], for that glowing introduction. I'm very grateful. I also want to acknowledge General Kross. I'm absolutely thrilled to share this Forum with you. As he said, we've worked very well together and have a great personal regard for each other. I must say that when General Kross referred to personality and DNA testing and then kind of sloughed it off and said it was a joke. I'm not so sure. I remember 30 years ago when I was in the military-I believe they got a hold of my DNA and probably a personality test from somewhere-when the Colonel that I worked for asked me what other skills I had for civilian life and the rest is history.
I do also want to welcome you to Oakland. This is the home of our corporation-right across the street. They probably didn't tell you when you signed up for this Forum that it's summertime in Northern California. This happens every year and the heat is not unnatural. So if you thought you were getting away from the heat by leaving Washington, DC, Guam or someplace, welcome back.
My comments today are going to be r e lated to logistics primarily on the surface side . My knowledge of air logistics is very limited. I learned a long time ago not to wander too far into areas I don't know much about But surface is huge and I think we ' ll have a good time talking about that. The best example l can give you of where logistics is going, before I get into the details of my talk, is something that happened to me personally just this morning. I read the sign outside the ballroom here and it had my name listed and it said CEO of American President Lines. That's true and the program says CEO of APL Limited You might say, well what's the difference? There's a big difference. American President Lines is a po rt-to-po r t ship operator and APL Limited is a logistics company. I am continually hounding our peopl e to u se APL Limited because that's the future. American President Lines is a wonderful shipping company but that's all it is and the future belongs to the logistics provider. Some of the examples that I will use today will be based on my APL experience. I apologize in advance for using examples that are restricted to our company. But I want to say that any example I present is certainly applicabl e to other shipping, intermodal or logistics companies including the US flag carriers which are the greatest innovators in the world and have been for the last 30 years.
We're very proud to be here to present our story and
that of other logistics providers. Celebrating our 150th anniversary next year, we're one of the oldest transportation entities in this country. Of course, DoD represented by TRANSCOM, is our single most important strategic business partner; and at the dawn of the new millennium, it is very appropriate that this theme from the CJCS Joint Vision 2010 must be consistent with ours and we must be consistent with theirs.
"Transition to Focused Logistics" (TFL) is the vision statement for the 21st Century at DoD. At APL, our vision statement for the 21st Century is in perfect sync with TFL. We want to be a global integrator of all links into the seamless supply chain. I'm on record, and have been for quite a while in the shipping industry, feeling very strongly that the 21st Century is not only going to encourage but require global carriers to be extremely logistics oriented and if they are not they will become a commodity like a shipping company which does not differentiate itself in any way and certainly does not work toward the seamless supply chain. In our view, managing the seamless supply chain is equivalent to focused logistics and results in focused logistics. How does it happen? That 's what I'm going to talk about now. Under the seamless supply chain, there are four weapons: the speed of decision making, integrity of process, strategic relationships and the holistic approach. I am going to go into these in a little bit of detail.
Speed of decision making-information technology for fast accurate data; elimination of unnecessary handoffs, links and steps; concurrent work replaces sequential work; and people connected or related, not isolated in silos. The integrity of process, reducing cycle time, improving reliability, eliminating loss damage and improving efficiency and highly measured at all times. Precise processes further reduce overall cycle time. Predictable outcomes increase reliability Reduction in loss and damage preserves resources and measurement and gives standards for continuous improvement. What gets measured gets done and if it doesn't get measured it quickly lapses into the old pattern.
Strategic relationships are important. We can be a customer-vendor and have our backs to each other and just do the bare minimum to improve the supply chain; or we can have tested partnerships and the key word here is tested. We can all promise the moon . All the logistics vendors, shipping, railroad and trucking companies will promise you a whole lot of things that either they won't or can't deliver. So when we get into a relationship of this nature, I feel very strongly that testing has to be done extensively and measured Customer-vendor relationships historically have been narrow and conflicting. Partners sharing information, risks and rewards, to me,
equals an intimate relationship and partnerships tend to focus on core competencies. There are some things, admittedly a lot of things, that our company does not do well and there are a lot of things other companies do very well. As an example, we had a trucking company about 4 or 5 years ago that had 800 or 900 trucks-a pretty good size, but we didn't know how to do trucking so we sold it. Now we have strategic relationships with several dozen truckers across the United States, Canada and Mexico-works very well. Now as long as we had our own trucks and didn't know much about it, we kept trying to make that trucking company successful to the detriment of other businesses. So core competency is important, and I think there are certainly core competencies in DoD that should be capitalized on within DoD. There are core competencies outside the DoD where the relationship can be strong, tested and measured that will provide a better product.
The holistic approach to the supply chain addresses the entire supply chain which includes several modes of transportation. We're talking about
boundaries or borders. We don't know where the next need will be. We try to anticipate but there are places in this world where we don't go or other carriers don't go and we have to be prepared to make that switch very very quickly and we should test that in advance. Combination with domestic transportation is critical. The biggest waste in our transportation system today is the transfer from railroad to ship.
A 21st Century provider of the transportation supply chain has some critical success factors-use of information. By using the four weapons I addressed earlier, the 21st Century transportation partners for DoD must exhibit specific behaviors aimed at achieving DoD critical elements of success. They are the ability to partner, ocean services, efficient terminals and connections, intermodal capability, accurate and timely customer service 24 hours a day and broad capabilities-all links to the supply chain.
So core competency is important, and I think there are certainly core competencies in DoD that should
of lading issuing and tracing of goods around the world. Satellitebased computers give real-time cargo movement with container by container along the West Coast and centralized and standardized customer service and documentation around the clock. be capitalized on within DoD. There are core competencies outside the DoD where the
relationship can be strong, tested and measured that will provide a better product.
and if our will is in the right direction and we partner appropriately we can use that information to reduce our costs both for the carrier and the user or the customer, in this case the DoD, and improve efficiency. And of course, partnering with complementary providers.
The critical success factors-right logistics, customer, and the right time. It is difficult to create the right logistics from scratch. So the more experience we get, the more things we do, the more capable we become. We must have real-time knowledge of course. But that's going to continue to develop as the relationship improves. Supply chain control, from the industry to the foxhole, that's where we're falling down today. We are treated modally and we don't have the information that we need to change that. But I think you all heard General Kross-the future is in information.
In combining to get the best value to the soldier in the foxhole we must have an efficient use of resources so that we can keep the cost under control. There are tremendous opportunities in dealing with DoD on equipment, storage and time that's tied up with boxes and other ship assets in dealing with the DoD large parcel freight. And finally, we must have global and domestic reach. The total value chain does not have
We believe the APL website is the leader in our industry today. This is really designed to make our products so much easier to use for customers. Paperless access to schedules, services, rates, booking capability, bill broad-based logistics expertise, improving cycle time, reducing loss, eliminating hand-offs, eliminating inventory and using equipment more efficiently. You need an infrastructure with assets and equipment and continue to invest in that, but the most important of all, is information technology. I'm fond of saying in public forums and even within our company that for the 21st Century our company will be about half moving of goods and half moving of information. Because with information you have power, you have knowledge,
We are involved in a number of strategic partnerships. There are many companies that have the same type partnerships. Let me address a few of the companies we are doing logistical work with in the United States and each relationship
is different. For example, with Toyota we are running a rail ramp, operating a steel coil warehouse, trucking within a 100-mile radius of the plant and final inspection on the Toyota Camry. Toyota liked it so much they asked us to do it for the Lexus at 13 different ramps around the United States. Chrysler saw it and asked us to do it for them. So one thing does lead to another when you try something new, and it is all based on what the customer needs. With DuPont and Allied Signal we're routing all the truckload chemical deliveries throughout the United States. It was our DuPont experience that led Allied Signal to ask us to do that for them. This is only a partial list of how customers have figured out that there are some things they do well and some things they don't. And if you don't do it well, you have to face the decision of either learning how to do it and spend money to get involved in a little misdirection of your corporate goals or you get somebody that can do it probably better and cheaper. That analogy applies just as well for DoD. I'm sure that Polo/Ralph Lauren could care less about transportation and they've decided that's some of the stuff they don't want to do.
We are the Trans-Pacific leader, 40 vessels of 84,200 TEU capacity, largest Trans-Pacific carrier, have extensive feeder services throughout Asia, the Middle East and the subconti-
nent of India and Pakistan, various container sizes from 20 to 48 feet internationally and up to 53 feet domestically, and we are very reliable. Our reputation has been that way for quite a few years. We have alliances with our competitors which is the newest wave of improving service and reducing costs. We're in with Orient Overseas, Crowley, WanHai, TMM (Mexican company), MITSUIOSK Gapan) plus Neptune Orient Line and Hyundai out of Korea will be joining us shortly, I believe.
In terms of terminal efficiency, the connections and hand-offs are tremendous cost drags and a tremendous opportunity for reentry of data into a different system. Every time you touch data, the chances go up geometrically that you're going to foul it up.
So eliminating those hand-offs and connections is critical and we have taken the initiative here with our new San Pedro terminal of 235 acres of ondock rail, the largest terminal in the western world. It has capability for three full double stacked trains being loaded or discharged simultaneously. So both railroads, the BNSF and the UP, can run right onto our new terminal. It also has capacity to move one million loads a yeaL In Seattle, we've done the same thing, only smaller.
combination of the ability of our company and then combining it with another company that has complementary skills.
The holistic approach really ensures systemic and not piecemeal control. Again on the surface business, ocean, rail and truck transport is even more than a pipeline or bulk movement, begins and ends with a truck. So we must conquer that one as well. Consolidation and distribution expertise-most of the large carriers in the world operate a consolidation company. It's very important in the supply chain because it takes multiple vendors' goods and consolidates into one container or several containers So you can eliminate the reworking and distributing out of the back of a container when you get to the destination and deliver whole container intact.
Under the seamless supply chain, there are four weapons: the speed of decision making, integrity of process, strategic relationships and the holistic approach.
We will effectively in 1998 eliminate trucking to the inland rail ramps. They will be loaded onto our terminal.
In terms of intermodal operations, very very critical for seamless service. We have the largest stack train network in North America-250 departures a week. In Canada and Mexico our alliances there, again back to core competency, we don't want to be a railroad we just want to hire them, Union Pacific, Conrail, Norfolk Southern, Canadian National, Ferrocarriles Nadonales de Mexico and a large number of high quality trucking companies. Again, a variety of container sizes up to the very popular 53 footer 110 high trailer and a very large chassis fleet located all over the United States, Mexico and Canada for the quick transfer from rail to highway-another connection
In terms of customer service, this is where the rubber meets the road in my opinion Not only information but its the quality of what you do physically. It must be highly measured using statistical process control, root cause analysis and surveys of your customers. We've centralized customer service from 17 United States locations to two-one in Denver and one in Atlanta. Always available, standardized procedures and again the consistent theme, information technology.
Global reach-we must cover the geography necessary to meet global contingency requirements. Decades of international experience under diverse conditions in our industry and we certainly have capabilities of operating efficiently in North America. APL has just recently expanded into Asia, Europe and Latin America and we expect next year to be in the Trans-Atlantic trade. I think we've demonstrated an awful lot of this capability in partnership with another carrier during the recent Cobra Gold experience where we had one shipload of military equipment going to the Thailand and back. As I understand, it went well without a flaw. So it's a
All those clients that I discussed with you previously are customers of ours on the logistics consulting and analysis side and every one is different. The biggest part of understanding how to do consulting and analysis is to determine the needs. You have to go through a long probing examination with the client to find out what he really needs, not what he thinks he needs; and again, the consistent theme for the future is
information technology. The worldwide web, internet and software capabilities of today are unlimited and I suspect they will become even more spectacular in the 21st Century. If we're going to truly bring logistics to where it should be for DoD in the 21st Century, information is critical.
We do have a history of trust, innovation and results in the relationship between the carriers and DoD Going back to 1991 when all or mostly all the sustainment for the Desert Storm was provided by American flag ships with intermodal and terminal connections. After that, VISA was born, the Joint Planning Advisory Groups and Quality Councils including the Executive Working Group and Cobra Gold-a complex test for a war-time partner. In 1998 we're ready for more.
In terms of focused logistics, the DoD vision is focused logistics. I believe we're consistent with that and must all work together to achieve the elements of focused logistics. Fusion of all links in the supply chain, rapid crisis response with minor tweaks, track and shift assets enroute in realtime, deliver custom logistics packages and make strategic as well as tactical decisions and solutions That's important because strategic, as General Kross said, is absolutely necessary for us to cut through the short-term goals and issues and take the long view as to what a partnership is really about
So the final thoughts. DoD demands are only the beginning. To be successful, we must understand all links in the supply chain. Provide seamless transportation solutions both macro and micro and partner with our customers for trust, satisfaction and enduring relationship. In peacetime, getting the right stuff to the right place at the right time with the right price is the challenge and it's a serious challenge. In times of contingency, the supply chain will be seamless only when partners working together are truly capable, already tested and thoroughly trust-
KEYNOTE SPEECHES Dialogue Session
JEFF CROWE, GEN WALTER KRoss AND TIM RHEIN
Crowe
Both of your opening comments were invigorating and certainly visionary and we'll see if we can add a little bit of substance underneath. Tim, I would like to start with you. I found many of your comments on point. Perhaps we can help Walt with the following kinds of thoughts. As you've pointed out, there have been significant efficiency gains in the US transportation private sector and it is clearly driven by logistics providers and interestingly in your comments some with direct access to assets, some reached to assets through contractual relationships which I think Walt tried to discuss. If that's the driving force in the private sector and I believe has really sustained a lot of the US economic prosperity. With all that setting and the consolidation that's occurring in all the modes, what would be your advice? What would be your lesson learned to help Walt make those decisions as he tries to address those in his command?
Rhein
It seems to me that you have to go through the core competency exercise and decide what it is you do either very well or that you must do yourself for security or military purposes. Once that decision is clear then you can start to entertain asset based companies. I always prefer the asset based company because they have a pretty good stake in the action or non-asset based and do the same testing and evaluation. Then after you've done enough of that you give it a try and take some risks.
Crowe
Walt, transitioning off that question and answer. Certainly the word core competency and you've addressed that. But how do you see that coming together? A mission critical question for you?
Kross
Very important. There's probably some folks out in the audience and we occasionally get a GAO analyst who says, why aren't you more like FedEx? To which we say, we don't want to be like FedEx. We want to partner and play the
strengths of FedEx, APL, CSX or Landstar, whatever it is so that we can use their efficient infrastructure at best value in partnership. So you're not only doing it in peace but we have the seamless transition to war. We want to be the organization that organically only holds assets that are necessary to do things that the cutting edge transportation corporations in America today, cannot do; like fly to Antarctica on 72 hours' notice or launch a VIP mission into Hanoi or Pyongyang or fly to Winhook on a humanitarian mission. We prefer not to work too hard. We prefer to let our contractors work hard so that our customer gets the best value.
Crowe
Walt, you're sounding more like my customers. I should say more like my private sector customers. Walt, staying with that, I think Tim and I could certainly share with you some real tricks. Tim talked about information systems and certainly we'd all agree that's critical. But I find that there's a step before that and it would be how do you affect culture change. And if anyone is steeped in culture change certainly the DoD is. How do you see changing the present audience and that audience that isn't here that they represent and more importantly how do we change the minds of the younger officers and the enlisted people because unless they become true believers I don't think we'll get there?
Kross
That's a very good question. At the strategic level, we must become an information system first and then a transportation activity. If all we think about is transportation we're going to remain hidebound modal not very responsive to our customers' needs. We live in an information age and it's very important that we exploit the information. That's why we say things like we want the loadmaster to be the information master, want to put barcodes on everything-everyone in this room needs a barcode or we're not happy, transmit the data before aircrafts taxi. You've got to have that kind of culture change. Like Tim said in his remarks, to get the power of information to really transform yesterday's transportation organizations in the Department of Defense into tomorrow's.
Crowe
Tim, lets stay with that point. You've outlined a lot of experiences that your firm has gone through and being a keen observer of what's going on in your industry and related industries. How did you deal with some of the culture issues and build more true believers at APL or firms of the private sector that you admire?
Rhein
It's a lifelong challenge that will not stop in my opinion . There are several things that need to be done: 1) you have to provide resources that are viewed as equivalent to other resource demanders, 2) assign good people to those functions so that it's perceived to be important and the most important of all and has been my both good and bad experiences is that the leadership of the organization has to walk the walk and talk the talk. Because if its just a project du jour or politically correct appeasement of some other agenda, it'll be so transparent to the people that your're trying to affect. It has to be sincere. Frankly, it's very very clear that General Kross is going to lead that charge with TRANSCOM and that 's why I'm so hopeful and very confident that this is going to work because the leadership is absolutely critical and if it isn't there, everybody knows it.
Crowe
I concur, but I want to stay on point. Walt, if we even make the assumption that there are true believers here or we're getting more true believers here. How do we build, if I can use the words better, wider, faster road systems and bridge practices to the command and then beyond the command to the fighting commands? How do we get everybody into port?
Kross
All pulling together as a team within NDTA is a very important first step. This organization that creates strategies that lead to tactical successes for our customers in places like Bosnia and around the world. We must make sure also that everybody is truly educated on what can be done today, what's going to be possible a year from now and even beyond that, so that they understand the possibilities. We talked earlier about our young people. We need to listen to our young people. They have our best ideas, they are at the point of contact, they know what is necessary, and we need to inculcate those ideas and combine them with a clear strategic vision as to where we need to go and then to follow through with resources, capitalization and strong top-down support.
Crowe
Tim, back to this word that clearly is in all modes-consolidation. Certainly you have firsthand experience. As you look out, whether you would care to comment in your particular modes or other modes. How does that consolidation move forward and how again do you think Walt should view that? How critical is that?
Rhein
You're referring to the consolidation in the industries?
Crowe
Right.
Rhein
Well, I think economics are going to really control that. There will be more consolidations over time and I know you ' ve seen that in the trucking industry. We're seeing it in the railroad industry almost to the point of concern on the part of some customers and shippers. We're going to continue to see it in the ocean industry. It's good and bad. There is going to be some efficiency, improved service and cost reductions. But the question is when you reach the point of no return in terms of flexibility and having more than one vendor. And that would be the concern that I would see. But we haven't gotten there yet. We have a long way to go and part of the relationship that I believe we're talking about recognizes that vendors have to reinvent themselves Because we're dealing with assets and so if we understand the strategic partnership and provide enough resource for the partners to continue to reinvest in business. That's an investment in the future. We can all play the short-term game to fill up our assets or use them in different places, but eventually the lights go out because your assets die.
Crowe
Let me stay with that. I think absolutely the critical question that you wrestle with. Who will provide the assets in the future? Tim, I think you said something that's on point. That asset ownership and the utilization of assets which was traditionally provided by private sector. Do you think that can change? I mean we're starting to see ownership of assets given over to a system and no one has greater surge requirements than you do. Some of those assets can be used during peacetime in a system and then moved out so you get a return. What are some of the thoughts that you would have around that, Walt? Either traditional or just maybe beyond traditional?
Kross
Well, the most innovative thing that we've done recently is how we developed an entire set of processes and partnerships around the VISA (Voluntary lntermodal Sealift Agreement). We bring our strategic partners into the requirements and planning on the front end, security clearances and everything so that is a true end-to-end partnership. Not only so we understand what is going on in peacetime but so industry understands where the demands are going to be , at what places and what time. That's what we call the long-term relationship. That's what we call stability. It's also the kind of thing that is built on what I said in my remarks-strategic trust. Dealing with companies who have assets or can produce assets in a proven way to high standards consistently.
Crowe
Agreed. What I would draw out that Tim and you certainly talked about it. To put some meat on the bones of Walt's statement, that means, and I'd like you to go through that again. How to move those assets and use them to test the system better during peacetime? Is that really one of the keys to all of this?
Rhein
I think so. WeH we just completed one. We've done two in the last two years. I forget what the name of the one that was up and down the coast where three companies cooperated to do it-APL, Sea-Land and Matson. And the one we just concluded in Thailand-Cobra Gold, where we moved the goods from the northwest with cooperation of Matson, transferred them in Korea and delivered them on time, all war materials (tanks, that sort of thing) to Thailand and returned on time. We need to do more of that. Because what's important to understand is that we're basically a liner operator. Which means it's really not conducive for us to take our ships out of regular service-they're on a day of the week, every week type of service. So it's critical not to disrupt that unless we have to. But there are other assets, ship, terminal and train, that can be used to test, demonstrate and measure our capability. We're not restricted to what we do on a day-to-day basis.
Kross
What Tim is talking about is Turbo Intermodal Surge, an annual exercise that we do and will continue to do Also Turbo Challenge, another kind of exercise that we do in support of warfighting CINCs. And then Turbo Cads, the ammunition mode of it all and we will continue to fund these and do annually. We can learn a new set of lessons every time we take that concept and apply it to different set of partners in a different part of the world.
Crowe
Walt, maybe a little laborious, but I would like to stay with this question Last year, Dr. Hamre spoke to this Forum and he stated that DoD had reached a high watermark in their budget. Your Command has been at the forefront in developing GTN, developing Intransit Visibility and other capabilities. Focused logistics as articulated in the Chairman's Joint Vision 2010 is a tremendous concept with which we all agree. Question, same one, going back to building bridges utilizing all of NDTA as well as your command. Could you comment again on how you feel we can better bring the fighting commands to become believers in this system? Do you think there's anything that the NDTA could do that you envision to help you with that?
Kross
Well, the best way for our warfighting customers to have even greater confidence today than they have in
USTRANSCOM is in all of it's forms. When they see USTRANSCOM, they see a single face, but we know that it includes active guard, reserve and our commercial partners all working together as a team. The best way for them to feel even more comfortable is to give them the information early, deliver on what the information promises for them in maximum reliability and true seamlessness in these kinds of exercises. We spend upwards of $250 million a year on exercises that are funded through the JCS to do these kinds of things. What we need to do this is to move from an age of set peacetime routine movements that just appear to be tangential to the main focus of the exercise or operation and rather put up front the aims, goals and objectives of strategic and theater deployments and deliveries and highlight those to the customer so that he understands the goals and performance standards we're trying to hit and then follow through with the metrics and brief and show him how well we did as a industry-military partner.
Crowe
Terrific. Next I would like to move into briefly to a subject I heard you both speaking about in slightly different ways. Walt, you were talking about the criticalness and you kept referring to process over organization. I heard you use that term and I think that is right on in everything to what we do to a game we love called golf that we get a whack out of and where we worry about score and not process. To that point and staying with that, Tim, I'm going to come over and ask you that question. You discussed a wonderful list of customers who have entrusted, I believe, that to you. They've given you the process. You used the example of Polo/Ralph Lauren. Where do you see collectively, if you can both comment, where that process begins and ends in the national defense transportation and logistics systems of tomorrow? How far can Walt trust you or should he trust the private sector with that process? And then Walt, the same question.
Rhein
Well, one of my favorite quotes, one of the few that I remember, was when Ronald Reagan said to Gorbachev, "trust but verify." That's very appropriate. I think that if I were in General Kross' position I would trust up to a point but I'd have to see the data, the results and the reliability and whether the ultimate user-man or woman in the foxhole, the supply sergeant, the mess cook or whatever-is getting what he needs, whenever he needs it and the right quantity.
Crowe
And before I go back to Walt, those firms and others I've mentioned have trusted you with that process and you do all that without the redundancy that's built into this system. Is that correct.
Rhein
Yes, if you don't, you're not accomplishing anything. We've got to eliminate all the hand-offs, paper, different sys-
tems and people in the middle It's a long-term process. But if you start with that as a goal and take it one step at a time and measure and verify that the partnerships chosen do what they say there going t o do and do it consistently and that you're costs, recycle time and inventory are reduced then you can move on to the next opportunity.
Crowe
Right on. Walt, hold these thoughts and hand off.
Kross
Well this is not theory for us, this is daily practice. We pay a lot of attention to the performance metrics of our commercial partners in how well they do against the standards that we lay down for customers. Our customers give over to us at USTRANSCOM a tremendous global wide ranging mission and they give over that entire competency to us and they expect us to be their broker, so to speak, to make sure that all these things get done correctly, everything from on-time delivery to the quality of service. It is not uncommon whether we're talking about air or surface that some of our commercial partners don't meet those standards while others exceed them beyond our wildest expectations. But those who don't meet the standards, we meet with them to try to motivate them and if we do not get the response we need we move on through contractual processes to proven consistent high performers. That's what best value is for us.
Crowe
I agree. Tim, in the closing few moments that we have. You mentioned, again staying with this word process I think was behind. I think the comment you made was we meet with our customers and we try to get to the point to tell, advise or counsel them choosing the word by personality probably to what they need. Not what they think they need being the operative words. The private sector has arrived there and I think part of that is getting rid of pride of ownership. If you could share with the audience on how you get firms, or approach that, and then I'm going to come back to Walt and ask the same kind of question and, how does he get over that hurdle of pride of only written here?
Rhein
Well, you're right. It's a very tender area. Because you are challenging the status quo . What we have historically done is spent days with the client industry, usually the top people And start with a clean piece of paper to what they're trying to accomplish. What's they're goal, mission, and vision? When you start working from the end backwards the process looks entirely different than what they're doing today and if you can get them to buy into that then you can start designing software, install technology, process owners or managers as opposed to the present structure in order to make that process work and then measure.
Crowe
So Tim, just staying with this point. Really a number of very distinguished firms have entrusted you talking about managing I believe certain ramps and ports for Toyota Camry. If I can properly characterize that. They aren't checking with you on a daily/weekly basis. What are the standards you set internally to accomplish the goal of delivering product when and if how they do that? They entrust the process to you?
Rhein
Not entirely. Matter of fact, Toyota's one of the more difficult ones. They measure everything every day. They not only measure what we do they measure our competitors that are moving goods to the plant in Georgetown and they blame us when their goods aren't there. Which is only fair.
Crowe
Walt, just trying to conclude with that. Again, how do you see or where do you see present process? Maybe if you could comment a little more on process over trusting private sector with to provide greater assets and issues. A concluding remark. Where do you see that now and maybe over the next few years?
Kross
Well, first our customers have their own metrics. They grade us every day and we need partners who can deliver for our customers. As our DoD assets are modernizing, they are also shrinking and it causes us to find partners in industry who can perform and perform very very well. So this is something that we spend a lot of time on. Taking time standards of performance and using them to shape where we are going. We want to be an organization that lives every day on what I call agile metrics. Metrics that allow us to understand whether performance is waning or waxing even before the customer calls us to tell us that and by understanding industry's ability by company to do this kind of work well. That's where we think the greatest opportunities and possibilities are for our industry partners.
Crowe
Terrific. Walt, I want to give a very personal thank you to you and Kay for coming here and sharing your insights. First of all, I'm sure the audience and I are deeply appreciative of that and is helpful to our understanding. Now we can build those roads and bridges. And thank you, Kay, very much for spending the night on an airplane. So Walt thanks Tim, the road was not as long to arrive here but nonetheless your insights I think were extremely helpful for this audience to hear how a man of your distinct capabilities and accomplishments view today's and tomorrow's world.
Ladies and gentlemen, thank you.
Walt and Tim, thank you.
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(left to right) MG William N. Farmen, USA (Ret.), Consultant, International and Multi-International Logistics; Frank Kile Turner, VP Field Operations, CSX lntermodal, Inc.; Roy Willis, Principal Assistant Deputy, Office of the Under Secretary of Defense (Logistics); LTG John J. Cusick, USA, Director for Logistics, J4, The Joint Staff (Panel Moderator); Edward J. Krajca, Director, Logistics, Chrysler Corporation; Randy Clark, Managing Director, Global Logistics, Emery Worldwide, ACF Company.
Editor's note: This article is a summarization of a presentation made at the 1997
due to audio difficulties on site, some portions may be missing or incomplete.
ITG John Cusick, USA Director for toghtics, f-4
TIie Joint Staff
LTG Cusick , the panel moderator, op e ned the session by providing an overview of Focused Logistics from the Joint Staff persp ective, specifically as it is stated in the Chairman of the Joint Chiefs of Staff's vision for the 21st century. JV 2010 contains four basic tenets: Precision Engagement, Dimensional Protection, Dominant Maneuver and Focused Logistics.
To synergize these four tenets, information superiority is required and the co-evolution of joint doctrine, agile organization, training and education, enhanced material, innovative leadership and high quality people. The information has to be fused, and this is absolutely essential, through the Global Combat Support System (GCSS) . The six tenets of Focused Logistics are information fusion, multinational logistics, joint theater logistics command and control, joint health services support, joint, agile infrastructure and joint deployment and rapid distribution . We are doing this through GTN (Global Transportation Network), GCSS (Global Combat Support System) and GCCS (Global Command
Control System ), with GCSS and GCCS eventually coming together in one system. We need to achieve multinational asset visibility, improve UN and NATO logistics and refine bilateral agreements. In terms of rapid distribution of supplies, we need to have aJ-LOTS Ooint Logistics Over the Shore) capability that can operate in seastate 3 (SS3), so that we are not tied to or limited by the availability of port facilities in a theater of operations. With all the work we have put into sealift capability we don ' t want this to be a constraint. Other systems which will help the military manage information are TCAIMS II, that will be the joint system that will track units ITV (intransit visibility) and TAV (total asset visibility) will feed into GTN and tell us where the supplies are. The Global Combat Support System addresses the warfighting process, the sustainment process and the weapon system life cycle process. We are looking for one picture , one net, any box, anywhere, in terms of operation of this system. We are looking fo r a common operation environment, a DoD intranet to sift through the cybernet, but it crosses a number of different functional areas (personnel, logistics, finance, acquisition, medical, and other) a nd
ser v ice stovepipes, and we have to make all of that talk.
Th e fact that logistics is one of the four tenets, shows the chairman's interest in logistics and the importance of it So it is important that we logisticians are in JV 2010, and we need to remember that we are serving the war fighter; Focused Logistics is a combat force multiplier We often talk about getting into a theater of operations, but we don't talk about getting back. I'm not so sure that getting back isn't harder than getting in and there's another little facet that's not obvious and that's forward deploying from a forward location (Europe to the Persian Gulf), which brings about a whole host of problems. We really need to continue to work and think through how we do these things. Another issue is the Integration of Operational Capabilities. As a CONUS-based military it is important that we can get organized, go through mobilization stations and the like and deploy from CONUS. All the services have ways and programs now underway to do that in the most efficient manner. And then to mov e into that theater through a program that w e 're calling joint reception staging, onward movement and integration ; how do you get all of this
NDTA Forum in Oakland, CA. NDTA regrets that
stuff together in a most efficient way and move it forward to the tactical assembly areas, and to bases? The ability to tie these systems together and to know what's going on is not any different from what's going on in the commercial industry today. In fact we're using much of the same products. You will hear more later about multinational logistics, but is absolutely critical. We work for CinCs (Commanders in Chief) around the world and they only talk in terms of multinational operations, so we must make that work. Joint Theater Logistics Command and Control really means having management information available at a level higher than all the services, to better and more efficiently manage a battlefield. GATM (Global Air Traffic Management) is a system which deals with air traffic safety. As more commercial airliners are using the primary routes, military aircraft are lacking the modern avionics to fly these routes, so that needs to be fixed, and we also need to fix the enroute infrastructure in terms of fuel systems, fuel storage and other base improvements. Much is being done in that area, but more funds are needed to meet the requirements. There's a whole range of technology breakthroughs we are interested in; we need your thoughts on how to move things better, smarter, faster all the way from high capacity airlift to ultra fast sealift. The right kind of communications, the right kind of security for all of this data, and your industry's touching all of this because you face much the same problems, and we are very very interested in your thoughts. Focused Logistics is a living document. We will continue to look for information and dialogue to improve the process. Phase II of Focused Logistics, which we are starting now, is going to be kind of 2010 and beyond. We have been exercising and testing Phase I of Focused Logistics. The next big exercise is Positive Force '98 and that's 16-24 October. That will be a big mobilization exercise and we'll get to practice some of these concepts during that exercise.
Mr. Roy Willis Principal A.ssistant Deputy Under Secretary of Defense (f oxhtics)
As we move into the 21st century, the Department of Defense (DoD) will be looking at Focused Logistics to support agile combat. DoD will see a leaner infrastructure and workforce, will look at optimized business practices based on class operations, better utilization of commercial logistics providers, lowering sustainment costs while maintaining high readiness, all this enabled by highly integrated information systems that both control and provide readiness and cost visibility.
Fuel requirements impact distribution and training requirements. Consumption is driven by design and usage, and can be influenced to some extent in the life cycle of a system. Ammunition requires a tremendous infrastructure, such as industrial base, storage, maintenance, strategic lift, intheater distribution. Lethality drives the size of the infrastructure. The more lethal the munitions the less wear and tear on the infrastructure, including delivery systems and platforms. Maintenance has a tremendous impact on the infrastructure. It is the most labor intensive cost driver, and that brings us to manpower in general. At the end of FY '96 DoD had the following personnel in its logistics infrastructure, by functional category: 600,000 military and 40,000 civilian maintenance people; 200,000 military and 65 civilian supply people; 75,000 military and 5,000 civilian transportation personnel. With some other categories we wind up with some 1,140,000 people working in logistics in DoD, active military, National Guard, Reserve, and civilians. Add to that, base operations, training, recruiting, housekeeping, and that number swells again. We have been working on reducing this workforce. In 1993 there were 201,000 people in the working capital fund work force and post-QDR we will end up with about 90,000. That will be a 58% reduction . We will reduce the remainder of the work force by about 20% during that period, all through downsizing, outsourcing and privatizing.
Cost is the driving factor here. As an example, a military mechanic, grade ES, when we factor in recruiting, training, pay, allowances, benefits (medical) costs about $75,000 per year. Add to that, infrastructure and other costs to support him or her, it is another $40,000. With leave, holidays and other demands on the mechanic's time, it costs $149 per hour for him or her to turn a wrench. While these people are very expensive, they are also very necessary in some areas. So, we need to build better reliability in our weapons systems, to cut down on maintenance time, and outsource maintenance when and where it is appropriate.
Another area we have seen considerable improvement on is order-ship time, through EDI and direct vendor deliveries. The Defense Personnel Supply Center, and specific depots, have done great work in this area, with
Joint Theater Logistics Command and Control really means having management information available at a level higher than all the services, to better and more efficiently manage
a battlefield.
innovative processes such as dedicated deliveries, I.M.P.A.C. cards, flexible ondemand manufacturing contracts, regional contracts for installation support material, and the like. This results in reduced inventory requirement. In Fort Hood, as an example, they were able to reduce NSN line item stockage by 50% over a two-year period. Other installations have had similar experiences and our objective is to get every installation in the US on this path. The use of l.M.P.A.C cards for micro purchase has also been increasing.
The three main drivers of the DoD logistics infrastructure are fuel, ammunition and maintenance. As regards life cycle costs, of the three top CAT I programs in DoD life cycle costs, two
of them are transportation systems. The top one is the C-17, that has the highest life cycle cost of any CAT I program. The next one is the new attack submarine, and the third one is a new family of trucks. There are about 120 C-17s and about 85,000 of these trucks. In terms of all of our systems, age is something we need to be very concerned about. We have a lot of systems that will have lives up to 90 years. They were never intended to do that. We looked at them when we were designing those systems and we expected them to have a service life of about 2030 years. Each I.M.P.A.C. card purchase saves $50 in paperwork and administrative cost and I've seen some other numbers that suggest that number may be closer to $75. The objective is by about 2000 we'll be doing almost all purchases under $2,500 using this card. In terms of data conversion, moving into a digital environment, we have converted about 60% of our engineering drawings, we have converted almost all of our tech manuals, at least in some version. The intent here is to move us into the electronic age, so you create the data one time and who ever needs these data has access to them. Data is a shared resource . That's how industry's doing it and that's how we need to recalibrate our thinking. Then we'll eliminate a lot of time, we'll eliminate a lot of errors and we'll achieve a tremendous amount of efficiencies in this entire process. In terms of O&S costs, going down some old systems, the Army changed the type of joints they were using from U to CV joints on their trucks and it reduced tire costs from about $19 million dollars a year on those trucks to about $6.5 million. DoD extended this initial success and decided to request some money to put in to fixing high failure items in some of the older systems. This year we got $135 million and the current estimate is that over ten years that $135 million investment will reduce O&S costs on current field and weapon systems by $4 billion. In the area of information technology we have recently established within our organization an information integration office. We took parts of what used to be CALs, Logistics Business Systems and
Advanced Technology and we put them all under one roof. We are calling this effort an Integrated Data Environment (IDE) where you take essentially everyone that needs to have access to the data and owns a piece of the action and you hook them in a net where you've got shared data resource. Our intent is to do this from the time we start the R&D process until you dispose of the item In '98 we will take quite a bit of money from different pots that we have within the USDL, we'll do some additional IDE things at TACOM and the Electronic Commodity Command. Also the PDO-PM side of the house. We are also doing some simulation-based acquisition, so that we can better understand what happens in the life cycle cost of a system. There is a lot of talk about JTAV these days; it's not a system; but software to help the network and hook different systems together so that we can bring up information on one screen and ultimately you'll be able to look at one screen to look up a selected item, what is on hand, pending and what is stored in the theater, what is pre-positioned on land or at sea, what's coming in intransit to them and also what's in storage back stateside. About 30 years ago when I was managing ammunition in Vietnam, I used to call the Director of Transportation on the ammo side, to ask what he had sitting on the airfield in Travis, so I could tell him what I wanted shipped, or tell me what was in the water port on the West coast ready to be loaded but not on the ship that's loading right now and I would tell him what I wanted to put on it and I would also tell him what I wanted top stowed. Now I was doing that back then, 30 years ago, but our system still has not progressed beyond that capability today. Thank you.
Mr. Edward J. Krajca Dire£ tor, l.ogi~tio ( hrysler Corpomtio11
This is not the typical group I normally speak to, but I see an affinity between Chrysler and what is being discussed in this Forum, because their business is a daily battlefield. The competition is fierce and unless you're on
the offensive with new products and better systems you're going to die very quickly. The purpose of Chrysler Corporation, of course, is to stay in business and to do that our goal is to make products that people want to buy and will enjoy using and will want to buy again.
To stay on top, it takes an awful lot on the part of all the activities at Chrysler, such as engineering, product design, procurement and logistics Chrysler's vision in logistics is to provide on-time, defect-free logistics services at optimal systems cost And I stress the systems cost because we're not looking normally at just one part of the total supply chain, we have to optimize that total supply chain so in the end we are the lowest cost producer. You must have a vision, and you must deploy that vision. To deploy this vision we had to identify first of all what is the ideal state, and then compare that ideal state with where we saw ourselves currently. Then, drawing from those differences between ideal state and the present state, we identified the gaps, or the reasons why we are not at the ideal state, and did an analysis of why we're not there. That then takes us towards our future activities for the next five years in various areas. And we have categorized our business in different areas in quality, cost, cycling time (we call it transit time), human resource utilization and human resource development. And we measure our progress and our path moving towards the ideal state by developing and maintaining a balanced work card for each organization as well as each individual in that organization. And now we are rolling this out for our logistics providers. Chrysler's logistics system has a supply base of about 750 suppliers, is primarily in the assembly end of our business. We have 1,700 shipping points, 34,000 different part numbers that we manage. Material flows into our manufacturing plant or direct to our assembly plants or through a series of integrated logistics centers. There is also our after markets business which we have trademarked, or trade named MOPAR We have more ship points and more part numbers because like you, you have to
maintain parts over the life of a product, in our case we keep them for ten years. We have a series of field depots and distribution centers and then ultimately all of this comes out to the customer, to our 5,500 North American dealers and more than 200 distributors around the world. This is what we refer to as our volume production process. And we had a look at our business in three different formulas, product creation, volume production and customer acceptance. Logistics is one of, if not the only organization in the company, that deals across the whole plant in all three areas. Our suppliers receive our schedules on a daily, if not hourly basis, to ship material to the plants and material handling engineering is developing our returnable container system so that we can move our parts and avoid damage in the transportation process. We then move the parts into our plants, we build our products, whether it's engines, metal stamping or some vehicles and then we move our products out to the dealers.
I would now like to cover just a few of the key initiatives we have going on. At all of our locations, we have lead logistics providers, who are leveraging all of our outside providers in terms of their information systems capability. We found out that we are not very good in developing information systems if it's not an important part of the business of building products. We've seen an awful lot of information systems being developed by the outside third party providers. I'd like to cover three initiatives, one we call SCOREour Supplier Cost Reduction Effort, secondly Extended Enterprise and thirdly the Ideal Supply Chain. In the area of SCORE, we have designed a cooperative program around our Extended Enterprise and our supply base to drive continuous improvements in the process and to improve or reduce the cost structure of Chrysler. We expect that all of our logistics providers, all of our material suppliers come in with ideas to the equivalent of 5% of their business with no degradation to their markets. We want them to share in these improvements. Last year we achieved on a corporate level $1.2 billion in improvements just for this pro-
gram in leveraging our whole supply base. And in logistics alone we were almost $80 million. And this year we're going for a billion and a half dollars. In fact one of the first ideas that came in from a supply base was to modify one of the parts that we used underneath our Dodge Caravan Minivan. The part was at a finished leveL It was finally decided that the only time a customer would see this part was when the vehicle was running over them so we reduced the level of refinement to that part; we saved a significant amount of money. One of the success stories just in the logistics area are the movements between our metal stamping plants. We've gradually been converting all of these moves and we're expanding this
We're out working with our supplier in continuous improvement workshops to help them improve their process to drive continuous improvement into our process, to ensure that all supply and redesign initiatives
are used in total concert and balance.
to the rest of our supply base to a live load and live unload as opposed to a drop and pull, putting trailers in bullpens that eat up space at our plants that we could convert to productive uses. As a result the transportation provider reduced their overall cost and their cost to Chrysler. We want continuous movement in our product. The next initiative is Extended Enterprise and it's something we think that Chrysler has developed on its own, in fact we try to trademark the term Extended Enterprise. We try to leverage the whole enterprise, not just the logistics providers bringing materials into us , or vehicles to our dealers. From a logistics standpoint we try to consolidate material collection throughout the complete supply chain. Chrysler logistics network becomes available to complete the supply chain. We have
an awful lot of resources and at times we have excess capacity out there that we want to apply or employ in the rest of the supply chain. Our logistics providers are measured in the areas of quality, cost, cycle time, human resource utilization and development. This will be a tool that we will use at the suppliers meeting; the logistics providers will be used to drive improvements right through the system as it affects the Chrysler enterprise.
The last initiative I want to discuss actually contains several elements to it that we're spending an awful lot of time on now and that's to create the ideal supply chain. That has its component parts, part plan, work station redesign and small op containers which go together, integrated logistics centers both at a plant and a regional level and third party container management. The part plan is the process by which we document the measure of all elements in the delivery system from the extent of enterprise to point of application on the assembly line. And the customer as we see it is the assembler just like the battlefield person in the field is your customer. We intend to take all of our 35,000 or so parts and have a plan, a logistics and supply plan for every one of those parts. And with the introduction of two new products this year, a new sport utility in our Newark, Delaware plant and new full sized car in Toronto, Ontario, we have documented and developed part plans for everyone of the 2,500 to 3,000 parts that go into each of those vehicles. And the logistics providers are integrally involved in that whole process and in fact they are developing the data base for us . The targets of the part plan are to reduce cost by eliminating inventory and delivery waste. We're out working with our supplier in continuous improvement workshops to help them improve their process, to drive continuous improvement into our process, to ensure that all supply and redesign initiatives are used in total concert and balance. To instill standardization simplification and discipline in our delivery operations, we developed what we refer to as small lot containers, designed to optimize the whole system
and in fact the ideal delivery of material to an assembler, to our customer in single part flow. We would like that assembler to be able to turn around and reach out and pick up the next part that he or she was to apply to the vehicle. What we're trying to do is get to a system whereby we have no more than two hours of inventory at line side. And that improves the overall ergonomics of the work process for the assembler, it improves the quality of the product, reduces wait time, and ultimately traces the line the vehicle has to travel down for its ultimate assembly and we can recapture that space for a greater production capacity and expansion of the future product capacity. Right now we're in the process of adding about a billion dollars of value in terms of our small lot containers. We are putting small lot containers into all these new plants with the new products. 100% of the material will be in small lot containers and there will be zero cardboard or waste at those plants. We ultimately intend to roll that out over the next three years to the rest of our facilities. To support all that, we are testing a series of plant integrated logistics centers. We plan to leverage the supply base and the volume that moves in a transportation system; bring the material to a nearby plant Integrated Logistics Center (ILC) and then have that material released to the plant based upon electronic pulse signal. Once a container is empty at line side, we send an electronic transmission to the plant ILC and they move the material onto a trailer or special conveyance to bring it right to the plant. We see an expandable role for these plant logistics centers in terms of sequencing materials into the plant in the exact sequence that the vehicle is going down the line. We may do some assembly at these plant integrated logistics centers, such as building up instrument panels or suspension valuables. And we intend to use them for the return of containers back out to the logistics system. We have an awful lot of massive material suppliers for example in the Great Lakes area, and we have a lot of Chrysler facilities. And through these integrated logistics centers we intend
to leverage that and we intend certainly to reduce transportation costs as a result. And then we see an expandable role for these regional centers to perhaps serve also as a plant integrated logistics centers provided they are close enough to the plant, to provide for container redistribution, not just return back to the sending supplier but redistribute it back to a supplier, perhaps closer by, that can use that same type of container.
And lastly in terms of initiatives, referring back to our efforts to eliminate cardboard in our system and generate an awful lot of assets in the form of returnable containers, we realized we need a system to manage that. We're just about to launch a third party container management system for the distribution planning and maintenance of all of our returnable containers in North America, a system that has been developed by a company called Chapters. We intend to be in business with them by the first part of next year and certainly we'll add a lot more complexity to our overall logistics system. So we're done with all this, we roll all this back in, we focus on continuous improvement and making sure that everything is viewed in terms of quality, cost, cycle time, human resources utilization, and human resource development. Thank you.
Mr. Frank K. lurner
Vice Pre\ident - Field Operatiom CSX Tmmportation
The focus of my presentation will be the intermodal part of CSX, since my main duties are as Chief Operation Officer of CSX's Intermodal Company. He stated that, to transcend into focused logistics we have to really understand what each of us do and what our capabilities are, what we can do really well and perhaps what we can't do so well. Each major railroad in this country has a slightly different focus on intermodalism. I will briefly explain how our intermodal company operates and what intermodal really means as far as CSX is concerned. Trains mean a lot of different things to a lot of different people. A lot of people think of automobile trains, coal
trains, freight trains, but the area that really is growing in our industry, not only with CSX but also with other railroads throughout the country, is intermodalism. I want to explain what an intermodal train really is, what it hauls, how much it hauls, what it takes to move it; a little bit about equipment and a little bit about some of the things that we are doing in order to advance our terminal and trucking systems and then tell you about a rather large amount of money that we're spending to enhance our intermodal network. CSX has about 18,000 route miles, the intermodal network covers about two thirds of that core. We operate as a transcontinental intermodal network. Not only do we utilize the trains on our own core, but we actually buy space on other trains, on other railroads. Basically, one bill covers the whole thing, it's not an interchange between two railroads. The fastest way to move freight on American railroads today is in intermodal trains; 32 hours to move an intermodal train up and down the West coast; 75 hours across from the LA basin into New Orleans; another 37 hours into Jacksonville and 28 hours up and down the 1-95 corridor. About a year from now those numbers are going to be less because we'll have a great competition with our friends at Norfolk Southern. We handle almost a million loads a year. We have 33 dedicated intermodal trains on our network, plus we buy space on ten other trains. Sixteen of these trains are double stacked trains, we operate a total of 33 intermodal companies throughout the country. We service 16 ports, serving the Gulf, the Pacific and the Atlantic. 38% of our business is international, 12% is UPS, post office and lesser trailer load, truck load. We do have a trucking company that we think belongs in our transportation chain. About 5% of what we haul under the auspices of the intermodal company is Direct Truck. 43% is what we call wholesale and that's when we deal with other logistics companies, third parties, that secure the freight and make the arrangements for us to move. The intermodal train is different because it moves a lot faster. Basi-
cally an intermodal train on our railroad can be as long as 9,000 feet. On a train that size we can haul 85 fortyeight foot trailers and 300 double stacked containers or a combination of both; our average tons per train is 6,500. There are two rules about equipment that are real important. One is you never have enough and the second rule is you have too much and no place to store it. This is especially true in the intermodal world. Now is a busy time of the year in intermodalism where nobody has enough equipment. In January and February we'll be looking to store it. The thing to really remember about intermodal cars is that it's the platforms that count. On the box car side, one car was one car. That's not true in intermodal. Somebody may tell you they are going to furnish you ten cars, you may be able to put 100 containers in that because its five platforms will allow you to do that. Railroads many years ago made a decision not to own trailers for the most part. Although each railroad I think owns a few, we own together about 5,000 trailers and about the same number of 48 foot containers. As you can see, the traditional way was the trailer, railroads are going to double stack for the efficiencies that that brings. There are actually 36 different configurations of intermodal cars to haul containers as small as 20 foot to as long as 5 7. I heard some things today and yesterday that really made me realize that I think perhaps we are on the right course and doing some of the right things. General Kross mentioned yesterday about smart planning and smarter execution. And he talked about a terminal sometimes trying to hold more than it could. We see this quite often in the intermodal world and we're trying to do something about it. The one thing that really amazed me about the intermodal world was how difficult it is to keep track of that trailer or that box once it leaves the terminal. The good thing about a box car is that most of the time it's on the railroad track, so you know where it is, and if it's not on the railroad track, it's usually pretty easy to find. With intermodal, once it goes out the gate it could go numerous
places and we really don't have a good handle on that. However, some of our people have developed what we call an ITOPS system that really gives us better management of the flow of trailers and containers as they move in and out of the terminals. Sometimes even in the terminal, especially at a large terminal, we're embarrassed when we leave something behind because our inventory procedures are not like that of the railroad. One thing that we really have to work on is better hitch utilization, better utilizing the assets that we have out there, we have to get more scientific, as to how we load the train. As basic as that sounds, in our industry that's one of the fundamentals we really have to get better at, and we will through the use of ITOPS. Another program we're working on is TL2000, designed to let us use our trucks more efficiently. More efficient dispatching of our drivers brings us improved productivity and it certainly improves the service or quality. Since we've had TLZ000 in our 33 terminals, we feel that we have already seen a good benefit with improving our trucking on-time performance from 87% to 96%, go and we're not going to be satisfied until we're at 100%. We're really spending a lot of capital money. CSX is spending $ 75 million in new intermodal terminal expansions, $500 million on improv\ng our infrastructure, primarily between the northeast and Chicago, in addition to the 700 million that we'll put in for track improvements, signal improvements, locomotive acquisition and other things throughout our whole system. We're not the only railroad doing that because again with a nationwide network, if one railroad is going to spend a lot of money to have a good structure and if the western railroads don't do that well we're not going to realize the full benefit. Both Santa Fe and the UP are spending a lot of money building their infrastructure. As far as capital spending and improving the infrastructure in our nation's railroad, I think we're in somewhat of a renaissance. But I can assure you that CSX is focused and we are committed to the transition to focused logistics and establishing good
just in time service.
I Mr. Randy Clark Ma1111ging l)ircctor, Global Loghlin Emery Worldwide, a CF Company
Emery started in 1946, as the brain child of John Emery, who had worked for the Navy's transportation department. His goal was to find a way to get material more quickly to the warfighters; and he focused on air cargo. When he retired from the Navy, he started Emery Air Freight. Over time, Emery has developed into a common carrier. If you order a Dell computer today, you call an 800 number. If you are smart enough to know exactly what you want, down to the memory and RAM, you will have the computer delivered five days later. That delivered product did not exist when you made the call; it was built to your specifications. That is true logistics to me.
We became an integrator, which simply means we use our own aircraft, with some 90 planes flying in the US, Mexico and Canada today. We have our own ocean company, we are a multi-modal logistics information company, we have our own brokerage company and today we do two billion dollars in transportation, logistics, warehousing and brokerage. 33% of our revenues come internationally, that's outside North America. A very important part of our business is the postal traffic.
Today I want to concentrate on four things: customers, business drivers, service needs and Emery's goals. The military view point on logistics, traditionally has been to stage, store and position in order to mobilize. But Emery's view is to mobilize so that we avoid staging, storing and positioning. In today's world we are in a strict build to order environment. One thing that Emery has learned is that our customer is very important and we have tons of matrices established to judge ourselves every day. We continually look downstream today, the war fighter is the person that needs that the most, we should be looking at the time that he needs it to the time that he gets it, and I know that's
what you are doing. We're trying to understand the process, we're trying to understand the customer's process and the customer's customer's process. The process is the driver behind everything. We can move a box from A to B and get it there the next morning, we can get it there in two hours, but what we have to understand is why. We have to understand the goals and objectives of not only you the customer, but we have to understand our customer's customer's goals. The business drivers behind this, is that we all want lower inventory. To me there are no greater costs that can be taken out of the supply and demand chain than inventory. Time is the second biggest cost savings. Time and inventory go hand to hand. We want to reduce that cycle time. One of the things that Emery is spending millions of dollars on is to dynamically track and trace the visibility of a product. You call it TAV and ITV, but our goal is to source a product throughout the world by product number, by SDN number, by purchase order number, by order number, whatever number you have to be able to drive down to the part level and tell you where that is every moment that it is either moving or that it is not moving and then we can tie that to when it is needed. Emery delivers freight next morning, second day, three to five days. Well, that's not good enough anymore. What people want is a time definite service. And many of our drivers and our routes are set up to not only deliver that product next morning, but do it every day at 10:00 so the expectations are met and it's time definite so that the people at Chrysler or at GM understand when that product is coming and can set their schedules to that. Quality is a given, training is a given, we're doing both of these. The needs of the customer are the same whether you're in Istanbul, Buenos Aires or in Detroit. The semi-conductor industry has set up their supply chains so that they receive products in the US 48 hours after they are shipped, and that's what we as providers are expected to do. Clearance 24 hours, 7 days a week.
We require all of our carriers to track our shipments when we utilize other carriers to provide the best service for you. While we can do this with Emery very easily today, it gets more difficult when you start throwing the Yellow truck lines in or you start throwing David Lloyd in Europe, to track that part number horizontally through different carriers. It takes time, is expensive, but it's a great product and it's a separate software package from us, and it's all done through EDI feeds. EDI is something that we have to do today and you have to do today. CNF, which is the parent company of Emery, is the leader in the industry. We can customize any report as long as we can spend the time with you. We're the first to test EDI with the DoD, so we're very in tune with what the EDI needs are of other companies as well as yours. So I wanted to give you an idea of some of the things that we do for you in today's world, to let you know that were spending millions, as the others are on the panel, we're spending a great deal on airplanes and trucks , but we're also spending it on systems, hardware and software to be able to easily integrate with the business that you do daily, and it's very difficult to do that.
I want to feel good about the Department of Defense's new vision, with a stated interest in logistics, but the truth of the matter is that the United States military does not have a good track record in joint and multinational logistics.
I believe the crux of the problem is that the US military in both its intra and inter logistical relationships is one, a poor team player, two, without an honest logistics azimuth to follow and three, doesn't practice what it preaches.
My experience in the past 15 years has been almost exclusively in the joint, combined and multinational areas of logistics. And it is this back-
ground that has molded my thoughts for today. I want to say up front that I support]V 2010, and the notion of focused logistics. I believe I could appreciate the second piece more if it were focused on logistics. There is a very complex recipe that must be followed to bring us the point of focused logistics. Verbal support is not enough; we have to believe in the gut that the effort to reach focused logistics is worth it, it is not a mind game, it is hard work that makes logistics the great equalizer on the battlefield. "Forget logistics and you lose", that is what General Fred Franks said in his book, Into the Storm, a non-fictional piece on the war in the desert. Logisticians, as a minority, need to stand up and be counted, we cannot let the gunfighters have their way with us in pursuit of their dreams.
My goal today is to address a couple of examples and notions that I believe represent the difficulty, the reality of coming to grips with focused logistics. The complexity of the task, and the magnitude of the challenge are immense. Much effort will be required from all of us , military and civilian, to make focused logistics work. For openers, JV 2010 suggests: "when conducting future operations we must find the most effective methods for integrating and improving interoperability with allied and coalition partners." Let me say for the record, there are huge differences between allied and/or coalition arrangements. In an alliance, members act as one, with preordained rules, roles and standards for interoperable logistics support. In a coalition, one nation plays the role of sponsor (read "in charge"), and if you want to participate you do so using the sponsor's rules. Operation Desert Storm is a classic coalition, and the US liked it just fine, they were in charge and someone else was paying the bill.
Operation Joint Endeavor (Bosnia) represents the classic alliance. NATO is in charge and each member shares responsibility for interoperable logistics support. The US does not like that; they are not in charge and do not want to share costs. Thus the US made a deliberate decision not to play logistically by those rules; arguably a strange
decision to make after practicing for almost 50 years to perform as a member of the alliance. And bear in mind, this decision was made by the authors of JV 2010. That suggests to me we are not quite ready to practice what we preach. Joint, combined and multinational operations represent a sea state change in thinking for our military, and a mind set change for our politicians. I say this because a dedication to logistics through the interlocking synergy of interoperable, multinational logistics will require changes to US law to give military planners this option.
I'm also concerned with the impact of Dominant Maneuver as an emerging operational concept on focused logistics. It suggests the warfighting force will be more agile, with faster moving joint operations (air, land and sea), adapted to conduct sustained, synchronized operations, from dispersed locations, using tailored forces, while keeping a widely dispersed footprint. And all of this will be supported by a logistics force that is responsive, flexible and precise. There is a dichotomy here: the downsizing and eliminating of capability before we understand the full ramifications of focused logistics. Granted, information technology and industry absorb some of the delta, but a strong, dedicated logistics force structure, comprised of skilled, trained and ready professionals and units, and industry are absolutely essential to forge the relationships that will produce focused logistics.
Logistics and logisticians are always catching up with doctrine and weapons systems. If focused logistics is to be a success, more emphasis must be placed on logistics earlier in the doctrine and weapons systems cycle. Logistics is not the bill payer, it is the weighted, value added for battlefield success.
Much of future logistics is built around the role of information, and justifiably so, but without a proper mindset, or the force structure to influence action resulting from information, you probably have the cart before the horse. A case in point, railway operations in Europe during the early phases of Operating Joint Endeavor. Information could tell through in-tran-
sit visibility where train cars were on the ground, but without any available railway control teams or specialists there was precious little the US could do to influence deteriorating situations. Information is good, but one must have the capability to act on it.
I sense considerable wiggle room between the US military, our allies and the commercial sector regarding what constitutes sufficient intransit visibility and total asset visibility. It may be more cost effective and less disruptive to add force structure than make unrealistic or expansive demands on allies and industry, particularly if we are really serious about the productivity of synergistic relationships.
This brings me to a last issue, outsourcing. It is the buzzword of the
Logistics
these pachyderms of the 20th century from the next millennium.
Having said that, perhaps the headquarters with the greatest influence on focused logistics will be USTRANSCOM, which should be responsible for developing the total defense requirements regarding transportation services. Currently these requirements are harvested by the services. Generally, the services cut from the force structure personnel and units that provide these capabilities to save warfighters. TRANSCOM should be the single point of contact for all transportation issues and strategic deployments. In the world of transportation one stop shopping for all your needs is the way to go.
TRANSCOM elements control air
and logisticians are always catching up with doctrine and weapons systems. If focused logistics is to be a success, more emphasis must be placed on logistics earlier in the doctrine and weapons systems cycle. Logistics is not the bill payer, it is the weighted, value added for battlefield success.
90's uttered most often by an organization that arguably least understands it, the Department of Defense. I support outsourcing for the right reasons, not for the sake of outsourcing. It seems imperative to me that we all understand, outsourcing is a function of teamwork. To be effective there must be a foundation built on mutual understanding, trust, credibility, shared business risk and acceptable results.
Defense says it wants the best goods and services, at the right place, at the right time, in the right quantities and at the right price and then tells industry to use the Defense Transportation System for all international transportation. Defense says it wants vendors to be responsive to surge, contingency and mobilization and then directs them to use the DTS. I understand we are not prepared to operate today without CRAP and VISA, but surely shared risk, notional need and the bottom line can work together to eliminate
and water transportation admirably, but worldwide surface management is flawed. MTMC is the answer, now and for focused logistics in the future, but MTMC is in paralysis. The cure is, to give it a real mission. Make it responsible for management and control of all surface transportation, rail, airport, water port, inland waterway, pipeline and road operations. This is just one more example of focusing on logistics, so we can have the luxury of focused logistics in the future.
In closing I would like to reiterate how important I believe it is for the authors of JV 2010 and focused logistics to practice what they preach. Joint, combined or multinational operations must be homogenized, no more rice bowls. Defense and industry must work together closely, but the operative issue is how? What will be the vehicle, who will navigate and who will steer. Whatever the answer, one thing is certain, we need that vehicle today. 2010 is too late and without this
important logistics vehicle all we have is rhetoric, and lost opportunity. I will leave you with this thought. "Wouldn't it be amazing what we could accomplish working together, if we just didn't care who got the credit?"
Questions & Answers
Q :How do you define fast sealift?
Cusick
A:I believe those are ships with a speed of 50 to 60 knots.
Q:In discussing the life cycle weapon systems cost, you mentioned two transportation systems, aircraft and the truck and said they were selected on life cycle cost best value, what was the point, etc. on this?
Willis
A:I think there would be two points, one is that these systems will be around for a very, very long period of time and there's opportunity to plan the process and reduce the cost for those systems over a very long period of time. The other one, as an example, is the contract on trucks. The requirements document stated about 3,000 miles mean time to failure, on some of the higher density it was about 6,000 mean time between failures. Now that enables the Army to do a couple of things, it does not have to retrain mechanics, it can also go back and re-use the parts for trucks. We're trying to get people's attention to those type things because we typically think of life cycle cost of being extremely high for weapons systems, and there are tremendous opportunities out there for all of us.
Q:How much willing participation do you see from suppliers for the SCORE program, and how much input do you have to supplier processing?
Krajca
A:I think SCORE has matured over the last several years. It was introduced in 1989 and it has
matured to a point where it is seen as a core business process between Chrysler and its suppliers in the extended enterprise and that the suppliers will willingly admit that their business has improved, their margins have improved largely and in fact we want to make sure that they are rewarded for their participation in the form of new business. We've seen suppliers contribute as much as 4050% of their annual Chrysler revenue and that's millions and millions of dollars in the form of SCORE participation. Unfortunately we still have some at zero percent. And we're now moving into another dimension or phase of our process in that we will be considering future business awards based upon SCORE participation and certainly we'll be looking at the retention of business in our new programs if we do not see the suppliers participating in this. I think if you talked to those that really have embraced this whole process, they'll tell you how pleased they are, and how much of a win-win proposition it is. And secondly, with respect to participating in supplier processes, yes we do. I referred to continuous improvement workshops, we do that in logistics, we intend to do about 30 workshops in our logistics distribution system. For example we have a vehicle distribution facility out here in Oakland and we work with the rail provider as well as the over the road provider in about a four day workshop. We train them how to go through a workshop to improve throughput in the facility like that through the whole logistics system and how to link up back through the supply chain back to origin and with the intention of reducing cost, cycle time and improving quality and the employee and human resource utilization. And we're training the providers to do that, we expect them to go out and take that through their own system and build a solid base that continues the program.
Q:Please discuss the significance of the railroad situation in Texas, in terms of the implication for the rest of the country and how long will it last?
Turner
A:I'm sure this refers to the congestion that we've seen around the Houston area on the Union Pacific railroad. The Union Pacific railroad as you know just recently merged with the SP. I think a lot of what you read is that the merger has really caused all this congestion and caused bad fortune that has come UP's way recently. A couple of things have happened; first, they have had some very tragic train accidents that have involved the loss of life that we all regret. Consequently, the Federal Railroad Administration is going through very close audit procedures that have slowed the velocity of that railroad down and, the railroads are still operating under separate labor agreements so we really can't blame a lot of that solely upon the merger. Now I would say in the railroad community there's not a person that believes that the UP won't come out of this in fairly short order. As I mentioned today they are doing a lot of capital work, and that too has slowed the velocity of that railroad down. It has had implications nationwide, primarily equipment, that is, we never have enough equipment. I think that with the completion of a lot of their capital projects on that very road, by the first of the year they'll have a good operation.
Q:What are the strengths and weaknesses of the recent augmentation programs being outsourced to civilian companies?
Farmen
A:I think I can say up front that that's the way we're going to go in the future. We're going to outsource that capability and the companies that we are outsourcing to are ordinarily adept at doing what they are supposed to do. I would caution though the notion that it allows us to reduce the footprint. Much of this outsourcing just alters the footprint and puts it inside a different uniform. You also are going to have the responsibility of the adverse conditions of taking care of it, securing it to allow it to do those things that you've asked it to do and
that increases your footprint. There is no doubt in my mind that those programs are here to stay. The one last issue is that makes them better every day is the notion on the part of Defense to include these folks in the training aspects of the planning that goes on so that they can be more productive sooner.
Q:How extensively do you use third party providers and then parenthetical "brokers" for transportation?
Krajca
A:We don't need brokers, we prefer to deal directly with providers. We will deal with brokers if they're in a field where we just have no expertise. We deal with one that I know of to handle machinery moves for us, big presses and process equipment that we bring into our plants on a regular basis. Third party providers can be a misleading term and the definition can change from day to day, person to person. We don't consider a truck load provider necessarily the third party provider. Third party is when they come in and add value to the process they are involved in. If it's planning or control. The second question is are you comfortable dealing with nonasset owners in arranging the transportation? Again the one example I gave, we're now looking at perhaps the non-asset provider as what we would term a flow designer. We want somebody to come in to help us design the optimum flow of materials given our schedules all the way from the line operator back to the supplier and then perhaps in the future back below the tier one supplier. So we can optimize the total system and total cost in that whole process.
Q:What will railroads do in the future to improve their total intermodal efficiency at ports?
Turner
A:We're going to have to share assets in the terminal to improve efficiency. I'm primarily talking about
chassis. But when we have to handle that box more than one time in a terminal it begins immediately to delay that shipment. Also as new terminals are built, on-dock rail should be a must. It would be a shame to build any new facility and not have on dock rail. The bottom line to improving intermodal efficiency at terminals is simply to handle that box as few times as you possibly can.
Q:What processes do you use to calibrate progress in meeting your customer's customer goals? How do you measure these well enough to tie them into compensation?
Clark
A:We started with this at a distribution center in Chicago where we were doing an export consolidation and running inventory. We tied our goals into the warehouse's first profitability and revenue just internally. And then the other half of the warehouse people's bonus came from, not the person in charge of goals but how she was judged. So if she was successful in her goals we thought that we'd be successful in ours. So that's an example of how we did it.
Q: Inventory reduction and focused logistics sound good from a cost and business perspective but how desirable are they from the war fighting perspective? What happens if we face an enemy who can interdict our supply lines, destroy ships and aircraft and supply points? Are we making ourselves more vulnerable to this kind of a scenario?
Farmen
A:I'm not going to answer the second part because I get too emotional. But the first part, on inventory reduction and focused logistics I find very intriguing. When DoD writes the specs for contracts overseas in many cases and justifiably so, they demand that the contractor over there be responsive to surge contingency and mobilization within prescribed time limits. They direct as well that they have to use the Defense Transportation System. Some of the contractors
that I talked to over there are uncomfortable with that because they don't want to be in competition for assets at the precise point in time that they are confronted with a surge contingency or a mobilization. And yet they can't go out and get their own transportation at this point. Their only alternative is to carry larger inventories down the range. So while we in DoD pat ourselves on the back with the notion that we don't have inventories anymore, our friends in the industrial side are carrying those inventories for us. And so I'm a little bit concerned about whether or not the inventory reduction is in fact a viable thing that we can take credit for in DoD in terms of surge contingency and mobilization.
Cusick
A:Asregards the question are we setting ourselves up for failure as we reduce stockpiles and the like you obviously need to go into that smart. I don't believe that we are. There's always a fog of war, and you will never hear me say just in time inventories or just in time logistics for military operations. There's always a fog of war out there, we need a safety level, we don't need stock piles or mountains of supplies. That's what this technology should be able to get us and get us down to, a reasonable safety level. We need to work to see what that is. But in my opinion it's about 15 days. This technology will also help us re-route when we do run into problems, re-route supplies and equipment and units that we need because we'll have decision support tools to help us do that quicker. So never, ever in a military operation do we want to talk just in time. Safety levels are required.
Summarized by COL Norbert Grabowski, USA (Ret.)
(left to right) Leonard Drabkin, Esq, Assistant Deputy Under Secretary of Defense (Acquisition Process & Policies); BG Roger Scearce, USA, Deputy Director for Finance, Defense Finance and Accounting Service; GEN William G.T. Tuttle, USA (Ret.), President, Logistics Management Institute (Panel Moderator); Frank Weber, Deputy Director for Logistics and Business Operations, US Transportation Command; BG Hawthorne L. Proctor, USA, Commander, Defense Personnel Support Center, Defense Logistics Agency; Bernard Madej, President, CH Robinson Logistics.
Editor's note:
GEN Tuttle: I would like to do a little stage setting, if I may, in terms of where we are. We are in the business of trying to shed infrastructure. The logistics infrastructure as we have known it consists of inventory managers, buyers and distribution depots. There are 165,000 civilians and a 70 million dollar inventory. We supply the departments, we maintain and we transport We are long past the process of owning the asset. Except for the C-17's, and a few others, we're basically in the transportation business as arrangers or brokers of this process. Now reflect back to what was said by Tim Rhein about core competencies. We did a great job in Desert Storm with war fighting, once the stuff got over there. But putting this much inventory in warehouses and then reselling it to the forces , the air squadrons, the ships and the tank battalions; what's the value added? Our problem is that the customer of the customer isn't known to our defense industry in many areas. We the DoD insulate our customers, suppliers from that kind of intelligence. We operate a monopoly, if you will. There are few incentives for cost reduction. We don't have a cost accounting system; so how could there be incentive for cost reduction. There's no penalty for high costs. We can't control our work force, we have little to say
about a lot of the procedures and about changing business processes. Our inventory management business always makes GAO's high risk government programs list, year after year after year. We find that we buy more than we're suppose to and we pay more then we should. It's just not very businesslike. We raise our people, military logistics leaders to come in and do the things that we did in Desert Storm. But we're not exposed to the competitive environment of civilian industry that hones the best practices and forces penalties upon those who don't exercise them. So that's where we've been. What's happening now is the paradigm shift; it's the movement to the other side. Where we seek both effectiveness of support for the war fighter, the customer, and efficiency in the theater support, we can no longer afford the large footprints in logistics that we had, even as late as Desert Shield/Desert Storm. So focused logistics is going to try to look at efficiency in terms of use. But it also will depend on the left side, that's the brokerage side We don't want to be a middleman, except to the extent of keeping track of information, which is critical to the management business-writing and enforcing the contracts and becoming strategic partners with industry. The 6040 rule and all the other rules that Con-
gress has mandated are barriers, but they are not insurmountable. We are hoping to create enough excitement in you, who are a part of this system at the working level, to find ways to get around these barriers. We need to develop those long term "trust but verify" relationships. And how long is this going to take to happen? If we go at the low rate, we're talking by 2010. The high rate, which is what the Defense Science Board recommended last year, has been a subject of great controversy. The higher rate says we can get there by about 2003. There's some issues in this though, it is not a free lunch What I'm trying to do is just plant the seeds in your mind, the questions, the suggestive issues.
Now the second issue comes to mind-managing the sustainment flow. The CINC has to regulate the entry of things and people into his area, otherwise he gets overwhelmed. Yet, there's a perceived loss of control and ability to prioritize transportation if we go to a third party.
The next to the last issue, is intransit visibility. If you don't have visibility over those commercially managed assets then we have problems. But the GTN is on the way. So that will be a leg up. And then there's the roles of the transportation component commands.
This article is a summarization of a presentation made at the 1997 NDTA Forum in Oakland, CA. NDTA regrets that due to audio difficulties on site, some portions may be missing or incomplete.
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This is a touchy issue, but business practices are changing; it may be contractors arranging that transportation in the future. So the need for the daily traffic management that's done by the Traffic Control Center will perhaps diminish. So the question is, how do you look at outsourcing, because outsourcing is going on right now. MTh1C is outsourcing its container freight stations that operate at the ports, and its vehicle processing center is being outsourced.
And last, re-engineering of organic business processes. And a lot of that will be the finance and accounting system. The question is, how do we change? What other processes are important? I'll leave this with you, with this rhetoric but no answers. Hopefully that will stimulate your thoughts as you think about the words of our next speakers.
Mr. Hcrnic Madcj
Thank you, General Tuttle, for the nice introduction. I'd like to thank the NDTA for inviting me here today. You have a great program and we're excited to be part of it. We have four objectives today in terms of what we're going to do. One will be demonstrating similarities between military and private sector. We came to the conclusion that there are a tremendous amount of similarities. Two is illustrating a condensed overview of the capabilities and mobility of what the private sector can do to support the military activities. Three is giving you an insight as to the mind set and philosophies of our company and the foundation of what drives a company like ours. And four, is leaving you with two challenges.
We understand you are exploring the opportunities of integrating the private sector into the support of armed forces and supplies in terms of deployment mobilization. Also we understand that you would like to have a little bit better understanding of the capabilities of the private sector and how we would support the war fighter. The military had great success moving the 1st Infantry Division during Desert Storm. Your information stated you had 15,000 war fighters, 6,000 vehicles, and 250,000
tons of supplies that had to be moved with the 1st Infantry Division. You required 34 trains, 14 ships and 10,000plus containers over a six-week period. Quite an accomplishment; you should be proud. Let me give you some sense of what a company like ours did in just the month of July, to give you a comparison with what the military has done. We manage-we don't own a single asset. We manage over 112,000 full truck load equivalents in the month of July around the globe. We source products for different customers from thousands of origin points to thousands of destination points. The lead times for preparing are 1-3 days. And in many cases customers literally call us in the morning and expect to have pick ups in the afternoon. On the international side , in 1-7 days lead time, we were able to manage that process and deliver those commodities and products. On the domestic side anywhere from 1-5 days, and offshore or internationally, anywhere from 8-28 days. I use this only to demonstrate the mobility and deployment capabilities that the private sector has in place today. This isn't tomorrow or next year, this is happening today. And those 112,000 truck loads constituted raw materials from various vendors all around the world, finished products to and from everywhere, perishable commodities, imports to the US, exports out of the US, intra North America, intercontinental and intra-continental-the in-network that we've developed. So there are companies like this out there who can mobilize and deploy and support the military activities today.
Considering all modes , your 1st Infantry Division moved about 90,200 truckload equivalents. An absolute great accomplishment. But in one month we did the 90,200 loads you did in Desert Storm, plus an additional 22,000. There are companies in the private sector that can handle those volumes. Who can support the activities today in terms of both deployment and mobility? Let me just go through one real customer example-Frito-Lay. We were called in about five years ago to re-engineer the entire organization, particularly our logistics supply chain. We started with re-focusing the organization and the downsizing. Their landed costs. The
But in one month we did the 90,200 loads you did in Desert Storm, plus an additional 22,000. There are companies in the private sector that can handle those volumes. Who can support the activities today in terms of both deployment and mobility?
capacity they were using was wrong. We replaced the entire capacity with different capacity, better quality and improved asset capacity. We improved the quality of the product before the product was getting to the plant; they weren't getting the amount of finished product out of the raw materials. By changing the type of assets we used and managing a process, we've improved the quality. We replaced a tremendous amount of inventory with velocity. We increased the speed through the pipeline, taking out tremendous dollars. We introduced a multi-modal program in terms of over the road, as well as expedited service, as well as stack train service. We are implementing the first unit train in North America for a third party logistics company in support of Frito-Lay. We improved the profitability by reducing the labor costs and in almost every instance we increased the transportation cost, but because we replaced the inventory with velocity, the end result was lower manual cost and more profitability for the customer. Then we went to Europe; tried to develop a similar idea, but could not find a suitable company in Europe . We now have put together a program to support this customer on a global basis within four regions of the world. Logistics managers and global managers will interface with their people now at corporate headquarters. This is just symbolic of what the private business sector has been able to do to support a very diverse global supply chain initiative.
Now let me talk briefly about what makes a company like ours successful. Some of these are cliches, but some of
them are very near and dear to our heart-customers focus. I tell my people every day, when you wake up I want you waking up thinking of one thing and one thing only; how in the heck are we going to solve our customers' problems. And I want to be very clear to that, it takes a combination of both the asset players in the industry whoever they are, because without the asset you can't get the product or the materials or the troops or the war fighters from point A to point B. But there are two distinct mind sets and two distinct core competencies. One is managing the asset to provide the absolute best quality asset that you can for that particular situation. The other is utilizing the correct assets. And again, I tell my people I don't give a damn if we use trucks, trains, planes, helicopters or rockets; what I want is a solution for my customer. Intellectual logistics, people say what the hell is intellectual logistics capital. In today's environment you have to understand the supply chain; the CONUS's supply chain. There are emerging opportunities for young people to understand the supply chain and its multiple components, but there's no organization out there who has the type of people who are trained or educated and who give their people the opportunities to participate in the cross-functional components of the supply chain. But that's the very intellectual capital that's needed to develop solutions. Fifty years of managing asset based carriers, a company like ours is no "Johnny come lately." We didn't put a sign out last week. We've been doing this since General Eisenhower developed the interstate highways. We have the largest carrier capacity under contract, of all the companies in North America. And now a few other brief thoughts. Critical mass, we will have managed well over 1 million full truck load equivalents by the end of 1997. Certainly probably not to the degree that you do in the military, but in the private sector. We are by far the largest non-asset based company in North America. What does that allow us to do? We will take that critical mass and leverage it in the marketplace for better pricing. That's just one area, the other area which we won't have time to get into is optimization by
cross pollinating and emerging and integrating multiple customers to develop solutions that you weren't able to when you had a smaller base of customers. Horizontal organization and this one I know is a real challenge for most companies. We have three levels of management in our entire organization. We have the senior management, we have managers of our operating units, and we have the people on the front lines. And we push down to the lowest level, we recruit the right people and train them, and we give them responsibility and we say make it happen. Develop a solution and do it. If it's wrong, learn
I tell my people every day, when you wake up I want you waking up thinking of one thing and one thing only; how in the heck are we going to solve our customers' problems.
from it and get out of the light. But we push it down. You can't have bureaucracy if you are to be effective and profitable in the private sector. Incentive driven-people like a slap on the back and people like money in their pocket, it's that simple. Compensation, myself included, is not guaranteed, it's based on the productivity and profit of my organization. You give a person a carrot, keep offering more carrots, and you'll be surprised what a person can do. But you've got to give them the right background, education, training and incentives to go forward. Flexibility-that's one of the key efforts of being non-asset based. Every customer has a different program, every customer has different needs. A company like ours has the flexibility to develop a specific solution, we think that's very critical and we certainly work real hard to stay very flexible.
DoD challenges. Number one, we always think of the customer. To us your customer, we think, is the war fighters' safety and satisfaction. Not all the people in the supply chain, not all
the levels of people, but that person, the ultimate person who needs that product, weapon, clothes, whatever that person needs. Silo management, I said earlier we were all trained, educated to be extremely good in one component of the supply chain and if we were real good we moved up in that one component. How do you knock those walls down-how do you manage in business across multiple components of the supply chain? It's not easy, you've got to get rid of silo management. Tactical versus strategic-I think this is a very critical issue for the military. Somewhere the military needs to step back and say, what do we have to be involved with on a day-by-day basis. We don't pretend as private sector to understand how to go to war. It's not our strength, it's not a core competency, you people understand that better than we do, but by God when it comes to moving those troops, and supplies, and ammunition, and maintenance and all the other issues that are critical, where do you draw that line and get out of the way, and turn that job over to companies that have a real core competency in the business. I can't answer that, but I think that's one of the biggest challenges the military has, is to find that line, and I think it's going to be different for various engagements. I challenge you to really think, where do you get out of the day-by-day operations and let somebody else manage that and you handle the strategic area, the thinking and planning.
Disbursement infrastructure, that's both the hard side which is buildings, property, inventory, as well as the soft side. Your payment practices; I've been asked a few times, how we doing Bernie, and I say, "great because we don't do any work for the government." They say, "why not"? And I say, "because we never could get paid!" And I don't mean to make light of that, but it's critical. The job's not done until we get paid.
Perceived loss of control-big issue here. You need, to focus on the contact, focus on the damn business side and get the business done. Visibility-I struggle with this one. Where is the fine line between how much dollars and
Continued on page
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resources you put into having this visibility of the pipeline just to know where every damn little nut and bolt and screw is. I don't know the answer. All I'm saying is that I suggest that you think about the direct trade-offs. Capacity, I know you people are concerned about capacity, particularly during times of emergency. Again, I revert back to our ability to deliver on a monthly basis, the amount of business that we manage for our commercial customers. The capacity is there, it's just a matter of going out and managing it. Establishing technical linkages, critical issue-all I know is the challenge. I don't have the answers today. And security issues come to mind in two areas; one, is how do you deal with the commercial community in terms of what we know and what we don't know; and two, is keeping us safe as we go into war with you That's very important.
Two challenges I'll give you and I'm done, 1) integrate military personnel with the private sector; 2) a good plan executed today is better than an excellent plan tomorrow. What's your plan of action? Thank you.
I'd like to thank the NDTA, and to say that it also had a part in shaping Joint Vision 2010, and is still doing so today. We're looking at shaving costs and saving anywhere from 26-34 million dollars a year. DPSC assessed its environment, got a little push from the Congressional delegation looking at prime vendor. But it also ended the competition from the Veterans Administration and the General Services Administration. We also looked at acquisition reform, and emerging technology as well as the downsizing that was going on within the defense establishment. Since 1993 we have reduced the inventory control centers, which I command, by some 50%. Inventory is down by half a billion dollars and that's not where we want to be, we want it to be down at least by a billion dollars but
we're working through some challenges in our clothing and textiles area. We're also looking at re-shaping the organization. I just want to highlight that we've gone from a functional stove pipe that Bernie just talked about, to the integrated activity that says, you come in, and we'll help you find solutions. That's what we get paid to do; to support America's fighting forces and help them find solutions.
In the transportation arena, we appreciate all the support that we're getting from TRANSCOM, MTMC and others. Medical Express is on the move and we're delivering within 48-72 hours after receipt of orders; even for emergencies . I want to discuss prime vendor, but before I do, you've heard about ECEI metrics; how are we doing? We ' re at over 50%. Direct vendor delivery, also over 50%. Our long term contracts, are over 90% right now, so we're moving in the right direction. Prime vendors are not the only solution and I don't want you to walk away thinking that that is the only thing I'm being held accountable for. Wrong answer. We're going to move to a single Inventory Control Point (ICP) at Ft. Belvoir for the DLA, our sales base of the two entities right now is about 3.8 billion dollars and we believe it will go to about 5 billion dollars. My customers are concerned about what happens to them in war time and how I support them. If there's not adequate supply of raw material, then we look at stockpiling. One of the big initiatives for the doctors and for the medical community is VLINE, vendor management inventory initiative, where we either buy access or we buy the products, and get the commercial enterprise to rotate that stock so that we don't have to keep it on our books and we don't have to spend the cash. When we went to the desert (and I'll take a page out of Bernie's book) of all the medical items that we stockpiled, only 16% of them were used. The rest of those items were trashed! So we're using that backbone of the commercial enterprise wherever possible to make it worth our while. You've heard enough about Total Asset Visibility, we need that and we need it right now. In fact, we've asked for assistance in that effort to look at how best
to capture the in transit visibility that we're going to need when we move by commercial means. Bottom line is we take pride in supporting America's finest.
Mr. Leonard Drabkin, Esq. A ,sistant Deputy Under Sci retary o( Defense (Acquisition Proc e, , and f>olicies)
Thank you very much for this opportunity. I am from the Acquisition Reform office and I bring greetings from Donna Richborn, who is the Acting Deputy Under Secretary of Defense for Acquisition Reform. We've got a wealth of information that's available to you free in both government and industry. The commercial advocates forum on our home page is a place you can go to assist the government doing market research. It also provides you the tool called IMAR which will actually let you do research about companies and capabilities in the commercial marketplace today. There are two other major places to go. The desk book home page which is our automated reference tool has been out now for about a year. Of note on the desk book home page is the language describing our commitments on cargo preference which we only finished negotiating with our colleagues about a week ago.
Why is acquisition reform important? For a number of reasons; here are three. First, the threat that the DoD is required to prepare for is changed significantly from what it was in 1989. Before the wall came down it was the Union of Soviet Socialist Republics and we built a system designed to defeat that threat and it did-it drove it into bankruptcy. Now, the threat is changed, and on a given day our customer, the war fighter, is required to do any number of different missions, in any number of different places. He or she has to have the kinds of equipment which will allow them to do their job and come back home to us safely. And that makes it more difficult on a system designed to meet only one threat and built over a 50 year period.
Our second issue is the budget. The budget of the DoD has gone down 3 7% overall, but most importantly our pro-
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curement dollars have dropped 67.5% in the last 12 years and there's no relief in sight. That means that the Air Force gets to advertise come fly the planes your grandfather flew, instead of being able to advertise come fly the best technology available in the world. By the way, they also are the best technology in the world, they are just old.
The third problem is the technology issue. One, there are companies that won't sell to us, like Bernie's. They don't want to have anything to do with us because of our rules, because of the way in which we pay, because of the lengthy contracts we have, with terms and conditions that most people consider to be foreign. The second problem is, that technology changes and changes incredibly quickly. And our system is not flexible enough to allow even the best of our people to get to that new technology quickly enough to put it in our weapons systems. Acquisition Reform in the DoD is based upon three primary documents. The first is Section 800 Panel is available on our web page. It is a study of the statutes that effect Acquisition, including logistics of transportation. The Natural Performance Review is another source document we use . It found that the problem in our system is that it wasn't responsive enough . It compelled us to move forward to make our system more flexible and responsive.
And finally, is the Mandate for Change which Secretary Perry announced just shortly after he was confirmed as Secretary of Defense. The Secretary observed that in the defense department we are risk adverse . We built the system over a span of 50 years to ensure that we beat the Soviets; we had technology matched; we could afford to take the time; and in many cases spent more than we had to.
Who is acquisition reform for? It is for the war fighter. Our vision is that the DoD become the smartest, most efficient, most responsive buyer, with best value goods and services that meet our war fighters' needs and also that we obtain these goods and services from a globally competitive national industrial base. That vision has in it two concepts which are new. The first is best value, many people initially thought best
A lot of people don't understand that some of the stuff we buy costs more to throw away when we get ready to dispose of it then it cost us to buy it new.
value was price and past performance, that's how you got best value . But that's not it. To get best value we have to do market research. But the DoD is not used to doing market research; we rely on MILSPECs and standards. We rely on formulas that we apply to find out what the marketplace has to offer. If you're in private industry this is a tremendous opportunity for you to educate your customer and to capture market share. Also, understand that market research is not limited to contracting officers. The war fighter must describe what they need. That is to say they must have an appreciation of what the market may have to offer to solve their problem, and to give them a force multiplier right now as opposed to 15 years from now.
Second, best value connotes managing risk. In the DoD we must stop avoiding it and start managing it. How many of you, when you have the brakes changed on your car watch the mechanic change the brakes, or go to the factory and measure the brake pads with a caliper when they come off the line? My point is, in the DoD we take the risk for brake pads and the risk for an ejection bolt that goes into the seat of a fighter aircraft, and treat it the same. There are some things worth spending a lot of time on like ejection bolts, and there are some things which aren't worth spending much time on at all like brake pads and we have to have a system that allows our people to see that in their best value analysis. Tailored solutions; I get really scared when I hear that to get best value, all of our solutions have to be tailored to the requirement. There is no one size fits all.
Finally, best value considers total ownership costs. And when I ask government people what that means, many say the contract price and the cost of maintenance and sustainment. That's not total ownership cost. In addition there's overhead and most importantly today, the disposal cost. A lot of people don't understand that some of the stuff we buy costs more to throw away when we get ready to dispose of it then it cost us to buy it new. And so we fail to take into consideration in total ownership cost the true life cycle or ownership cost of a particular item, including the cost to throw it away. I told you there were two points in the vision that were truly unique. The other part was where we go to get our requirements. Not relying upon a military unique industrial base which is what we began relying upon in World War II, we have to use commercial companies and their products and solutions to meet our requirements; because we can't afford to keep the infrastructure alive.
What are we doing in acquisition reform? In terms of our initiatives, I gave you the desk book place, a place to go to for reference. Logistics process reengineering is huge on our list because without that we can't get our hands around total ownership costs and if we don't, we won't be able to put more money into buying new equipment. Past performance is important to us, the 4.15 re-write is published today iri the Federal Registrar, it will be effective ten days from today on a monetary basis and mandatory after the first of January. We have the purchase card patent and we're trying to use a credit card to reduce the cost of buying small things. Dr. Hamre, when he was the comptroller, use to ask me why we were spending $2,000 to buy a $150 magazine subscription. Well there's no good answer to that and the purchase card is aimed at trying to reduce our own overhead costs. Single process initiatives is a manufacturing technique Training and education is absolutely essential to teach our work force, both industry and government, about the changes we've made so we can take advantage of them. Thank you very much for letting me come and join you.
BG Roger Scearce, USA
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I want to talk today mainly about operational payment issues and how we're trying to re-engineer them in the DoD. As a matter of backdrop, in 1990 when DFAS formed, we had 332 finance offices. We'll end up with about 19 locations. Now that, in and of itself, is a massive paradigm shift from days of old when commanders had their local finance officer. There are five centers, one for every service to pay their military pay, retire pay, active duty pay and those kinds of things. And then there's the central contract payment center in Columbus, OH, which pays the big contracts. One of my favorite philosophers, matter of fact the only one I know of, Yogi Berra, says "when you get to the fork in the road take it." Okay, I truly believe we're at a fork in the road, right now with DoD financial management and we've got to re-engineer certain practices. If I got about three invoices a month, I could probably pay them on time. But I get about two million invoices a month. I'll come back to this statistic in a minute; 1.6 million of those, 80% of those are less than $2,500. When we formed these task groups we had 58,000 finance and accounting folks in the DoD. Today there's 20,000! By the turn of the century there will be about 16,000. Still the workload hasn't gone down much. Twenty-five billion dollars a month in disbursements, 340,000 GBLs, think about that for you transportation folks out there. Now how do we handle that volume? We've got to upgrade the technology. Automation helps, it's not the complete answer. We've got to get the data through the pipe faster and that gets to ECEI which I'll talk to in a little bit. We've got to get around these manual efforts that everybody's become accustomed to. We've got to do some more consolidations, do we need 19 locations with the state of information technology as it is today? I would suggest we don't. I don't know what the right number is, but it's certainly not 19. We've got political dimensions to work here as we try to get
the right size for the agency to do the department's business. We've got to introduce some new business practices as well, the impact part is one, which David mentioned. CVLs and some far based Acquisition for transportation work is something we've got to do and we've got to get into some internal controls dimensions of making sure the government's getting what it's paying for. Not everyone is honest; we still have the $700 toilet seat, the two million dollar duplicate bill and all of those other things still happen. We need some dimension there that allows both risk management and satisfies some basic internal controls.
This is the current transportation payments process. GBL's generated, paper GBL goes to the carrier, carrier does the work, an EDI GBL is generated and sent to MTMC. For TOPS, personal property or freight the system is suppose to cost it, use the right tariff, use the right tender, and use the right truck or line haul capacity. And then that floats up to Indianapolis where we marry it up and then pay the lower of whatever the costed amount is or the invoice. Sixty percent of the time the invoice is higher than the costed amount. Now what does that mean to you and me? There's re-work associated there, we can't say that the vendor's wrong. So we send it back over to MTMC, they review it. I won't give you the statistic, but it comes often back that the vendor was right. Therein lies a whole one reason for late payments to members because of that cumbersome preparation process that we have. Most payments have to go to the GSA and lo and behold they may find something wrong. Was it delivered, was the right freight and tariff used? This is much too cumbersome. We have over 250 people working this particular process at Indianapolis alone. That doesn't count TRANSCOM or MTMC's overhead working it, nor the ITO's at the installations. I would argue that we ought to move beyond this now and do it a littie smarter, which gets to the payment process as well as the internal controls. Dr. Hamre and the comptroller articulated a vision for transportation business areas. He wanted to make a revolution in business practices in con-
junction with the QDR. Part of that embraced the transportation business. He asked us to fix the tac code prop, the transportation account code. And there is a PAC team working that right now. Can we use the impact card to make this process a little better? What about the internal control, what about potential abuse by not only the user, the TO, but the vendor. And how can we eliminate GBL's all together for express carriership. Long term solution, that's what we're doing now, lead by Mary Lou McHugh, the ASD for Transportation Policy in OSD, we are in the process of re-engineering the transportation business area to include the financial support aspects. So how would the impact part work. Notionally the TO would get an order out to a carrier and as a part of that they would include the impact part number. A carrier does its thing, charges it just like anybody else that uses the impact card would and the bill comes back. It's verified by an approving official later on after there's a reconciliation process at the TO level. That invoice comes in, it's certified, we get it and we pay it. Basically, we get a reconciled, certified bill which supports the certifying officer legislation and we can EFT that payment out the door the day we get it, especially if we get it electronically. We have developed a purchase card management system that will allow electronic integration that will not only impact our bill but the reconciliation and the forwarding of that to our dispersing system (in the Army's case in Indianapolis.) That is the way we need to go in my mind, that gets to about two million GBL's a year, 85% of which are valued at $2,500 or less. We don't even need to change any of the thresholds that David alluded to earlier. And we can shut down a couple of systems and all the associated information management apparatus that goes along with maintaining and supporting the system. This is the way the private sector does it why shouldn't we adopt the same practice.
What about a commercial bill or a base contractor-best value contractor)? We've got some good ideas there that simplify the payment process. Instead of going to Indianapolis, the bill would come to an OPLOC, to a specific vendor
pay activity where the accounting is maintained. Some minus signs, there's a lot of management data that the two systems CFM and DTRS generate today that will not be generated. We've informed Ms: McHugh and General Montero it's about a four page Excel spreadsheet on the number of pieces of information that we would not have the capacity to provide. And there may be some customs clearance issues associated with not using the GBL.
We ought to think that, folks of yesteryear just didn't simply make bad decisions. They had reasons they set it up the way they did. Statistical sampling, I mentioned transportation payments and GSA's sampling and most of the internal control issues associated with that. Carriers today have to keep a hard copy record of the shipment for four years and GSA goes out and inspects that every so often. Our biggest challenge is personal property charges. The carrier does the move right, now we sign off on a pink DD Form 619 if you're military or civilian, saying the carrier did everything required. That comes in with GBL hard copy and is easily costed once it's entered. In a purely ECEDI environment where it's all shoved in electronically, there is no way to get that because it's post delivery if you will. We are testing or getting ready to test an EDI transaction set that brings the GBL in electronically and lets the carrier annotate in text what was performed. As we do today with assuming receipt and delivery, we will assume that is correct and accept it, cost it, and pay it. That's our going-in position, what we're going to do is sample those on the back side, hopefully via GSA, and then make sure that the 1619 is there as part of the record set, that the carrier did perform those functions, and that there's a signature on it. It's the only way that we could get around the GAO approving this unique change in business practice and get it all electronic. If we did it electronically, obviously we'd turn around and pay the same day. Basically (and sorry this is a paradigm shift), right now the transportation pay triangle computes a GBL, an invoice, and an assumed receipt acceptance. We go ahead and marry all of that up and make the payment. Right now we pay each individual carrier 1.7 million payments a
year. We have to move to an environment of a certifying officer where the installation transportation officer certifies something using a credit vehiclethe impact card, but it could be a line of credit or anything else. And what's in it for the bank? Well every time the carrier drops that VISA card chit they get a percentage pop on the back side. So the banks are very, very much behind doing it this way because everybody makes a little money, if you will. For us, instead of getting 1.6 million payments on the margin, we get a few thousand. All of which are summarized on a VISA bill and we make one payment. That means I can downsize now a few thousand more employees. The payee under this paradigm obviously is the credit provider, it's not the carrier. The triangle was built on risk avoidance to the taxpayer. I like the foundation of the other side of the model that says accountability and responsibility. If we can get there and empower those folks'to do their job right, both coming to me as well as our folks paying them, then we're much better off and the process is a lot leaner as a consequence. So in summary, we're not going to do business the old ways. We've got three active CAT teams working now to do business differently in the transportation business area, we've got the IG on board. We've got to achieve a difficult cultural change mainly in our business areas but also I would suggest in the transportation area. With that my last quote from Yogi "the future's just not what it use to be." Thanks very much.
Questions & Answers
we starting from; in most cases they don't have credible information.
Scearce I've got a couple here dealing with the I.M.P.A.C. card (International Merchant Purchase Authorization Card).
Madej
Q:As you streamline to improve your various business processes what has been your biggest obstacle?
A : I would say today it is that the J-\.Jack of critical information, benchmark information from our customers. Certainly our customers can articulate a clear vision in terms of their objectives of the end result; the question is what's the benchmark information? Where are
:When will the $2,500 limit on the I.M.P.A.C. be raised and to what level?
QA:I think we need to finish fielding the I.M.P.A.C. card at the $2,500 level across the DoD. Right now the Army's in the lead, the Air Force has been using it for awhile. And the Navy's just not coming onboard. 80% of our invoices, about 1.6 million a month are at the $2,500 level. The sensitivity analysis we've done to raise it to say $10,000 garners up another 4% of the invoices. So we're not going to get much if we did raise the limit to some large amount.
Q :Why can't transportation payments be on an American Express government account with no dollar limit?
A:The American Express travel card :was designed for military and DoD civilian personal travel expenses, both TDY and PCS. The I.M.P.A.C. card is designed as an acquisition vehicle for purchases of services, goods and commodities to support our war fighter. There's an effort ongoing now being negotiated with GSA to make an all in one card except for personal travel.
Drabkin
A:Let me just follow up on something that General Scearce said about purchase card limitations. To get the purchase card limit raised we had to go to Congress. To raise the limitation beyond $2,500 would require us to go back to the hill and deal with the constituencies. So the chances of us raising that limitation any time soon aren't really good. In fact most of our colleagues on the hill tell us that they think we've done enough Acquisition reform in the legislative arena. They'd like to see us implement it now in the regulatory arena.
Q:Is the current process built on trust? How do we deal with the obvious dilemma?
A : We have two initiatives that will J-\.h. elp us deal with this. First, is the use of this integrated product team or teaming. There is nothing, that has prevented us from teaming with industry at an arms length as a partner in a transaction. The second part is in the risk management There is a certain amount of educated chance -taking that people do on a day to day basis.
Q:How can you count on a specific company to be available to provide the specific services when needed in a long term arrangement?
A :We've been dealing with, the .t'"\.a ssets based carriers for over 50 years. We meet with them on a regular basis, we review their financials, their operational requirements, where they're at, what they are doing for the future, to make sure we're dealing with a company that's going to be there. Contractors have been supporting the military since the revolutionary war. This is a $250 billion a year operation, so there's a huge market. Problems have been rare.
Proctor
Q:How do you maximize using third party logistics while maintaining core competencies and organic capabilities?
AWhat we ' re looking at right now n our agency is what we need to do to assist the war fighter in going to and prosecuting war. And if it's beyond that, we're looking at going through a business case for those things that don't really add value. As we go through that process, we're going to take very hard look to see what could be done or should be done in the agency and what should be done outside the agency.
Q:Since Desert Storm was such an atypical war, should we use it as a benchmark for future requirements, i.e. medical supplies?
A:I hope I didn't mislead you to think it was merely a requirements issue. Two issues were involved, first it was a customers choice issue; and, secondly what we have on the shelf was pretty much a military spec requirement. The notion was, not that it was atypical in terms we did not have the expected number of casualties; but, that what was consumed accounted for 16% of what was stored in a depot someplace .
Scearce
Q:Vendor payments are in arrears at many locations. Allotments for retirement pay are typically two months in the arrears. Customers are being tasked to sort bills by branch of service. Is there a get well date in sight?
A : When our agency was formed, we J-\.i nherited over 270 different plans and accounting systems. Now we have 19. Those 19 operations now support a multitude of installations which all mail us receiving reports. 90% of the problem is attributable to the lack of a receiving report from the using or the requesting installation. Until we can get out of that requirement, we're still going to have vendors being paid late. We've run a test, 99.6% of the times that that we did pay the bill without the receiving report the goods or services was in fact rendered. Retirement pay is the area where I have the least amount of complaints.
As one of the customers of the DFACs Columbus, I can say that we are now getting many invoices turned in six to seven days-that's incredible.
Q :What practices in Acquisition
. Reform ensures critical elements in our defense industrial base, i.e., US capabilities to build submarines or produce armored plates for tanks?
A:Acquisition Reform and our vision of going to a globally competitive national industrial base does not include cutting off our nose to spite our face. There will always be a small unique defense industrial base. Our goal is not to eliminate that which we need, it is to identify that which we need and focus on the understanding that what goes into nuclear submarines
is a lot of components and many of those components can be found on the commercial market place. While we can't find a propulsion unit that's commercial, we can find indication units, we can find ventilation units, we can find all kinds of avionic packages and our focus is on getting as much commercial as we can and shrinking the military unique nature of our base to the right size. To the size which we have to sustain to keep our technological superiority.
Weber
Q
:When will the impact card test begin?
A:The objective was to start by 1 October; I don't think we're going to start at that time. We're hopeful of starting the sealift test. That involves Sea-Land and some cargo moving up to Iceland.
Tuttle
Our allotted time is drawing to a close do we have any closing remarks. Let me just to say that the paradigm is all over in one form or another and it should be. The question is not how to resist it, it seems to me, but the question is, how do we do the smart thing to bring in those business practices that Bernie outlined so well and Pete is using and incorporating them into our processes. Realizing that the fact of life is: if don't change and cut our infrastructure, substitute, not only re-engineering processes for those things that stay organic and outsource those things which the commercial sector does very well for the rest of society today; then we will not modernize. And with that, thank you very much for your attention this afternoon. You're a great audience-good questions.
Summarized by COL Denny Edwards, USA (Ret.)
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(left to right) Richard A. Bauer, Senior Principal, SABRE Consulting Group; Richard Smith, Senior Vice President & Chief Technology Officer, Carlson Wagonlit Travel; Nancy Johnson, Director, Joint Total Asset Visibility Office, Office of the Deputy Under Secretary of Defense (Logistics); John Andrews, President, Technology &Senior Vice President, CSX Technology (Panel Moderator); LTG Samuel Wakefield, USA (Ret.), Manager, Total Asset Visibility, Advanced Programs Division, Raytheon Tl Systems; Wilham Leary, Deputy Director for Joint Requirement Analysis &Integration, Defense Information Systems Agency; Chet Marthng, GTN Program Director, Lockheed Martin (2 Integration Systems
Editor's note: This article is a summarization of a presentation made at the 1997 NDTA Forum in Oakland, CA. NDTA regrets that due to audio difficulties on site, some portions may be missing or incomplete.
Mr. Andrews, the panel moderator, started by stating that this panel has a close tie-in with the "Business Practices" panel. Information technology is necessary for a transportation-based time-definite distribution system. The panelists are leaders from both government and industry who are actively involved in several aspects of the issues being discussed. Subsequent to introducing all panelists , Mr. Andrews asked Chet Martling to deliver his opening remarks
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The GTN program is greatly affected by emerging technology, but the real issue here is to be sure that the technology that we bring to bear on the program provides effective solutions to the people that need to use the system. I truly believe that the equipment in place for GTN can support not only TRANSCOM information but all of the users throughout the Defense Transportation System (DTS). Certainly there's been significant mention of GTN throughout the
Panels, General Kross mentioned it as being the capstone of DTS command and control and Intransit Visibility (ITV) capability. The system is operational today. But we're a long way from taking it where it needs to be. So as I go further into the discussion, I'll try to give you a quick view of just the type of capability we're going to bring to bear with GTN over the coming months. GTN is being developed for USTRANSCOM to provide support to the component commands and provide support for people who really need access to the information. The Intransit Visibility capability piece of the system is currently operational and was rolled out in early August. We rolled out GTN in late 1996 to satisfy some internal requirements at that time. However, GTN achieved initial operational capability earlier this year and we're currently in the process of developing a significant capability for the follow-on deliveries. Our goal is to make GTN an enterprise information system that supports the entire need of the community. I want to talk to you a little bit about the GTN concept. We don't really create a lot of data ourselves, we essentially receive data feeds from a lot of different sys-
terns being employed throughout the DoD communities supporting a number of different needs, cargo movemen ts, passenger movements, requisition status and requisition schedules. In the future, we're going to tie into Global Command Control System (GCCS) for movement requirements, we're bringing interfaces in right now to give us a good overview of the status of assets and resources required to support all of those missions. We receive this information in many different ways and look at the transaction to make sure that it's rationalized, de-conflicted within itself. We have created a significant data warehousing capability of information data to support all of the application capabilities that we need to build the GTN. There's a significant data warehouse of information that's currently over 43 gigabytes. To give you some idea of the performance things that we do, we receive that information from many systems, 80% of the information received is posted within five minutes of receipt, it ' s replicated both on the low side, the unclassified side, and the high side and that replication process takes place in a matter of seconds. The
information's available at that time for anybody who has access to the system with the application capabilities we've developed. When we started this program, we really didn't know an awful lot about how we would leverage the web-based technology. Well, in the last 12 months, almost all of our new application capability is being developed using this web-based technology, and we have a lot of this infrastructure in place. Below the surface, things that people never see are the significant infrastructure capabilities: the computer hardware, the operating systems that we're running on, database capabilities, all the software that controls the input and output in the system, the application framework we've established; is compliant with all the architectural standards that are currently required by DoD for information systems. But what's really important to the user is not what's below the water line but what's above the water line, what applications he has access to and what capability he has to use the information that's in this warehouse. Going forward, we need to assure better application capabilities, more decision support tools, to leverage some of the new technology coming from DARPA. And we're working on that very hard in the coming months to make that a reality. Going beyond the ITV capability currently in place and do the things I just talked about, we really have to use the commercial off the shelf (COTS) products. There are pros and cons on COTS and I know people have some issues with COTS, but 90% of the capabilities that we put in place in the system are really derived from commercial product offerings. We could not have built this system on our own in the time that we have it built if we had to do the more traditional inhouse build process. Underlying the whole system, we're using applications that control only input and output. Certainly there's the need to re-engineer pieces of it, there's always going to be need to re-engineer. I don't know anybody who's ever built an information system of this magnitude that after it's completed, couldn't figure out ways to do it better. That's
one of the benefits of using COTS based strategy. You get the benefit or the evolution of products that come from the COTS supplier. They are responding in many ways to their customers in the commercial market and most of the people we use in this have much larger market share in commercial than the DoD side and we can benefit from that. Let's talk a little bit about going forward. There's a lot of discussion by speakers far more distinguished than I about focused logistics, the need to meet the requirement of JV 2010, doing more with less, improving processes and using information technology to enable the suppo rt of other processes in a more effective way. When we launched into web-based applications, we had a list of about 20 risk factors that we had to satisfy in our minds to be able to build these capabilities effectively. Well, we worked our way through all those technical challenges in the last couple of months. There are still some ahead of us but I believe that we're going to get to where we need to be very quickly. Also EC and EDI, this is not new technology per se but just one that we need to use more effectively in GTN and I'll talk about that in a minute. These are some of the capabilities that we hope to bring to bear in the near future in GTN. Commercial EDI is a number one priority to bring the ability to have access in GTN of cargo and material being moved by commercial carriers. Our goal is to put in 20 carriers by the middle of next year. Now 20 carriers may not seem like an awful lot but we've done some statistics on this and those 20 carriers essentially carry 80% of all the cargo being moved in support of the DoD today. So if we can do that, I think we will start to fill a significant gap in the Intransit Visibility needs that's required for effective support of the DoD mission. Customization is also a key element of our going forward strategy. The ability for users to have a defined profile of the type of information that he needs and have him be able to customize the type of report that you receive from the system. We've developed an evolution plan for GTN, at this point it's only in
draft. That evolution plan essentially establishes the framework for how we're going to go forward. And we're working with DARPA to try to use some of the technologies coming from them and hopefully we'll be involved with the joint logistics ACTD programs in the future. Now in summary, GTN is operational. We're going forward and our goal is to make it a more effective system in the future. Thank you very much.
Moderator Question: Chet, you mentioned DARPA several times and of course DARPA has many strategic initiatives going on, how do they impact what you're doing in GTN?
Answer: Well I think the thing that we see in the future is joint logistics ACTD, Advanced Concept Technology Demonstration. We're working closely with DARPA to try to use that vehicle as a way to bring technology into GTN very quickly. As I mentioned, there's a competitive bid out now for contractors to participate in that program very directly. We believe we're in the final stages and hopefully we'll be successful in achieving the role of that program so we can use that type of concept demonstration approach to bring things to bear very quickly in GTN.
Mr. Rick Hauer .\enior 1'1 i11< ipal
I intend to address global transport networks and issues or concerns on the commercial side of time-definite transportation. Like most of you I had a paper stuck under my door this morning and when I was reading it I kind of got a chuckle that I'd like to share with you which will illustrate some of the points I'm going to make. It says in here that my company, the SABRE Group, has been named the leading computer reservation system four years running by World Travel Awards, maintains more than 50 million airfares, processes 160 million requests per day, and processes 5,200 requests for information each second. Offers reservations for more than 350 airlines, 30,000
hotel properties, 55 car rental properties, interfaces in many different languages. Doesn't say one thing about cargo time-definite transportation or anything which is the subject that we're talking about today. To me it illustrates a glaring hole in the way scheduled airlines invest their entire business. Currently, the way airlines look at the business is, you have agents, transportation, agents and a consignee, and of course international shipments are normally worse. There is quite a separation between the transportation companies and the actual shipper. Freight forwarders have done an excellent job in filling that void which has changed the way business is being run. It means that freight has to be offered by scheduled airlines as essentially an industrial product. It's only a piece in the supply chain required to support
Currently, the way airlines look at the business is, you have agents, transportation, agents and a consignee, and of course international shipments are normally worse. There is quite a separation between the transportation companies and the actual shipper.
time-definite transportation. Airline support systems are not fully integrated with other transport haulers. It would be simplistic to hope for standardization here quickly since the characteristics of each motorcar are different. But I think the agent for forwarders here is well placed to meet the primary obligations. The scheduled airlines offer a global network, I think everybody recognizes that and that there's a lot of flights between all the primary city pairs in the world, so there's a lot of business. They also offer nationwide systems, a reliability that allows shipments to go from and to any airport in the world. Lack of cargo EDI within the
airline community is now being addressed as something called the cargo community systems controller. The airlines are looking at this very dominantly as I understand it as the information to themselves. Although forwarders, truckers, financial institutions and other groups have been invited in to express their needs and I certainly would think that the military would be interested in participating in that as well. The integrated operators FedEx, DHL and UPS have jumped in to where the scheduled airlines have not been able to serve customers adequately themselves and they are doing an outstanding job providing door to door service. The rising success of integrators is fairly well known . Many companies of course have incorporated use of air freight into their total logistics strategies. The growth of technologies and its use by industry has led to shorter product cycles. Maintaining large inventories of an outdated product is expensive and to improve margins more and more companies are looking to outsource their logistics operations. We do see inventory levels cut and carrying cost. So many companies now fill orders and ship directly to where it's needed. This is one of the shifts the US military is looking at if I understand their direction. And in a global timepressed marketplace manufacturers rely on their information systems to better manage their product movement over the supply chain. An efficient logistics system depends on the delivery of goods on pre-determined schedules and information systems are needed to alert customers if there's a change in these delivery times. In thinking about the use of time-definite transportation for our military sector, certain issues cropped up and I thought I'd share them with you. The first one is of course track and trace. In my experience the customer wants to know where their shipment is and you've developed a very good way to do that, through their systems as a matter of fact. You can track their ship at sea now. Tracking or tracing is something that has to be addressed more effectively by the scheduled airlines if they are going to be able to participate in this. Documentation and customs are areas the
military has probably not had to deal with up to this point in time, because it's been in a closed loop system. But if you go to time-sensitive delivery, you will have documentation and customs requirements when you ship internationally. Schedules and routings, as I mentioned before, the airlines serve all over the world but the military may have special schedules, routings and shipments that have to be taken into consideration-things like sensitive and valuable parts for materials. The military has different requirements than the industry type of shipment; they are weight, volume and density issues. Commercial airplanes are built to different structural limitations than military aircraft and if you're going to convert to a commercial system those weight, volume and density issues must be taken into consideration. You generally know what is an acceptable reliability factor for the transportation system you ' re using, so the way we move this forward, from my point of view, is to develop some form of mutual understanding on what exactly the military needs are and how that fits into the current transportation system itself. We should be the integrators to provide these certain services, scheduled airlines can provide another service. But the role of being in support is under estimated in this dialogue and how to meet your needs. Tracking and tracing phases is a key issue as is automation standards across the multiple platforms that are in effect. However, standards are those that airlines could use and is probably the most effective vehicle for dialogue to establish standards that everybody will recognize. It seems to me that the case you make to take immediate action on changing some of the military requirements now, they were not sensitive materials and some of the benefits that commercial communities are seeing is a result of using just in time processes, we could start to use in the military right away. I would recommend that if you want to move forward and help industry, that there should be a strong liaison with the industry, community cargo and computer systems, groups that are already set up and I think there could be some negotiation on capacity, systems with
conditional needs and other requirements could be phased in over time . The key being to get started. I think the move towards time-definite transportation by the military would provide a big boost in the automation capability of the industry. I started out saying most of the automation focus on the airline side has been in the passenger field. Getting passengers to planes, but that doesn't mean that industry doesn't want to invest, it just needs a big impetus to get it started.
Moderator Question: Rick, you mentioned special handling requirements. How do you think those special handling requirements can be addressed by the airline industry?
Answer: Well, special handling requirements, there are packaging standards in effect in the industry and there's also oversized shipments and as I mentioned the military has very specialized needs in that area. There may be new computerization that's required, future aircraft may need to be modified to meet weight requirements. There's lots of things in the industry that can be done if it's aware of what the customers' needs are. Standards are necessary to be adopted at an industry level to facilitate the use of multiple carriers to get shipments to the ultimate destinations.
Ms. Nancy Johnson
Dircctm , Joint Total 4sset \ 'hi/Jilit1 Office, Ofthr o( the Dcp11h L fl{fCI Se, rctm · of Defense (Logistic<;!
It's indeed my pleasure to be here this morning to give you a very brief overview of the Joint Total Asset Visibility OTAV) Program. I'm sure that you've all been here for the first two panels and recognize that Joint Total Asset Visibility has been mentioned in almost every briefing you've heard thus far. It's really difficult to talk about Enabling Technologies or Joint Vision 2010 or Focused Logistics or any of those initiatives without mentioning JTAV. But what I hope to do over the next few minutes is give you just a sense of what Joint Total Asset Visibility is and what it's all about. JTAV is the
capability to provide users with timely and accurate information on the location, movement, status and identity of units, personnel, equipment and supplies. It also includes the capability to act upon that information to improve overall performance of DoD's logistics practices. First of all, JTAV is a capability. I believe you heard Mr. Willis mention this in his presentation. It is not an automated information system it is a capability that accesses existing automated information systems. You know the data that's required to provide users with information they need is out there somewhere. So the job of the JTAV function is to find that asset information and deliver it in a fused
enablers that we're using to capture this asset visibility information. AIT describes a variety of read and write technology devices that must be integrated into an AIS so we can capture the visibility of that information. In March of 1997, the senior leadership got together and tasked theJTAV office to pull the community together and develop an architecture for the year 2000 on where we wanted to take this JTAV capability. The architecture that's in effect today is interim because we needed to come to grips with where do you want to go with this capability for the year 2000. I'm sure you've heard in General Cusick's Global Combat Support System (GCSS) brief, that his con-
But we're talking about individuals, the sustainment base to include assets that are in storage, being maintained, and assets that are also being purchased or repaired. So it's a ·really big challenge. It also includes those assets as they're moving from POE to POD, whether they're moving by air or sea, whether those units are self deploying units-the challenge is absolutely tremendous.
picture to the customers that require it. When we talk about assets, we're talking about units, personnel, equipment and supplies and when we talk about visibility, the visibility includes the location of those assets, the assets as they are moving throughout the logistics pipeline, the status in terms of requisition status and unit status and it also includes the identity. But we're talking about individuals, the sustainment base to include assets that are in storage, being maintained, and assets that are also being purchased or repaired. So it's a really big challenge. It also includes those assets as they're moving from POE to POD, whether they're moving by air or sea, whether those units are self deploying unitsthe challenge is absolutely tremendous. There's a very small staff that depends on all of you and your infrastructures to help us build this capability. Automatic Identification Technology (AIT) is but one of the
cept of GCSS is to have any user, anywhere, sit at his desktop workstation and get answers to questions that he has. It was a true purple group of people that got together to come up with the best solution for achieving the architecture. It's a very big challenge but we're taking that challenge on and we're making progress. When a customer sits down and asks a question, asset visibility or total visibility depends on who you are and what processes you go through on a daily basis. You heard through the briefings from yesterday, one size does not fit all. This is a very high level architecture that has to be taken to specific user communities and then tailored to meet that customers' need. You've heard all of the horror stories about the 40,000 containers in the desert where you couldn't find Meals Ready to Eat (MREs) when needed for the troops; we're trying to solve that problem. But an item manager, let's take a wholesale
integrated material manager at an Army Inventory Control Point (ICP) for instance. In my mind that individual needs to know, if I'm the manager of boots, I need to know where all the boots are. But if I'm G.l. Joe in a foxhole I don't need to know where all the boots are, I just need to know where the boots are that I sent in a requisition for a week ago. This capability is being used today to do that type of thing, at the operational, strategic and tactical level. In summary, I've tried to give you a sense of what JTAV is in the time I was allotted and hopefully I've done that. Some of the benefits that we see to date with this JTAV capability, the biggest one in my mind, is the confidence that it has instilled at the user level. I wanted to see how this capability was working firsthand, so I walked the pipeline from New Cumberland to Delaware to Ramstein, all the way down into Bosnia. And what I found, is when you get down in the box where the rubber meets the road, that small end of the funnel where the soldiers, sailors, airmen and marines are trying to manage this huge infrastructure they ' re using the JTAV capability at that level to do things like manage their MICAP list. The Air Force is one of the big users in Bosnia right now for managing their MICAPs and what their finding is, that they have these high priority requisitions that are on back order at the wholesale level and there is an Army unit next door that has excess of the same item. It's causing an avoidance of duplicate orders. If you wake up in the morning and expect to have had an asset delivered to you and it has not arrived, the tendency is to re-order and re-order and re-order until you receive that asset. But this capability has allowed that requisitioner to see their asset moving toward them and it has avoided those duplicate orders, and of course that falls right into avoiding unnecessary procurements. JTAV is complimentary to various corporate information management efforts, it's compliant with GCSS and GCCS and of course all of the things that lead to the reduction in logistic costs. Our primary goal is to support the war-fighting CINC. Right now the capability is fielded in the
European Command, Atlantic Command, and Central Command. We ' re about to take it to the Pacific Command. In a nutshell, I hope I've given you a sense of what JTAV is and also to be part of the building and fielding of capability that's so sorely needed within the defense infrastructure. So I thank you for your time
Moderator Question: Nancy you talked about your year 2000 target architecture. What's your as-is architecture right now and what are some of your thoughts in terms of your migration plan?
Answer: Okay, good question. The capability that's built into the CINC today is a relational database where we have pre-populated, very CINC specific data within the theater of operation. The goal, like I said, is to access the information at time of the query. But there's things like communications infrastructure that's precluding that capability from being in place in today. So the as-is architecture is really the pre-positioning of very CINC specific data within the area of operation.
Moderator Question: Finally, does JTAV require assured communication?
Global Command Support System (GCSS) is built around many of the main themes of this conference and many of the main themes that are occurring in industry and the issue of having to modernize information infrastructure-whether militarily or commercially-in the 21st Century. What I'm going to try to do is a little bit eclectic today, but I'm going to try and make some sense in the technology pieces and management approaches we're using. The most important part of understanding what GCSS is, is that it is an initiative and that's somewhat political so it doesn't get designated as an
acquisition program, but is an integrated initiative across the department where we use a lot of infrastructure and technology to be able to improve and modernize the different mission area applications. We have stovepipes and it's not going to be simple to transition from the world of stovepipe program management into building corporate or DoD wide or enterprise information capabilities. But if you think of some of the themes that you've heard over the last couple of days, that is the nature of the capability that's required to operate in that changed environment. Nancy was talking about a piece of it. There are clients both in the CONUS base and in theater and we are trying to figure out how those pieces should fit together so we have a rich information environment and an ability to integrate within that information environment. I need to take the systems out of the stovepipes, link it with the processes and kill them as capabilities That is the essence of the concept of clustering that we're trying to do. The important thing is that the current developmental structure does not necessarily lend itself to linking the process with the linking of combined capabilities so that each of the programs tend to work their own interfaces, development and information piece. We want to move towards building these things as integrated capabilities, and I think you can understand and the CINCs really like that concept. This is just to give you a sense of the scope of the areas that are being worked in GCSS with the main mission being medical and of course transportation. We are also working on active disbursements. We are working in procurement, which happens to cut across disbursements . Thls is not a trade off between warfighting and cost effectiveness as both of those things are in the equation all the time. There are three areas of operational focus for GCSS and we'll probably build on this and peel it down somewhat. We have the world of business operations, the wholesale logistics, the financial systems, the payroll systems, the medical hospitals in the US, etc. The kind of information and systems you need are somewhat unique to your environment . Now you also need information
from that environment that has to go to the CINCs and the Joint Task Force GTF) where they may be looking at the common operational picture that's in Global Command Control System (GCCS) and linking in a picture of asset visibility or log information in with the command and control battlefield situation. Those are the kinds of bridges we're starting to make and is the reason why there are different characteristics in this arena where we would get a common operation picture and not necessarily have a common operation picture back here because they don't have the same kind of tactical or mission need back here toward the management picture. We're getting close to having completed the GCSS operating architecture which should cross the point of sustainment and a number of other areas. How the processes fit and that will be a very good framework to show how we ought to break these things down. We're dealing with a huge community in the GCSS arena and structuring it is a major part of the battle, and that's what we're going after right now. I, in my responsibility, work more with the user community to bring them and integrate them into the infrastructure. We have all of our discussions about the same kind of technology we've dealt with individual stovepipes, learned in the second phase how to take the client end of that part of the stovepipe and get into common box, but we haven't really integrated the picture yet. Integrated Information Technology gets us into enabling Joint Vision 2010 and getting into the 21st Century. Because all of a sudden, all the infrastructure, information and consistency pieces that are necessary to be able to allow these missions that we've talked about have to be in place in order to work this way. That is, actually the C-4 warrior picture, but I didn't think the transportation people would mind too much-it represents the same for all of us and in some ways I think that's the future. We're going to be in a wired military mission environment and I think that's a key thing we have to recognize indeed to make sure that we move ahead to get both infrastructure applications and management structure in place.
Moderator Question: Bill as you look at this important initiative and program what do you find is the most difficult challenge in putting it together?
Answer: Manning the department. Having watched some of the things we've gone through the last few months. The toughest problem is sticking with an arena with 20,000 systems, hundreds of thousands of people, each having a history of building things on their own. We're now asking them to change how they think about building systems, how they manage that process and to build integrated systems. For example, how do I get, because we don't own the application, how do I get an agreement with a service to commit to bring their application into the GCSS environment. You've got a Title X issue within the DoD. Now I'm not asking you to break that Title X issue now, but it is going to be critical in finding ways to cause integration, because that's what this is all about. We're all talking about both integrated infrastructure and integration of systems.
Moderator Question: You mentioned of course Asset Visibility, TRAC and TRACES, major components of the program. How do you intend to deliver that functionality?
Answer: Well, we won't, Nancy willalthough she tells me I am. Seriously, it's not a thing that one program can do, it's all of us working together. Communication links, which we need to work with the services, we own the backbone, they own the tactical and the base, there may be a communication problem, like Nancy talked about in tracking asset visibility or transportation assets, and we have to corporately get together to solve this. So I would say it requires us to work the infrastructure in parallel with the applications.
bit about the question and answers. After I'm finished, I'm going to ask you questions and see just how close you're paying attention. (See note at end of section.)
LTG Samuel Wakefield, USA (Ret.) Manager, Total Asset visibility, ,\dvanccd Programs Division, Raytheon 11 Systems
Well I got a lot of advice during the break. I'm going to change this a little
My challenge is to show you some enabling technologies to get from the source data where things happen, the very beginning of the routine, up to that management information system. Because I submit to you that what we're really trying to do is find out where is my stuff and when am I going to get it? And what condition is it in? What can I do about it if something has gone wrong? That is true in industry as much as it is in the military. I can clue you, I've been out in the industry for three years, they don't know where their stuff is, although a lot of them will tell you that they do. The interesting thing about that, I believe, ideally we would all like to sit at a console and look at all of this data that's being massaged in very sophisticated algorithms and make a decision with certainty with that information that the decision carried out via the automated system itself will be executed. Many of us in the last 30-40 years have been seeing the sophistication of software and hardware development in this particular industry of information. And we've all seen garbage in is garbage out. In today's world it's a little bit different I think. It's not only garbage in garbage out, it is nothing in is garbage out as much as the other. The more we speed up the supply chain in logistics, the food chain in the information flow, the more we have to take human beings out of that equation and do it in an automated fashion. I'm privileged to serve as the president of a consortium between Raytheon TI and BDM for the DARPA program for advance logistics. A program that DARPA has undertaken for a five year effort to try to get into the next generation of technologies to enhance both commercial and logistics practices. This is a one hundred million dollar program. It's finding the threads where we can exploit the future and bring it into today's world and GTN to GCSS in a rapid fashion. Someone had mentioned the Advanced Concept Technology Development (ACDP) programs
that we are speaking of. So to give you a little appreciation of what the future looks like, and I see a lot of Captains, and Majors and Lieutenant Colonels in the audience. Wouldn't it be nice to do what this tape that I'm going to show you will do for you if you were in the field today and had to move a heavy equipment transport company to move an infantry force from the ports to the tactical assembly areas. As you watch this four and a half minute tape you will see many enabling technologies, voice mediation, sentinels, intelligent agents and new concepts of how to integrate sophisticated automated information systems.
Moderator Question: Why does DoD require RFID technology?
Answer: In all of our conflicts the United States has supported the fighting force superbly-but often times inefficiently and with large, redundant supply stockpiles and logistics forces requiring significant resources. In the dynamic and chaotic state of mobilizing, deploying and fighting anywhere at anytime with limited forces we must use technology to improve our capabilities. RFID offers the DoD the capability to track and monitor force deployment efficiently and with few personnel. RFID provides situational awareness for not only the logistician but the entire command and control structure. The technology is proven, available and economical and the DoD is actively pursuing its use.
Moderator Question: Can't EDI solve the data source issue?
Answer: No. EDI has a significant role in providing information for decision makers. Timely, reliable data input is fundamental to the process. Data input into management information systems has not kept pace with computer hardware and software developments. Bar coding technology has improved many data input processes but is labor intensive. Essentially we rely on the keyboard and bar coding for data input. Voice and RFID technologies offer significant improvements to these methods and will greatly improve the use of ED(
Moderator Question: When will the Remote Asset Visibility technology be available for commercial use?
Answer: It is available today. Our company has recently signed a significant contract with a major construction equipment manufacturer. Our competitors are offering similar products. Technology improvements have resulted in cost reductions which provide pricing acceptable to the market. We have high expectations that this is the next wave of major business process change.
Mr. Richard L Smith 'Ir. \//~ Chief Tc< hnology Officer
Carlson tVagonlil J ravel
I am pleased to be with you today. It was interesting for me to realize only recently that the smart card allowed a terrific enabling technology that's actually been around for 20 years. It was developed actually in France and that's probably one of the reasons why it has more wide spread use in Europe than it has in the US today. In fact, if you measured the use of the smart card, the US is using about 5% while the Europeans are well into the 8090% range. But it's moving fast and more of us are about to be using that enabling technology. In the future, the card may allow us to really keep track of everything you like in this light in your travel experience, including your profile. When the corporate card and the Act I products are used together in an integrated solution we can collect a massive amount of information on travel expenses stored in the data warehouse to allow you to access it. This provides a complete picture not only of the transaction activity by client, but also allows us to measure and ensure compliance is in accordance with the policies that have been established. It helps measure our service level to you. I'd like to take just a couple of minutes to discuss what we call our traveler management system, our vision of what our call center should or would look like in the near future. Again, before we begin to redesign the process we asked ourselves and our clients a very basic question. What would the perfect trav-
el management system look like? We think it may look like a caller to Carlson Wagonlit inputting a unique membership number into telephone via voice, keypad or other similar devices. At the other end, the new travel management system will immediately provide our agent with a user friendly graphic screen displaying all the relevant information about that individual traveler, including travel policy guidelines, airline, hotel and car rental preferences and even past problems and complaints. Imagine if you will, calling your travel agent and having the conversation begin this way, thank you for calling Mr. Smith, we're sorry about the inconvenience you had during your stay in Tulsa last month, but I'm glad we were able to find you another hotel. Now doesn't that sound a lot better than, can you spell your name for me please? The traveler management system will give all of our customers easier and more timely access to our agents, ensuring their travel arrangements comply with policies and regulations. We'll also provide more flexibility for the traveler. Because this new system will replace the cryptic CRS scripts with the graphical user interface and our travel counselors will be able to focus more on customers' needs as opposed to CRS system needs and therefore deliver an improved and consistent level of service and quality each time, every time, to all of our travelers. As we move forward in rolling out the travel system, we also are moving forward to a more efficient call handling structure and system. Today our calls are handled by many agents in many different locations. In the future we will have more of a virtual call center. A call from San Francisco may be routed to New York or to London depending upon which provides the greatest convenience and fastest solution for the customer. In addition, when you travel your record will move with you. So it's always available at the closest point to access either by you using our self booking product or by the agent if you call them. We're also continuing to evaluate voice recognition systems and are exploring the benefits of systems that really worked. Eventually,
Again, much of what the commercial world was doing from a market standpoint related back to really Panel I, who was outlining strategy, the critical success factors and what capabilities needed to be applied to meet those critical success factors.
voice response units may be nearly as good as talking to a live person. But today and in the mid-term, I'm putting my money on people and the value they can deliver with mind ware. Carlson Wagonlit has combined two centuries of experience helping travelers meet their destinations and also helping companies meet their business and expense holds. Combining new enabling technologies with our experience is our greatest advantage in this competitive environment. Thank you for your attention and the opportunity to provide you with my thoughts.
Moderator Question: Dick, clearly one of the initiatives you have underway is automating the booking process. How do you see that going into the future as it relates to the travel agent?
Answer: Well a lot of people believe that as a result of what's happening with self booking tools travel agents are going to be eliminated. I don't happen to share that view, I think what's going to happen is more of the tasks relevant to entering and querying the system as to availability and choice is going to transfer down to the individual traveler and I think the travel agent as we know them today will become more of a help desk as people incur difficulties in dealing with a lot of disparate systems.
Moderator Question: Finally, as one of the largest travel companies in the world, what do you find as major challenges in implementing new technologies?
Answer: I would say it's management. It's staying focused on what needs to be accomplished because technology is moving at such an extraordinarily
rapid pace that we find ourselves moving sometimes right or left too much and not staying on the point or the direction that we've outlined over the past year or so.
Mr. Andrews started his presentation by complimenting the audience for their attention. Then he proceeded to share with the audience a brief snapshot of CSX experiences in terms of trying to manage the issue of time-based transportation or focused logistics.
Let me share with you quickly a snapshot summary of our evolution and then also share a quick insight into a couple of the products or systems we use today. Clearly as a transportation company with multi-modal global responsibilities, we've been tackling this issue, time based transportation or transportation based logistics from an internal sense. In 1995, our CEO made it very, very clear to us that we needed to be able to operate our business units or our intra-enterprise as one enterprise in the eyes of our customers. Taking on the challenge that many have already spoken about today in terms of the whole integration of the service delivery process or that supply chain process. Earlier this year, he approached us with the challenge that in order to really fulfill our mission and become a value added partner in the supply chain management or in the transportation management arena, we would have to extend our enterprise and actually began to develop the capabilities to evolve not only the intra-enterprise entities but also extend ourselves to be true partners in the whole management of the supply chain regardless of modality, corporate
identity and geography. So we've been working on that. In fact, one of the big promoters of that was John Clancy, who was here last night, he's been one of the drivers in that whole strategic process. We have three different initiatives going on to drive that process within CSX, the first not dissimilar to what was discussed yesterday in Panel II, is what we call CSX high performance orientation or organization. This process really takes on the imperatives of change management and business process re-engineering and we were doing that across the corporation. Simultaneous with that was a movement within CSX to really become very much market oriented, focused on the customers' requirements and to understand clearly how those requirements needed to build back into the business process re-engineering efforts. Again, much of what the commercial world was doing from a market standpoint related back to really Panel I, who was outlining strategy, the critical success factors and what capabilities needed to be applied to meet those critical success factors. Then finally, we had a small business or joint venture that was attempting to go out and market supply chain visibility. Unfortunately, at that time, what we found was a requirement but the market hadn't developed to the point yet where you could combine that and really gain the critical mass you needed to push this forward. As everyone's said to this point, to make this happen, it is a partnership not only in technology penetration and the acceptance of technology, but also the multiple constituents that have to play in the game to supply that data, the data acquisition, data sourcing and then provide those specific point to point applications or functionality. So lessons learned again, our customers wanted us to act like one unit, two we weren't acting like one unit inside our corporation we had functional silos, again not dissimilar to what already has been mentioned and then three there was a great demand for this notion of supply chain management but unfortunately there wasn't critical mass to be able to push that in the market. Again when I mention critical, that refers both to
technology in terms of its acceptance and its penetration and the partnership it takes with the communities of interests that provide a supply chain. As we all recognize , as has been indicated earlier it is that replication of the integrated view across multiple networks or supply chains that really starts to bring the kind of value that I know the military and commercial sectors are looking for. In the mid 1980's, we began a process of integrated services and in today's vernacular that would be supply chain management. How can we really begin to optimize our service capabilities to provide greater levels of customer service to our customers? We analyzed processes to determine how to drive cost out of the business. How do we really reduce the overall cost to support our customers? We began that process with the consolidation of all our customer service entities. Secondly, we moved into a true business priceless range to take those
paradigm of our internal operational systems and presented those to our customers on the internet or web type, job enabled set of capabilities, again we'll demonstrate that in a moment. This year our primary focus has been to begin the business to business integration of those capabilities and it began to take the manual intervention out of the process, the supply and demand, the production cycle those things and begin to do that electronically and move on ourselves and our customers hopefully to an exception based management situation. So rather than managing the whole, they are managing the exceptions with the system capability that allows them to do that. Finally, where we find ourselves today is really looking at a business that has traditionally been a bulk oriented business, being driven to be much more of a consumer oriented business, much more time determinate, being much more flexible with different products
Again, integration ... what we're all talking about as the true value of any of these supply chains is the information fidelity-the ability to look across the entire integrated process and to not have any holes in that data or information.
consolidated entities and to start revitalizing different business practices. So again, trying or attempting to reduce costs, make ourselves more efficient, but also now to focus on more effectiveness. Finally, and thirdly about a year and a half ago we started to take some of the enabling technologies we had developed in that effectiveness phase, voice response, EDI, what we called a customer service workstation and start to extend ourselves out to our customers and give them reach into our systems. And we're going to show you a brief glimpse of that system in a moment, it's called TWSNET Basic, but what we were trying to do is give our customers, just like many other folks today have explained , the visibility into the supply chain regardless of who you are and where you a re. About a year and a half ago, we reversed the
and services which drives our enabling technology to the levels that we've been talking about today-the GTNs, the JTAVs, the GCSS. Those are the same kinds of capabilities that we ' re working on to reproduce in the commercial sector. The final issue that we're always aware of is disintermediation and making sure that from a transportation entity standpoint, that we are not placed as a commodity. Three years ago, we embarked on a strategy that said, number one to be value added, to be a re-intermediary rather than a disintermediary we would have to begin to build the information services to surround our asset capability to get us to be robust enough to flaunt that kind of competitive advantage. All this is history, the evolution of where we had been, clearly mirrors the kinds of capabilities and
the generations of capabilities that we've been talking about here at the Forum. Overall. the value proposition for supply chain management, again, not to be too repetitive, has to be a value proposition that not only appeals to those who are very tactical in nature, we talked about tracking and tracing a great deal today. It is highly important to incorporate the radio frequency identification capability, some of the other AIT technology capabilities, but again, that's attacking one portion of the overall benefit that you can gain from this kind of push. In the last couple of days, you've seen and understand those benefits, so we've evoked, just like everyone else is evoking, a true integrated process that leverages the full capabilities of all of the legacy, the data access enabling technologies and are presenting that data back to the organization in a view that again, has to be functionally beneficial to all levels. Again, integration what we're all talking about as the true value of any of these supply chains is the information fidelity-the ability to look across the entire integrated process and to not have any holes in that data or information Once you develop those holes in that information, then the value of the overall approach starts to diminish The complexity of doing this of course is significant because as we all know, in every example that has been discussed today and in our example as well, we have multiple circles that have to be enabled by great technology to support these business practices that everyone is talking about and needs. Is it worth it? Yes, everyone understands that. Will the benefits be there? Yes, but again it's very much a cooperative effort. It's very much a partnership from the data quality standpoint to overall being able to manage. Everybody has learned by now or is learning just like we did, that those functional stovepipes or those vertical applications were designed with a purpose in mind and unfortunately that purpose wasn't supply chain management. We've had many pretenders market themselves as that, many of us, myself included have tried to develop those vertical systems in supply chain management, but again
we've come back to the same solutions set, the same architecture that all the respective speakers who have preceded me have come back to and that is, you've got another set of system capability that extracts the value from those legacy systems, enables with some new technology, and then has to bring that together in point to point solutions that are beneficial for again, all the constituency that relies on that key information. So that's been a lesson learned. Our system TWSNET, is a product that about a year and a half ago we started providing to our customers free of charge. In addition to that, we decided to provide the core engine of this product to our industry, the railroad industry. Because we look at ourselves from an industry standpoint, we know that 40% of our traffic interchanges with other railroads and that we have to be unified similar to the supply chain problem we're all trying to solve in order to keep trucks from taking our business. (He then proceeded with a live demonstration of the TWSNET.)
Questions & Answers
Q:As I understand the current AIT CONOPS, they call for integrated use of land lines and these will probably not be support in the commercial market. Why not go directly to satellite connectivity?
Wakefield
A:When you look at communications today in the way we're looking at it in our business area, is that you want to go to the cheapest communication and in a lot of cases, land lines are about the cheapest communication. So if you can use land lines, use land lines. If it's cheaper to go satellite, go satellite. But the capability of the devices that are being brought out of laboratories today, and some are already in the marketplace in the tracking of vehicles, particularly the American mobile satellite companies that have come up with satellite capability and is tracking the cab of the tractor, if it's most economical to use that device
system. If it's out of sync with and it's cheaper to feed the satellite, it goes to the satellite. So I don't think that you would want to discard any communication medium, you want to use the cheapest and most economical and when you start looking at the different combinations, you've got to be able to be flexible in my judgment.
Q:How vulnerable is the technology to the electronic magnetic pulse threat?
Wakefield
A:Anything electronic is going to be wiped out by EMP and it's not worth hardening.
That's a good question, but to this type of question I'd have to say, well I really don't know what the electronic magnetic pulse threat. What scenario is it going to be used in? And three, what is the source of the electronic magnetic pulse threat? It is this old argument that you hear all the time, we need assured communications is what we said, and I'm talking to DoD. Now forget about trying to do it all on DoD communications , we're going to use commercial communications. Then somebody comes up with, what's the threat? Well if it's a big enough threat, you take out the threat. If it's a little threat, it ain't no big deal, so tell me the scenario.
Q: Does the purple OSS capability to which you alluded have the visibility of our DFAS friends? In other words, how does the Army supply unit get reimbursed for issues to an Air Force unit?
Johnson
A : First of all OSS is referring to the J-\.Army's objective supply system which is a mechanism that looks across the Army to redistribute assets. What we've done in that area is to work with the services to develop a set of business rules. Those business rules dealt with access usage and reimbersement. They were then translated into systems changes at both the retail, wholesale, supply and financial levels. So the answer is yes, DFAS is playing, the capability is in place today but on a very
limited scale. It's a very challenging initiative to put it mildly, working with each of the services to first come to agreement on the business rules that dealt with asset usage and how much you would reimburse and how far will you allow the service to look into your asset balance and those sort of things. But today, in a limited number of sites we already have within JTAV the capability to receive and requisition that result in a back order and have that system generate a transaction that looks across the department for excess assets. That asset is shipped to the customer, accounts receivable and accounts payable is set up, the bills are paid, the assets shipped-but it's all invisible to the customer. So that's a long way of saying yes, our DFAS friends are engaged, and that capability that's referred to as OSS is in operation today.
Q:The last couple of questions here are on GTN and I'll do my best to address them. The first has to do with data quality. The question is, GTN is described as a data warehouse, the effective use of GTN is dependent upon timely data. What is being done to ensure that the data imported into GTN meets these criteria, an audit criteria?
Martling
A:There'stwo things we do. Number one, all the information that comes to the GTN from the external systems is controlled by an interface requirements document and that's in place. Secondly we have created in support of GTN a whole set of what we call system manager applications that monitor the input and essentially evaluate its quality and provides information and what the results are of that evaluation. We put that in as part of the operating system initially. We made some significant improvements to it and we believe that will significantly help us isolate, identify and take actions to correct the data quality problems. Thirdly, the number of people who actually monitor, we're increasing the staff. Basically, TRANSCOM has put more funding into providing more support for what we call function data map management that will evaluate and
take that to the table. But I think the real correction for data quality is send it back to the source.
Statement: Second question had to do with security on GTN. Well I don ' t care to address this particularly in this form, certainly if anybody in the audience has a need to know what the security posture of GTN is I'd be glad to put them in contact with the right person. I'm not a security expert. But I will say that GTN has received very high marks for security.
Q :How do JTAV and GTN interact?
Martling
A:Well
JTAV and GTN do interact . We provide GTN and ITV data to JTAV on a regular basis. We activated that feed roughly about 45-60 days ago, it's updated on a near real time basis. Every 20 minutes or so we pulse data into JTAV to get some updated look at the ITV information that's available in GTN and we're evaluating and working with TRANSCOM to see whether there are more effective ways to make that data transfer in the future.
Q: My question is this. Please discuss the enabling technologies that you use to manage your operations, information management, and data analysis and how these would be beneficial to achieving the Focused Logistics objective?
Bauer
A:So there's really two questions there, and I think the answer to the first one is you have to understand a little bit about the SABRE Group and what we're doing. First of all, we build systems from scratch according to user requirements and we're not limited to any technology in that area. Our primary focus has been in the aviation sector, and in our organization, we have individuals that are essentially leaders in their particular areas and we've developed a product line that we consider to be a product based upon best practices that are emplo y ed based upon the leadership in the industry. What we do is we go into organizations and
identify their needs and custom build products for those needs or educate them on better business processes to use a product we've already got Our products range from the operations area, how to load airplanes and staff operations environments. We've got models built where we literally have the world's transportation statistics available. We do traffic forecasts, schedule analysis, fleet plans, and optimization studies for airlines so we can show significant improvements for particular companies. We have systems to show them how to price their product , distribute their product and how it's used by travel agents . We also provide information direct to consumers through the internet One of the challenges that we're looking at is how to make the whole business of airline information easier for consumers to understand on the internet. Because my view is that the way it is right now it's too complex for us to understand, much less the public.
Q:What is DISA doing to keep the DIIOEC within at least 12 months of emerging technology? For example job description, web routing, etc. There is another question, with computer technology improving every 6-8 months, I assume they mean hardware and software improving every 12 months. How do you keep pace with the technology? So I would sort of equate them-Now the thing I'm going to link to the tail end of this is the relationship between this process re-engineering and what you're doing on infrastructure.
Leary
A:Solet me try to go through these, if I had the perfect answer I'd go work for Bill Gates and wouldn't be here or anything like that, you know I'd be rich and all that stuff. But on the other hand there's some basic things that are happening in the indust r y We spent a day with Hewlett Packard on Monday and started to see some of the things that are happening. They are fully recognizing the necessity of inserting hardware technology and operating systems w i th minimum disruption for marketplace. What does it mean
for us? We should be able to, in most cases, take off the shelf servers or clients and plug them in, you already do that with windows based platforms , most of you here are familiar with that, well, the servers are getting the same way. What is a little bit different for us in the larger systems or in the servers arena is that the manufacturers can no longer afford to do this.
It's really being done by a coalition of companies for a broader array of use particularly in the UNIX market. Where am I going with that statement? You need to have some coherence of, get some consistency of standards as you release the boxes in the main core of operating system software and systems software. I would equate that to the COE generally. And there's a few special case tests that the CME has to pass on the way the engineering's done but basically the COE was built to deal with the problems of chaos in the UNIX environment, so you put some standards in place. If you have standards at that level then it is a Jot easier to insert and evolve your hardware systems base. Where is your problem, your problem's going to be in your application area . These companies do not want to change operating systems, I'm sure all you guys are nodding at this, not what manufacturers are coming after, new releases of the operating systems when it means a major change to their applications. When we first started doing business process re-engineering we thought, okay we do it one time, we put a new system in place and we're all set. Of course you don't get it for five years and then it's out of date, so I think everybody now recognizes you have to evolve your information infrastructure as the critical enabler for you to be able to cross exchange and to figure out and work hard at setting the right steps in place to control the amount of issues that come up. There are so many variables to this , are people worrying about it, are people attacking it? Yes, very much.
Summarized by LTG Edward Honor, USA (Ret.)
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LMSRs Highlight Flexibility and Growth at the Port of Beautnont
The operation began on a sweltering morning last summer, when the Navy's newest cargo ship slipped into her berth at the Port of Beaumont, TX, to take on more than 800 pieces of military equipment bound for Bosnia.
The sheer size of the USNS Yano would overwhelm many ports-at more than 906 feet long and 105 feet wide, the Yano has cargo stowage capacity the size of six football fields . In fact, she was one of the largest vessels ever to visit Beaumont.
The two-day deployment, in support of Operation Joint Guard in Bosnia, marked one of the first times the Army has loaded cargo aboard one of the Navy's new Large, Medium Speed Roll-on/Roll-off ships known as LMSRs.
The loading of the Yano was coordinated by MTMC's 1314 Medium Port Command, which has since been redesignated the 834th US Army Transportation Battalion, based at the Port of Beaumont. The Yano and her sister ship, the USNS Gilliland, which called at Beaumont a few weeks later, are at the leading edge of a program to significantly expand tqe nation's sealift capability in the 1990's and beyond. Both f9rmer commercial container ships, they are two of 19 LMSRs that will be converted or built from the keels up at US shipyards by the year 2001.
Ships like the Yano and Gilliland will figure prominently in the future of the Military Traffic Management Command (MTMC) and the Port of Beaumont. As single port manager for the Department of Defense (DoD), MTMC supports the Army Strategic Mobility Plan (ASMP) that defines the requirements of strategic port facilities and throughput. The
ASMP determined that a Gulf port must be capable of simultaneously handling three ships of the size and configuration of the Yano or Gilliland.
Recently completed and projected improvements at Beaumont make the southeast Texas port an ideal partner with MTMC to accomplish its mission in support of providing terminal services for Department of Defense sponsored cargo.
In 1996, the port completed the last of $20 million in capital expansion that was authorized by voters in 1991. That program included a $12.7 million wharf extension project that provided an additional berth for military and commercial ships, expansion of rail facilities, construction of a new transit shed, and acquisition of 15 acres of waterfront property. In 1997, voters approved by a 2-to-1 margin a $27 million bond issue that will further modernize and expand the port's facilities. At the top of the list of projects is $11 million for a new 800-foot expansion of Harbor Island Marine Terminal, the port's premier general cargo wharf.
The relationship between the military and the Port of Beaumont actually predates the origins of MTMC. In the early 1950's, during the Korean War, the port was first designated to handle military cargo by being declared a "wartime port" under the New Orleans Port of Embarkation. During the Vietnam era, the Secretary of Defense ordered the Army to use commercial ports as much as possible for military shipments. Beaumont's proximity to defense installations in the south and its competitive operating cost resulted in more
An M916 truck, pulling a lowboy trailer and D-7 dozer, is discharged on the stern ramp of the USNS Gilliland at the Port of Beaumont.
The USNS Yano loads cargo for Bosnia at harbor Island Marine Terminal at the Port of Beaumont.
than one million measurement tons of cargo per year through the 1960's and early ?O's.
After that, the biggest military deployments were big logistics exercises that were shipped out of the military's own terminals. In 1977 a test was ordered to see if a commercial port could be used for the annual REFORGER (REturn the FORces to GERmany) exercise, which involved staging and loading several shiploads of military equipment in support of NATO training in Europe. Beaumont was chosen as the first non-government terminal to handle REFORGER, and it was used for every REFORGER thereafter.
During the years of the Cold War, when the Department of Defense followed a forward-deployed strategy, military cargo at the Port of Beaumont consisted mostly of training exercises and deployment of new equipment such as Bradley Fighting Vehicles and Apache helicopters to US bases worldwide. Those activities provided valuable training for actual mobilizations that were to come in the late 1980's, first with deployment of a shipload of equipment to protect US citizens and equipment in Panama, and a few months later, with fighting in the Persian Gulf. Collectively, Operations Desert Storm, Desert Shield and Desert Sortie resulted in almost 213,000 net tons of military cargo for the Port of Beaumont, carried by 52 ships over a 21-month period.
The Gulf War effectively foreshadowed the current DoD strategy of "Force Projection," in which forces are stationed in the US and are capable of deploying anywhere in the world as needed. This strategy shifts the emphasis from having forces deployed where they might be required to having the logistics systems in place to quickly send forces to trouble spots as needed. It places emphasis on fast, efficient and reliable transportation that can be called on at very short notice. This is where the Port of Beaumont has proven itself.
Beaumont is geographically located close to major warfighting units, with excellent rail and highway service in between. The city is the hub of major East-West and NorthSouth railroads and highways. In addition, there are good rail
and highway connections to the terminal. The railroads offer direct service to the port, which provides rail switching direct to wharves and allows assembly and receipt of unit trains. There are Trailer on Flat Car/Container on Flat Car (TOFC/COFC) ramps inside the terminal, and the port has a number of portable ramps which allow loading and unloading of single and multi-level railcars.
Port facilities include more than 6,000 linear feet of harbor front with eight ship berths affording wide concrete aprons and constant water depth of 34 to 40 feet alongside.
There are open berths offering more than eight acres and wharves flanked by transit sheds that offer more than 550,000 square feet of modern, fireproof cargo space.
An additional 36 acres of hard-surfaced open storage adjacent to waterfront property are available for cargo that does not require protection from weather, and there are another 50 acres of unimproved land inside the terminal. There is also plenty of port-owned, secure overflow storage area located immediately outside of the terminal, which has been used recently for receipt of convoys and training by reserve personnel.
The 834th Transportation battalion maintains offices inside the terminal. Relocated to Beaumont in 1994 and redesignated to its present status in October, 1997, the 834th is due for another significant change in mid-1998. At that time, the unit will become the 596th Transportation Group, giving it command and control over a larger area than the present Western Area, MTMC. Under the new designation, the group will be responsible for MTMC operations for the entire US West Coast including Alaska, the entire Gulf Coast and MTMC units in South and Central America.
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The NDTA Forum Photo Album
Sponsored by
U·S AIRWAYS
US Airways is a proud supporter of the NDTA and its annual Forums. Therefore, it gives us great pleasure to sponsor this special photo section covering the events and activities of the 52nd NDTA Transportation and Logistics Forum and Exposition.
Forum Acknowledgements
NDTA wishes to recognize and extend its sincere appreciation to the following companies for their contribution to the 52nd Annual Forum.
A-.15 ActMtlss
Burlington Air Express
Greater Columbus C&VB
Bus Shuttle Servioe
Alexander & Baldwin Foundation-Matson
Chairman's Awards Dinner
Air Transport Assoclatien of America
American Express
Boeing Defense & Space Group
Crowley Maritime Corporation
Emery Worldwide, a CNF Company
International longshoremen's Assn.,
AFl/CIO
US Airways
Coffee Breaks
Boeing Defense & Space Group
Continental Breakfast-Sunday
American Airlines
NDTA
Exhibits Revisited Luncheon
ABF Freight System, Inc.
Emery Worldwide, A CNF Company
Omega World Travel
Port of Beaumont
Exhibitor's Continental Breakfast
Mayflower Transit
United Van lines
NDTA
Forum and Exposition Entertainment
US Airways
Forum Newspaper SatoTravel
Golf Toumament
Northwest Alrllnes
MUitary Units Awards Luncheon
Greater Columbus C&VB
TF Boyle TransPortation
Name Badges
Lockheed Martin C2 Integration Systems
NDTA Scholarship Event: "Reunion"
Carlson Wagonlit Travel
Delta Air Lines
Holday Hospitality
FedEx
TRISM, Inc. companies:
Tri-State Motor Transit
Dlablo Transporiation
TRl6M Spectaffzed Carriers
NDTA Scholarship Event:
"San Francisco Bay Cruise"
APL Limited
Dollar Rent A Car Systems
United Airlines
United Parcel Service
PreslclBnt's Reception
Greater Columbus C&VB
Port of Oakland
US Airways-Music
Printing and Publications
American Airlines
Greatllt' Columbus C&VB
National Air Cargo
Pony Express
SatoTravel
TransWorld Airlines
United Parcel Service
US Airways
Recottnitlon BreakffJst
Ullited Airlines
NDTA
Registration Tote Bags
Landstar System
Souvenir Portfolio
Alamo Rent A Car
Trans World Alrlines
Start-Up Breakfast
SatoTravel
Transportation
Dollar Rent A Car Systems
Emery Worldwide, A CNF Company
UnitedAirffnes
START·IIP BREAKFASl HOSTED BY
Transportation/Logistics Management
Employment Referrals
Proven supervisory and leadership experience in military transportation operations, traffic management, safety, training/team building, quality control/assurance, inventory and accident investigations. Dedicated and adaptable with broad experience in planning, implementing and managing programs. Excellent verbal and written communication skills. Trained in air deployment and load planning. Results and people oriented with a strong background in personnel management. Seeking challenging position within a progressive, quality focused company. Computer literate. Assignment location flexible. #97-148
Transportation and Logistics Management
Dedicated results-oriented performer with 20 years of demonstrated success in leadership, decision-making, and problem solving at all levels of management. Hands-on experience in management of multi-modal transportation and traffic management operations in the US and overseas. Comprehensive skills in customer service, resource management, personnel administration, information management, maintenance, and training. Proficient in a variety of computer operating systems and applications. Previously worked as senior executive and operations officer for military organization that managed all common user land transportation for an overseas area of operation. Successfully developed and executed plans that were instrumental in substantial cost savings and significant improvements in customer service and efficiency. Assignment location flexible including overseas. #97-149
Loglstlcs/Reenglneering/Contracts Management
Energetic, hands-on individual with over twenty years operational and strategic planning experience at mid to senior levels in the Army. Led organizations up to 1,000 people providing full-range of integrated logistics support. Stored, inventoried, and distributed 300,000 tons of material during Gulf War. Reengineered over 100 functional processes of organization serving 65,000 customers-significant use of IT. West Point undergraduate, two MS degrees, one in contracting. Skilled in Microsoft Suite/Word Perfect. #97-150
Transportation/Logistics Management
Over thirty years experience as a logistics operator, manager, and advisor. Background includes in-depth knowledge of transportation mode operations, strategic force deployment, performer with consistent record of transportation and logistics operational success irrespective of the complexity. Experienced in the development and execution of logistics programs and doctrine including training and joint operations. Water terminal and contract supervision experience. #97-151
Transportation/Logistics Management
If you're looking for someone to work and produce positive results, then hire me. Twenty years of extensive logistics/transportation experience in the areas of traffic management, mobility, functional analysis, and vehicle operations, and administration. Solid background in management with excellent interpersonal, communication and liaison skills. Understand and enjoy the challenge of helping to build an organization utilizing practical growth plans and new ideas team player. BS in Aviation Management. #97-152
Mail or fax this form to NDTA to request exhibit, advertising and sponsorship information for the MTMC I Symposium in Denver, CO (March 3 - 4, 1998); the Navy Symposium in Norfolk (June 2 - 3, 1998) or NDTA's 53rd Annual Transportation and Logistics Forum and Exposition in Houston, TX (Oct. 24 - 28, 1998). I
send me the
Denny Edwards Director of Marketing
National Defense Transportation Association 50 South Pickett St., Suite 220 Alexandria, VA 22304-7296
FAX: (703) 823-8761
QUESTIONS? (703) 751-5011
MSC
USNS Yano, named for SFC Rodney J.T. Yano, USA a posthumous recipient of the Medal of Honor for his heroic actions in Viet-
nam, is at the leading edge of a program to significantly expand the Nation's sealift capability. The ship is one of 19 Large, Medium-Speed Roll-on, Roll-off ships called LMSRs that will be built or converted at US Shipyards by the year 2001. USNS Yano, formerly a commercial container ship, underwent nearly three years of conversion to make it ideal for the transport of US military combat and combat support equipment needed overseas in wartime. The ship is crewed by 26 merchant mariners under contract to the US Navy's Military Sealift Command.
MSC, the US government's ocean transportation provider and Navy's at-sea resupplier, has several ships which operate regularly out of Guam. They recently faced a downsizing dilemma-the closing of the Navy's ship repair facility in Guam.
Three NDTA'ers Selected for New Positions
LTG Roger G. Thompson, Jr. was recently appointed Deputy Commanderin-Chief of the US Transportation Command He succeeds LTG Hubert G. Smith who has retired to his home in Tennessee. Thompson comes to USTRANSCOM from the Pentagon, where he served as director of the Army budget in the office of the assistant secretary of the Army for financial management. "I intend to focus on the mission," Thompson said, "with emphasis upon and support for the people accomplishing the mission. Motivated and well-supported people are the reason for any command's success." Thompson earned his commission through the US Military Academy at West Point, NY Since then, he has completed a master's degree in comptrollership from Syracuse University and one in national security and strategic studies from the US Naval War College.
~c,fTR~ 1:-...,_¾ Pw;Jdent CHnton ,ecently nommated LTG f ~. \ Kenneth R. Wykle, USA (Ret.) to the \ ~,()" nation's top roadway management post"osr,,.rEsr;J,~~ administrator of the Federal Highway Administration. Wykle, currently Vice President for defense transportation at Science Applications International Corp., served in the Army for 32 years, including a tour in
CinCPACFLT realized there was still a need for a ship repair facility with full dry-dock and overhaul capabilities in the Western Pacific. In spring 1997, the Guam Economic Development Authority solicited commercial bids to privatize and run the former Navy Ship Repair Facility in Apra Harbor. Xeno Technix, Inc., a Bensalem, PA engineering firm which runs two other small ship repair facilities in Norfolk, VA and San Diego, CA, won the competition Guam Shipyard Division, as it is now called, is now operational. MSC is in the planning stages of issuing contracts for work for the new facility. Two of its ships-USNS San Jose and USNS Niagara Falls-are scheduled for November and December 1997 repairs at the new yard.
MTMC
BThe 1314 Medium Port Command was ->::- nation. The Beaumont-based unit will be known as the 834th US Army Transportation Battalion. The action is a result of an initiative to make Military Traffic Management Command organizations more recognizable as regular US Army units . The previous four-digit unit designations are being changed to three digits and the major and minor port commands renamed as groups, battalions and companies.
f recently given a new nmne and numerical des;g-
Vietnam and a post as Deputy Commander-in-Chief for the US Transportation Command at Scott Air Force Base. Wykle received an undergraduate degree from West Virginia University and his masters in psychology from Ball State University. In a written statement to the press, Secretary of Transportation Rodney Slater said Wykle's record of leadership makes him ideal for the highway post. "Wykle is the right person to lead the FHWA," Slater wrote. "The track record he set during a distinguished 32-year Army career shows that he is well-positioned to ensure that our highway system becomes even safer and more efficient."
COL (P) William E. Mortensen is the new commander of the Military Traffic Management Command, Eastern Area. He replaces BG Gilbert S. Harper, who is now at Fort Eustis, VA where he serves as the commander of the US Army Transportation center and School. Mortensen comes to MTMCEA after duty in Washington, DC as executive officer to the commanding general of the US Army Materiel Command. He has served in a variety of command and staff assignments throughout the US and Germany. MTMCEA is an Army command jointly staffed by Army, Air Force and Navy personnel and a large civilian work force. The command manages and controls movement of Department of Defense shipments in the 28 eastern states and Central and South America. In January, the Department of the Army announced that the home of the new MTMC Continental United States command would be Fort Eustis, VA. The new command will combine the missions and functions of the MTMC Eastern and Western Area headquarters, located in Bayonne, NJ, and Oakland, CA, respectively.
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Peona (309) 633-0331
Ind,anapolrs (317) 241-0611
KENTUCKY
Lexington (606) 255-8886
MICHIGAN
Detro,/ (313) 965-7420
Columbus (614) 475-1739
PENNSYLVANIA
Pittsburgh (412) 928-8783
SOUTH CAROLINA
Columbia (803) 695-7000
M empl,is (901) 458-1988
Nashville (615) 399-7040
VIRGINIA
Roanoke (540) 563-2619
r News
SCOTT-ST. LOUIS CHAPTER
The Scott-St. Louis Chapter A-35 group recently sponsored its second annual AMTRAK trip to historic Washington, MO. The train travel afforded participants the opportunity to socialize while enjoying the emerging fall colors along the Missouri river. Breakfast was served in a converted mansion before the group took to the streets to enjoy the state Marching Band Competition, local shops and the upbeat atmosphere of the city.
PIKES PEAK CHAPTER
Chapter members recently gathered for a luncheon meeting at the Colorado Springs Airport. The speaker was Mr. Gary Green, the Director of Aviation for the City of Colorado Springs. Mr. Green discussed the $150 million airport expansion and development that has provided a new terminal building and runway-the longest in the state. These capital improvements were finished on time and under budget and have allowed emplanements to triple in the past two years.
PHILADELPHIA CHAPTER
Boeing Philadelphia's Ridley Park, PA facility recently hosted a briefing and tour for the chapter and several guests. Jerome McMullan, Manager, CH-47 Business Development, presented a briefing and video on the aircraft of the Boeing-McDonnell Douglas merger. Featured was the Chinook helicopter and Improved Cargo Helicopter capability that will extend the Chinook's service life. A guided tour of the facility followed the briefing.
REGIMENTAL CHAPTER
The Regimental Chapter was recently joined by LTG Edward Honor, USA (Ret.) for a luncheon meeting and the induction of new officers: LTC Donna Simkins, President; Josh Davis, First Vice President; MAJ Bruce Ferri, Secretary; CPT Kam Gunther, A-35 Chair; and MAJ Lynn Connors, Public Affairs. Highlighting another recent luncheon meeting, LTG Hubert G. Smith spoke about the partnership between USTRANSCOM and the national committees of the NDTA as well as on his 35 year Army career.
HOUSTON CHAPTER
The chapter assembled at the Travelodge Hotel to hear guest speaker, Michael Orrson of Pan Air, an all cargo air carrier. Mr. Orrson spoke on how airfreight transportation has evolved over the past ten years and what predictions might be for the future of freight growth and the air carriers. His presentation included interesting facts and instances of specialized cargo aircraft such as the Russian Antonov 124.
SAN JoAQUIN VALLEY CHAPTER
The chapter got a real boost toward establishing a scholarship fund when Green Valley Transportation in Vernalis held an open house on October 18th to benefit the fund. More than 200 people attended the dinner and dancing fete held at the Green Valley facility. $800 was raised for the scholarship fund. With this seed money the Chapter will continue collecting funds and offer at least one scholarship to a student pursuing a college degree in transportation management. The scholarship will be offered in Fall 1998.
RICHMOND CHAPTER
The Richmond Chapter recently held a luncheon meeting with guest speaker Mr. Robert Martinez, Secretary of Transportation for the Commonwealth of Virginia. Mr Martinez talked about the ICETEA Project initiated involving transportation cost and taxes and reimbursements.
WASHINGTON DC CHAPTER
The Washington DC Chapter recently recognized several members for awards they received at the 52nd NDTA Transportation and Logistics Forum & Exposition: Ms Diana Roach, A-35 Chapter of the Year "Category III," Mr. Ron Conardy, NDTA Distinguished Service Award, Mr. Anthony Brian Assia, International Junior Executive Leadership Award, Mr. Marvin McFeathers, Membership Award "Category III" and COL Stephen Christian, USA (Ret.), NDTA Distinguished Service Award.
ALOHA CHAPTER
The Aloha Chapter held its annual golf tournament recently at the Hickam AFB Mamala Bay golf course Sixty-four golfers participated this year and generated $1,300 for the scholarship fund . Thanks to CPT Tom Ellis, the many other volunteers and all the corporate sponsors that made the tournament possible. Also, the monthly membership meeting was held recently at the USS Bowfin Submarine Museum and Park. Members were able to tour the USS Bowfin, a WWII era submarine moored at Pearl Harbor, and the submarine museum, which traces submarine warfare from its inception to the present.
NEW ENGLAND CHAPTER
The recent luncheon meeting of the New England Chapter included an interesting presentation of intermodal operations by Mr. Robert V. Williams, Chairman and CEO, International Intermodal Systems, followed by a tour of the Worcester terminal and yards of Intransit Container, Inc., conducted by Mr. Stephen W. Cotrone, VP, Operations. After an industry briefing by Mr. Williams , Mr. Cotrone described dispatch, routing , customs and financial operations necessary for the successful operation of the "virtual" Port of Worcester.
Advance Registration Form
Name _______
City/ State/ ZIP
Name tag Preference ____________
Spouse Name tag Preference
Amount Enclosed
Make check payable to NDTA European Conference
31st European Transportation Conference
National Defense Transportation Association
April 25 - 29, 1998
Novotel Rotterdam, The Netherlands Registration Fee Registration fee Before March 1" After March 1" Member Dfl. 370.- Member Dfl. 400Spouse Dfl. 320 - Spouse Dfl. 350No refund after 1O April 1998. Check or money must accompany this form for all registrations. Fees for single events are available on request. Return to: NDTA European Conference Attn : Mr S. Feikema Juweellaan 181, 2719 SB Zoetermeer, The Netherlands Telephone: (0)79 • 3616488 Fax: +31-(0)79-3616488
All registrations must be paid in full. Any refund granted will be subject to a Dfl. SO.administrative charge
"On reviewing NDTA 's plans for its Transportation and Logistics Forum and Exposition, the Assistant Secretary of Defense (Public Affa irs) finds this event meets the standards of participation by DoD personnel under DoD Instruction 5410 20 and DoD Standards of Conduct Directive 5500.7 This find ing does not constitute DoD endorsement of attendance , which must be determined by each DoD component. "
Hotel Room Registration Form
Name
Title
Organization
Address
City/ State / ZIP
Room Rates: Single Double Dfl.
31st European Transportation Conference
National Defense Transportation Association
April 25 - 29, 1998
Novotel Rotterdam, The Netherlands
Arrival Date _ Time ______
Departure Date _____ nme ______ Telephone
Important: Reservat ions made after Feb 15"' , 1998 will be subject to space availability only.
Send this form to : Novotel Rotterdam, K.P. van d9.r Mandelelaan 150, NL 3062 MB Rotterdam, The Netherlands, Telephone: (0)10 - 4530777 Telefax: +31(0)10 - 4531503
Advertising, Sponsorship and Exhibit Information
Advertising space will be available in the Conference Program at the following rates: Black/White Full Color Full Page Dfl. 1400.- Dfl. 3000.Half Page Dfl. 700.- Dfl. 1500Inside Front Cover Dfl. 1600.- Dfl. 3250.-
All advertising requests must be placed by 31 December 1997 Full payment is required before 1 March 1998 Please furnish exact text and transparency or photograph Information should be sent to Mr. P E Davidson ; Payment to Mr S Feikema
Please send donations for sponsorship of an event to Mr S Feikema. State the event you would like to sponsor. 20 booths are available at the price of Dfl. 2000.-. If you pay for an exhibit, you are entitled to a 20% discount on advertising in the Conference Program.
Any refund granted will be subject to a Dfl. 150.- administrative charge. -I ::a ,. z u, ,, 0 ::a -I ,. -I0 zz -I :c -I n ffl z -I C ::a -<
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-:icar Rental
Chrysler Corporation recently announced that its subsidiary, Dollar Thrifty Automotive Group Inc. (DTAG), formerly Pentastar Transportation Group, Inc., has filed with the United States Securities and Exchange Commission (SEC) a registration statement relating to the issuance and sale in an initial public offering of 22,500,000 shares of its common stock. DTAG owns Dollar Rent A Car Systems and Thrifty Rent-ACar System which operate separate daily vehicle rental businesses and also license independent franchisees to rent vehicles under their brands.
LANDSTAR
Gary w. Hartt~r was
recently appointed Senior Vice President of Sales and Marketing at Landstar System, a safety-first transportation services company. In his new position, Hartter, formerly President of Trism Specialized Carriers, Inc. and Executive Vice President of Trism, Inc., will be responsible for developing new business opportunities in general commodities, automotive, heavy and specialized, and government markets. "Gary's wealth of experience, his professional and personal involvement with customers and all facets of operating a motor carrier fit perfectly with Landstar's culture," said Landstar Chairman, President and CEO Jeff Crowe. "Over the years I've been able to observe Gary both as a competitor and as a member of various trade and industry associations. His personal dedication and detail-oriented approach to providing outstanding services are synonymous with Landstar's commitment to providing the safest, most reliable, customized transportation services available."
One of the most-recognized names in hospitality is getting a new look. Reflecting the company's shift to a brand management organizational structure, Holiday Inn Worldwidefranchiser of Holiday Inn, Crowne Plaza and Holiday Inn Express hotels and a unit of Bass PLChas renamed itself Holiday Hospitality. "For many travelers, the name Holiday Inn is almost synonymous with the word "hotel" and the brand certainly remains an important part of our business and our heritage, 11 said Chairman and CEO Thomas R. Oliver, "but our new name more accurately reflects th e diverse family of products under our corporate umbrella."
BDM announced recently that its team nnm working to strengthen the new DoD Defense Travel System (DTS) includes the originator of the most widely used travel management software in the fed-
eral government today, as well as the world's largest travel company. Gelco Information Network, Inc. and American Express Travel Services, are among eight companies teamed with systems integrator BDM pursuing the DTS contract
More than 800 pieces of military equipment bound for Bosnia were recently loaded aboard the Navy's newest cargo ship at the Port of Beaumont. The vehicles were loaded aboard the USNS Yano , a newly converted Military Sealift Command ship with cargo stowage capacity the size of six football fields. The deployment, in support to Operation Joint Guard in Bosnia, marked one of the first times the Army has loaded cargo aboard one of the Navy's new LMSRs.
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The Small Business Administration ato 11 ave (SBA) chose SatoTravel to receive its prestigious "Award of Distinction " The award recognizes federal contractors with exceptional small-business programs and is bestowed upon fewer than 2% of SBA's portfolio of large contractors. SatoTravel's subcontracting program for small, minority-owned and womanowned businesses has grown exponentially over the last five years. "We recognize that our program's success is the result of the strong partnership we've forged with our small travel agency partners, as well as the leadership and support for small business subcontracting demonstrated by our customers," said Mike Premo, President and CEO of SatoTravel.
~NORTHWEST
\..:.,/ A IRLINES
Northwest has completed training 1,500 people in a new luggage tracing system called WorldTracer. The airline recently replaced its current luggage management and tracing system in a systemwide cut-over. "WorldTracer will improve customer service," said John Coats, manager, central luggage service. "It will help Northwest find more luggage faster." WorldTracer is the airline industry's leading luggage management and tracing system.
EMER!:I Richard Brown was recently proWORLDWIDE moted to director of Emery Worldwide's Military and Government Dedicated Industry Group, which fulfills the transportation and logistics needs of governmental, civilian and military organizations worldwide. Brown, based in Washington, DC, reports directly to Douglas Foster, Emery Vice President, Sales and Marketing. According to Foster, Brown is now responsible for the development and management of Emery's global governmental, military and DoD business He previously served as business development manager for Emery's military sales based in Atlanta. He joined the company in 1995, serving since then with Emery's global logistics business unit as well as its governmental sales group. Prior to his Emery employment, Brown spent more than 28 years as a civilian employee managing DoD logistics operations in the US, Europe and Asia. In his last position with DoD, he managed a modern distribution center with more than three million square feet of warehouse space and 1,500 employees.
It's hard to believe that 1997's NDTA Forum is behind us already. Once again I think the A35ers contributed to a successful as well as entertaining Forum. For those of you who could not attend, please read on to learn more of the details.
On Saturday, September 27, we held a meeting/workshop at 9:00am for those A35ers who had arrived early. We touched on several topics and, of course, a large amount of time was spent on duck logistics, selling opportunities for Duck adoptions, as well as planning coverage of the registration desk and exhibit booth.
The Duck Race took place on Sunday morning at the City Center, and the weather could not have been more cooperative. On the other hand, a terraced fountain provided enough of a challenge that our ever-ready A35 barefooted volunteers had to jump in to help the web-footed participants complete the race.
Congratulations to all of the Duck Race prize winners:
• Grand Prize mini Bahamas vacation: Rick Coons
• Second Prize hotel and car rental package: James Teague
• Hotel weekend winners: Roger Skove, Karla Campbell.
• Car rental weekend winners: Bob Kukick, Bill Fannen
• Plush stuffed duck winners: Virginia Cox, Lynn Stratton, Dave Haas and Betty Slanta.
A35er Lucy Monko earned her way to an airline ticket by selling the most duck adoptions. Other sellers of note, winning stuffed plush ducks, were Sean Caulfield, Lisa Gregg, and Lynn Nelson.
The total amount of Scholarship funds raised this year came to $4,505.00. That does not include the sponsorship earnings donated to the race. That's $1,500.00 more than last year's inaugural race.
Our A35 Volunteers were outstanding, and many thanks go out to them for a successful Duck Race as well as for staffing the A35 booth. As in 1996, our booth was open and staffed during all of the exhibit hours. We had duck paraphernalia for sale as well as free literature. We received quite a bit of traffic and a lot of questions and interest in the A35 program.
We held our A35 Breakfast on Wednesday morning with a pretty good turnout considering the fact that it followed the hospitality evening. Our special guests included COL Jan Harpole; LTG Vince Russo, USA (Ret.); BG Chuck Edmiston, USA (Ret.); Gen. Duane Cassidy, USAF (Ret.); COL John Compisi, USA; Paul Merwin; Jeff Crowe; Ron Drucker; MG Jack Griffith,
USA (Ret.); COL Joe Torsani, USA (Ret.); LTG Ross Thompson, USA (Ret.); LTG Ed Honor, USA (Ret.); and Brig. Gen. Mal Hooker, USAF (Ret.). Mary Lou McHugh was our guest speaker.
Other topics discussed during the A35 Saturday workshop and reported at the Board of Directors included my monthly requests for readers to provide me with information on chapter activities and other local even ts for sharing through the Defense Transportation Journal. This led to a discussion on e-mail (the method by which I prefer to receive chapter updates) and Rick Coons volunteered to pursue the possibilities of an A35 home page. This could be a great way for your chapters to share information. Your comments would be appreciated.
Another issue I brought up concerned the lack of nominations for the A35 Award announced at last years' Forum (the first award was to be given away during this Forum). Its criteria have even been mentioned in the last several columns to refresh you. Its an award to be presented to an individual or organization within NDTA who has helped to advance the goals and the work of the A35 organization. Ideally, the nominations should come from the A35 group and recognize an NDTA member outside of the A35 group. Elected chapter, regional, or national officials shouldn't be nominated though, since supporting A35 is already part of the job description. Please start thinking about next year's award now. I know you have supporters and mentors that we should be recognizing and thanking.
Speaking of thanking, there are many people who supported our efforts at this year's Forum. I want to mention them: Lynn Nelson of Mercer Transportation, Craig Thurgood, President of the Salt Lake chapter, Marcia Scofield of Defense Transportation Journal, and Denny Edwards of the NDTA national office. Between these people, nothing was forgotten. Special thanks also go to the A35ers that staffed our booth-Lucille Monko, Rick Coons, and Jonathan Cox. All of these people mentioned also helped work the Duck Race, as did Nancy Gast Romps, who also reported the outcome for the Forum Newspaper; Lisa Gregg and Emily Delaney, sellers and race workers; Sean Caulfield, who called the race and came in second selling adoptions; and our special volunteers from the US Air Force-Brian O'Donnell, Tim Dorr and Spiro Moulis. These three guys acted as race guides, workers, haulers, etc., and managed to somehow be in place early. I hope I didn't leave anyone out.
There's more that I could share, but I'll save it for the next issue. Please note my new e-mail address: tgiordanengo@ups.com -and stay in touch!
Theresa Giordanengo Vice-President
A-35
OAKLAN ~arr,ott
CITY CTNTER
H
O n
O r RO 11 of Sustaining Members
These firms support the purposes and objectives of NDTA.
AAR Cadillac Manufacturing
ABF Freight System, Inc.
AMO-American Maritime Officers
APL Limited
ARINC, Inc.
AT&T Defense Markets
Air Transport Association of America
Alamo Rent A Car
Alaska Cargo Transport, Inc.
American Air Cargo
American Airlines
American Auto Carriers
American Bus Association
American Express Government Services
American International Airways, Inc.
American Overseas Morine Corp.
American Shipbuilding Assoc.
American Trans Air
Anchorage Hilton Hotel
Associated Air Freight, Inc.
Association of American Railroads
Atfas Von Lines International Automation Research Systems
BDM Federal, Inc.
BatteHe
The Boeing Co.
T.F. Boyle Transportation, Inc.
Bristol Associates
Burlington Air Express
COMSAT Mobile Communications
CONRAIL
CSX Transportation
Carlson Wagonlit Travel
Carnegie Group
Center for Global Logistics & Transportation
USMMA-Continuing Education
Central Delivery Service-Washington
Computer Data Systems, Inc.
Computer Sciences Corp.
Consolidated Freightways Corp.
Consolidated Sanity Services, Inc.
Consolidated Traffic Management Services, Inc.
Continental Airlines
Coopers & Lybrand
Crowley Maritime Corp.
OHL Airways
Dallas & Mavis Specialized Carriers
Delta Air Lines, Inc.
Deutsche Bahn AG (Germon Railroad)
Regional Patrons
American Management Systems
American Movers Conference
Anteon Corporation
Apollo Travel Services
Arven Freight Forwarding, Inc.
Avis Rent A Car
Bay Ship Management, Inc.
California Trucking Association
CSI Military Services
Century Technologies, Inc.
Dodge Moving & Storage Co.
Diablo Transportation
District No. 1 - PCD, MEBA
Dollar Rent A Car
Dynamics Research Corporation
EDS
Emery Worldwide
Enterprise Rent-A-Car
Evergreen International Airlines, Inc.
Farrell Lines, Inc.
FedEx
GE Aircraft Engines
GRC International, Inc.
Holiday Hospitality
Information Technology Solutions
lntemQlional Longshoremen's Association, AFL-CIO
International Organization of Masters, Motes and Pilots
Kuehne & Nagel, Inc.
Labor Management Maritime Comm.
Landstar System, Inc.
Lock'- Martin ~onautical Systems
Lockheed Martin C Integration Systems
Logistics Management Institute
Lykes Bros. Steamship Co., Inc.
MAR, Inc.
Maersk line Ltd.
Maritime Overseas Corp.
Matson Navigation Co.
Mayflower Transit
McDonnell Douglas Aerospoce
Mercer Tl'Of'lsportation Co.
NYP & Associates, Inc.
Notional Air Cargo, Inc.
National Air Carrier Association, Inc.
Notional Van Lines Inc.
North American Van lines
Northwest Airlines, Inc.
Official Airline Guides
Old Dominion Freight Line, Inc.
Overnite Transportation Co.
Federal Freight Systems, Inc. Garrett Container Systems
Geko Government Network
Hertz Corp.
I.M.P.A.C Card Services
Innovative logistics Techniques, Inc.
Interstate Van Lines
Kalyn/Siebert, Inc.
PRC, Inc.
Pilot Air Freight Corp.
Pony Express
Port Authority of N.Y. & NJ.
Port of Beaumont
Port of Corpus Christi Authority
Port of Oakland
QUALCOMM
Roberts Express, Inc.
Ryder Defence
SAIC
SRA International Corp.
Sandia Notional Laboratories
SatoTravel
Schneider Notional, Inc.
Sea Containers America, Inc.
Sea-Land Service, Inc.
Sealed Air Corp.
Southern Air Transport, Inc.
Southwest Airlines
Stanley Associates, Inc.
Stevedoring Services of America
Stewart & Stevenson
TRW Systems Integration Group
TTX Company
Totem Ocean Trailer Express, Inc.
Transportation ln,stitute
TronsSystems
Trans World Airlines
TRISM Inc.
TRISM Specializ:ecl Carriers
Tri-State Motor Transit Co.
USAirwoys
Union Pacific Railroad
UNISYS Corp.
United Airlines
United Parcel Service
United Technologies Corp.
United Von Lines, Inc.
Value Rent A Car
WORLDSPAN
Waterman Steamship Corp. (Central Gulf Lines)
WorldPort, LA
Morten Beyer & Agnew Munitions Carriers Conference National lnterrent
NO Information Systems, Inc.
North American CLS, Inc.
Oakwood Corporate Apartments
Omega World Trove! Patriot Systems
Savi Technology
Sea Box, Inc.
Super Eight Motels
Techmate International
Thrifty Car Rental
Trailer Bridge, Inc.
TriEnda Corporation
The Virginian Suites
World Trade Transport of Virginia, Inc.
APL Limited
Bristol Associates
CONRAIL
CSX 'Iransportation
Emery Worldwide a CNF Company
Evergreen International Airlines, Inc.
International Longshoremen's Association AFL-CIO
Landstar System, Inc.
Lockheed Martin C2 Integration Systems
National Air Cargo, Inc.
Sea-Land Service, Inc.
Southern Air Transport, Inc.
TRISM, Inc.
United Technologies Corp.
The above-named corporations are a distinctive group of Sustaining Member Patrons who, through a special annual contribution, have dedicated themselves to supporting an expansion of NDTA programs to benefit our members and defense transportation preparedness.
Bookshelf Ideas
Precipice by Daniel Pollock
published by the Council of Logistics Management, 2805 Butterfield Road, Suite 200, Oak Brook, IL 60523, 1997, $29.95 plus tax.
This book is the result of the Council of Logistics Management's decision to provide a project to increase the public awareness about the importance of the logistics profession. The Council's Research Strategies Committee recognized that works of fiction had done much to highlight the importance of other professional disciplines, notably medicine and law. They believed a CLM novel could do the same for logistics. After four years of work by many people, the development of Precipice was complete. When I received my copy for review accompanied by several very favorable reviews, I became a little skeptical.
Then I began my review. Precipice is about a Gulf War veteran who rescues her family's imperiled discount retailing chain after a saboteur injects crippling viruses into the company's computer system. I soon agreed with those who reported that it was a classic thriller that was hard to put down. I kept wanting to return to finish. It contains fast moving logistics challenges and hands-on solutions to straighten out the supply chain problems caused by the failure of the firm's computer system. This failure caused wrong purchasing deliveries and wrong deliveries from the firm's distribution centers to its stores resulting from the loss of inventory location and inventory errors.
The daughter was given ten days to solve these problems or the family business was to be sold to one of its competitors. The book contains the family members' intrigues and the pressures of the value of its stock falling as the problems hit the news. Also, the potential buyer was pressuring the family members to sell. With murder, conspiracy, love, computer system sabotage, decisions, inventory verification, transportation problems, financial crisis of suppliers, etc., much had to be accomplished in the allotted ten days. I believe that the book will go a long way to make the public aware of the importance of logistics to our economy.
However, I am not about to reveal the outcome of the novel. I recommend that all those interested in logistics read the book. Also, I highly recommend its reading by everyone who is interested in an exciting tale. The pace, tension and intrigue of the novel will hold your attention. And you will not be disappointed in the results or the surprise ending of the novel. The Council has surely accomplished what it set out to do with Precipice.
Dr. Joseph G. Mattingly, Jr.
United States Transportation Command: the National Defense Reserve Fleet and the Ready Reserve Force, A Chronology by James K. Matthews with Editors Margaret J. Nigra and Cora J. Holt, published by United States Transportation Command Research Center, 508 Scott Drive, Scott AFB, IL 62225-5357, September 1997, Copies available from the Center Director.
This 67 page Chronology traces historical events in the development and use of the National Defense Reserve Fleet (50 years) and of the Ready Reserve Force (20 years). It should be of interest to persons involved in force projection and logistical resupply of deployed forces.
GAO Transportation Reports prepared by the US General Accounting Office. The GAO publishes reports which are of specific interest to readers. We have listed several examples of some recent issues on transportation subjects:
GAO/RCED-97-51 Air Traffic Control-Status of FAA's Standard Terminal Automation Replacement System Project March 1997
GAO/RCED-97-68 Commercial Trucking-Safety Concerns About Mexican Trucks Remain Even as Inspection Activity Increases April 1997
GAO/RCED-97-99 Airport Development NeedsEstimating Future Costs April 1997
GAO/RCED-97-106 National Airspace System-Issues in Allocating Costs for Air Traffic Services to DoD and Other Users April 1997
GAO/RCED-97-137 Aviation Safety-FAA Has Begun Efforts to Make Data More Publicly Available April 1997
GAO/NSIAD-97-95 Terrorism and Drug TraffickingResponsibilities for Developing Explosives and Narcotics Detection Technologies April 1997
GAO/GGD-97-42 Drug Control-Observations on Elements of the Federal Drug Control Strategy March 1997
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Just call Sato]:avel, your 11-avel Agent or American Airl.mes at 1-800-433-7300 • • , or VlSlt our Internet add ress at caruur.comhttp:fwww.ameri • -and we'll keep you moving.
Moving people, not paper.
With worldwide experience in helping clients find more productive ways of working, the EDS team stands ready to support DoD in reengineering its entire travel process.
A great idea
Streamlining military trave l operations will make the process more efficient and easier, significantly reducing costs and improving quality of life for every traveler.
A better way
Travelers will be able to manage their own travel planning right from their de skt ops. With built-in authorization 1neasures, the Defense Travel System will also maintain the necessary levels of approval and security.
A move forward
The n ew Defense Travel System will simp lify ~dministration and provide a sing l e source of tim e ly, accurate travel management information DoD-wide.
A complex challenge
Implementing large-scale, enterpr ise-wid e change is no simp le task. Every day, we help clients with global systems and operations successfu lly meet complex challenges like this one.
A proven record
With b road experience in the travel industry, systems integration, global systems deployment and global emergency mobilizations, the EDS team has the proven expertise and low-risk approach to support travel process reengineering.
A continuing commitment
The EDS team is absolutely committed to helping DoD cut costs, improve efficiency, and realiz e the defense travel vision. To learn more, call David Hadsell at (703} 742-1363, emai l at david.hadsell@ e ds .com or visit www eds-gov com
