Working on the Chain

With profits down and perils up, companies are focusing on supply-chain management.

Whenever there’s serious trouble abroad involving U.S. interests, count on the United States Marine Corps to show up in a hurry. Such around-the-clock, global readiness depends on an effective supply chain, and in a world where the source and nature of trouble are increasingly unpredictable, the supply chain has to be flexible, fast, and supremely responsive. But until recently, those qualities were in short supply, as seen during the Marines’ last major logistics effort before Afghanistan, the Persian Gulf War of 1990­91.

“It took us some time to get prepared until we were comfortable kicking off a ground assault,” recalls Lt. Gen. Gary S. McKissock, the Marines’ deputy commandant for installation and logistics since 1999. “Everybody was relatively happy with our performance, and a lot of folks gave special kudos to the logistics community. But it was obvious we could have done a lot better.”

During the Gulf War, the Marines still relied on the time-honored strategy of moving an overwhelming amount of materiel close to the battlefield — “Whoever gets the most stuff on the beach wins,” as McKissock puts it. To support this “Iron Mountain” of supplies, the Marines maintained a 60-day level of inventories. But while that approach still sufficed for set-piece battles such as Desert Storm, it consumed unacceptable levels of time and money in an era of brush wars and budget cutbacks.

Accordingly, the Corps set out to upgrade its supply chain operations. At first it thought information technology was the solution, but IT was in fact a big part of the problem. Over the years, the Marines had assembled more than 200 separate logistics systems, with virtually no integration. (In presentations, McKissock calls the computer tangle the “Rat’s Nest.”) Forget moving Iron Mountains; it took seven to eight days just to deliver a readily available part to a repair technician.

Finally, the Corps realized that fixing its supply chain “wasn’t an IT issue, but a process issue,” says McKissock. “The light went on for us.” Illumination came in particular at The Pennsylvania State University’s Center for Logistics (now Supply Chain) Research. For 12 weeks in the fall of 1998, guided by Penn State professors and consultants from Sapient Corp., McKissock and his logistics team studied how civilian outfits like Wal-Mart, UPS, and W.W. Grainger ran their supply chains. They came away with a battle plan for reengineering Marine logistics.

Semper Supply

That plan emphasizes information and speed, not mass. The Marines want to be able to send supplies to troops anywhere in the world within 24 hours, while reducing their insurance policy of supplies from 60 days to 30 days or less, depending on the item. (Just-in-time fulfillment is not a goal, since having a sufficient amount of weaponry or equipment or medical supplies always on hand is literally a matter of life and death.) To those ends, they have adopted processes and metrics that value speed.

“We don’t talk about fill rate as much as we do order-ship time and repair-cycle time, which have a real direct impact on the materiel readiness of a weapons system,” says McKissock. “We have completely redesigned our materiel readiness approach — how much equipment is available to the war fighter and how quickly it can be returned to a ready state once it is damaged or there is a malfunction.”

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