DLA forward stocking: an economic analysis

Air Force Journal of Logistics, Fall, 2007 by John A. Flory, Douglas A. Blazer, Gale Bowman

Article Acronyms

AOR--Area of Responsibility

CAF LSC--Combat Air Forces Logistics Support Center

CENTAF--United States Air Force Central Command

CONUS--Continental United States

DDKS--Defense Distribution Depot Kuwait, Southwest Asia

DLA--Defense Logistics Agency

O&ST--Order and Ship Time

ROP--Reorder Point

SBSS--Standard Base Supply System

USTRANSCOM--United States Transportation Command

End Notes

(1.) Dianna Smith, Determine Feasibility and Criteria for Forward Stocking Air Force-Managed Items at Defense Logistics Agency Depots. AFLMA Final Report Number LR200520800, Air Force Logistics Management Agency, Maxwell Air Force Base, Gunter Annex, Alabama, May 2006.

(2.) Jackie Noble, "Adventures With the DDC-Building a Depot; The Magnificent Seven Make DDC History," DDC News, Winter 2004.

Captain John A. Flory, USAF

Douglas A. Blazer, PhD, LMI

Gale Bowman, USAF

Captain John A. Flory is a project manager, Logistics Studies Innovation Division, Air Force Logistics Management Agency.

Douglas J. Blazer, PhD, is a program manager for the Logistics Management Institute. He is a recognized expert on matters concerning the Air Force supply system. He is also a frequent contributor to the Air Force Journal of Logistics.

Ms Gale Bowman is an operations research analyst, Logistics Analysis Division, Air Force Logistics Management Agency.

Table 1. Direct Versus Forward Storage: Inventory Levels and
Transportation Modes

                   Direct       Forward Storage
                   Route             Route

Modes of       More expensive   Less expensive
Transport      but faster       but slower

Pipeline       Less             More
Inventor

Safety Level   Less             More
Inventory

Table 2. Pipeline Costs and Time

Route                Cost       Time (Days)
                 ($/Shipment)

CONUS Base
Direct                37             11

CONUS Forward
Storage                5             30

Forward Storage
Base                  20             15

Table 3. DLA Criterion Performance:
Demands [greater than or equal to] 4/year

                    Forward        Not Forward
                    Stocked          Stocked

Economical        1,682 ($723K)    9,920 (-$688K)
Not Economical   801 (-$1.388M)            12,186

Total 5-Year Net Loss: -$675K

Table 4. Performance: Cost < $50; Demands
[greater than or equal to] 4/year

                    Forward       Not Forward
                    Stocked         Stocked

Economical       1,646 ($709K)   9,956 (-$701K)
Not Economical     161 (-$30K)           12,826

Total 5-Year Net Savings: $679k

Table 5. Performance: Cost < $50; Demands
[greater than or equal to] 2/year

                 Forward Stocked    Not Forward
                                      Stocked

Economical       4,510 ($1.026M)   7,092 (-$384K)
Not Economical       507 (-$71K)           12,480

Total 5-Year Net Savings: $955K

Table 6. Performance: Cost < $50; Demands
[greater than or equal to] 2/year

                    Forward       Not Forward
                    Stocked         Stocked

Economical       2,780 ($774K)   5,341 (-$286K)
Not Economical     246 (-$27K)            7,452

Total 5-Year Net Savings: $747k

Table 7. Performance: Cost < $50; Demands
[greater than or equal to] 2/year
(DDKS to Forward Base = 5 Days)

                    Forward       Not Forward
                    Stocked         Stocked

Economical       2,861 ($843K)   6,448 (-$337K)
Not Economical     145 (-$11K)            6,345

Total 5-Year Net Savings: $832K

Table 8. O&ST Cost Differences (Items Not Forward Stocked)

Forward Leg   Direct Leg      Cost
  (Days)        (Days)     Difference

     1            11         -$2.6M
     3            11         -$2.1M
     5            11         -$1.5M
     7            11         -$1.1M
     9            11         -$481K
    11            11          $0.0K
    13            11          $357K
    15            11          $747K

Table 9. O&ST Cost Differences
(Items Currently Stocked at Forward Bases)

Forward Leg   Direct Leg      Cost
  (Days)        (Days)     Difference

     1            11         -$21K
     3            11         -$16K
     5            11         -$12K
     7            11          -$8K
     9            11          -$4K
    11            11           $0K
    13            11            4K
    15            11            7K