Optimizing the supply process at the Defense Logistics Agency: a case study

Defense AT&L, Nov-Dec, 2004 by John F. Horn

Classroom discussion encompasses an in-depth look at potential methods to improve the service DLA provides by examining alternatives available to McMahon. As the students discuss the dilemma in the case, my questions focus their attention on three main areas: contractor motivations; the support parts process; and IMPAC card ramifications. I ask, "Why isn't the contractor motivated to return quotes in a timely manner?" And then, "What can we, the acquisition, technology, and logistics workforce, do to motivate the contractor?" The questions lead to a debate/discussion of contractor priorities and financial profitability. The desired outcome is discussions of how the AT & L workforce impacts contractor priorities by incentives and of alternative ways to incentivize contractors considering the impact on each phase of the acquisition life cycle.

Another area ripe for discussion is the role of DLA in the acquisition process. "Is DLA's role obsolete?" I ask. The ensuing debate rages as each individual student must make some difficult ethical decisions. Does a PM make a decision that is best for his or her program or Service or for the DoD? Should a PM pay a higher price for a nonstandard part in a tight budget environment because it is more readily available on the local market? To the very astute students, these questions integrate DLA's role and the use of IMPAC cards, and they discover and share the adverse financial and quality impacts on the PMO and ultimately DoD of using IMPAC cards to purchase parts. But I am always prepared to play devil's advocate and ask the question, "How does the use of IMPAC cards decrease the effectiveness of DLA?" This discussion emphasizes how IMPAC card purchases mask true inventory control levels, and it highlights the higher price paid for the parts, helping students understand how a seemingly innocuous action--IMPAC card usage by one user--could degrade the efficiency and effectiveness of the DLA and DoD if adopted by all users.

Risk identification and mitigation are integral parts of solution implementation and when discussed in detail, force students to the foundation of critical thinking--questioning their beliefs and assumptions. It, along with the case assignment questions, is the basis of the entire discussion. Together, they lead students to answer the following questions: What are the most important decision factors? How do they influence my decision? And what is the associated risk?

Case Methodology Beyond the Classroom

The case method is a powerful learning tool because it integrates all aspects of an issue or decision. It forces students to work as a team and to consider different viewpoints. When it is set up properly, the case method is also a valuable problem-solving tool for a PM. Gathering the information required to develop a case forces the decision maker to consider and prioritize the decision factors and to ferret out possible alternatives and assumptions, activities that greatly improve the decision-making process. The Defense Acquisition University is available to assist the AT & L workforce in this endeavor by facilitating team discussions using the case teaching methodology.