Building Smart Supply Chains for Agility: The Logistics Matrix

Logistics Spectrum, Jan-Mar 2004 by Segars, Albert H

Many would argue that the greatest advantage of successful fighting forces is the ability to create superior lines of supply. Clearly, an ongoing advantage of U.S. forces is the ability to bring superior resources to any theatre of operation. This is particularly true when the theatre is "conventional." Conventional warfare is force opposed to force for control of well-defined strategic objectives such as land, resources or political ideology. However, many of today and tomorrow's engagements will be non-conventional. These engagements are ill defined in terms of national boundaries and disputed resources; further, they are based both on religion and political ideology. In addition, the enemy is a mobile and unpredictable rogue squadron of mercenaries, civilians and soldiers rather than a clearly identifiable force.

Given this changing landscape of war, it is quite possible that the assumptions that underlie military logistics need to be reexamined and reengineered to meet the challenges that lie ahead. This seems particularly true given the emergence of new technologies such as RFID (Radio Frequency Identification) tags, intelligent agents and wireless devices. It is quite possible that the logistics infrastructure of the military is not adequate for the missions to come and is also not leveraging the capabilities of new technology. While such a situation may not render the U.S. incapable of victory in the military theatre, it does drive the cost of conflicts to unprecedented levels and, as a result, may limit the ability of the president and military leaders to effectively use force for the resolution of conflict. Evidence of this is now visible in news reports and voter backlash regarding the "cost" of operations in Iraq. Without a logistics infrastructure that can be configured and reconfigured to meet the demands of unconventional warfare, the United States may be limited in its ability to pursue strategic objectives within the military theatre. No business could operate logistics as the military does and hope to survive. Clearly, business and the military are not completely comparable; however, both share a common objective in the pursuit of effectiveness. Both must create configurations of supply chain to adapt to uncertain and ever-changing conditions. The right definition of a military supply chain depends on the definition of war. In the future, that definition is likely to change constantly. This article develops the notion of logistics as a matrix of resource flows between the warf ighter and sources of supply. This definitional perspective reveals potential flaws in the current design of process and technologies within the Department of Defense (DoD) and also identifies opportunities to achieve greater agility for forces in the theatre.

Supply Chains as a Matrix of Information and Material Flow

Perhaps the most misleading aspect of supply chain (SC) is its conceptualization. For many organizations SC is framed as a linear flow of products from supplier, to wholesaler, to retailer, to ultimate customer. Once conceived in this manner the operational problem is to optimize flow in the channel to meet specified criteria. These criteria are based on composite averages (flow time, days waiting) or on variance measures (time definite delivery). Over time an entire field of operations research has emerged to study the issue of flow through SC channels. Clearly, this research is important and has yielded important insights. However, such studies and associated models are clearly not the "end game" of structuring logistics chains. Many times these models place assumptions on SC flows that are not consistent with "real world" situations. They may also assume a flow of linear data, information or goods, which is not close to the complexities faced by many organizations. Finally, they may miss the conceptual or cognitive element of logistics strategy that is essential in staging unconventional theater operations.

Rather than conceptualize SC as linear flows, it is necessary to frame SC as a matrix of horizontal and vertical distribution flows, forward and lateral, that can be configured and reconfigured based on the needs of the customer, or in the case of the DoD, the warfighter. In other words, a supply chain is not a chain at all; it is a matrix. This conceptualization is illustrated in Figure 1. As shown, resources (material, data and information) may flow up and down, across a Major Forward Distribution Axis (4), or back and forth across a Major Lateral Distribution Axis (E). Resources may also flow across minor Forward Distribution Axes (1, 2, 3, 5, 6, 7) and across Minor Lateral Distribution Axes (A, B, C, D). At the intersection of these axes are nodes of resource stock. This may be in the form of material inventory, information systems or databases. When conceptualized as a Logistics Matrix the challenges and opportunities for improved agility at lower cost become readily apparent. In the following sections these opportunities and challenges are outlined within the context of lessons learned within the theatres of Iraq and Afghanistan.