Logistics Management: Harnessing the Web

Federal officials are increasingly turning to Web-based solutions to improve logistics management and help agencies perform their missions better, cheaper and faster."The government has had strong interest in implementing logistics systems dating back to the early 1980s, but the latest technology is driving agencies to go with Web-based management systems and portals," said Tom Farmer, account manager for Defense Department logistics systems at Robbins-Gioia Inc., Alexandria, Va. Many agencies are moving to connect stovepiped logistics management with broader electronic government solutions, said James White, senior vice president of i2 Technologies Inc., Dallas.Technologies such as electronic procurement "will serve as the on-ramp for a pervasive move from single-focus logistic management technologies to broader-based e-supply chain management solutions," White said. His company's software helps manufacturers plan and schedule production and related operations, such as raw materials procurement and product delivery and allows them to create electronic marketplaces that link employees, customers and suppliers.Logistics is that part of the supply chain process "that plans, implements and controls the efficient, effective flow and storage of goods, services and related information from the point of origin to the point of consumption in order to meet customers' requirements," according to the Council of Logistics Management. The not-for-profit organization in Oak Brook, Ill., is made up of 15,000 people worldwide with interests or responsibilities in logistics and functions related to the logistics profession. Today, Web-based technologies are used to help government organizations reduce the time it takes to field systems, to optimize routing and scheduling applications and to track equipment and orders to improve inventory speed, according to industry and government officials.With an estimated annual growth rate of 32 percent, the total supply chain management market, which includes logistics management, will rise from $6.7 billion in 2001 to $21.1 billion in 2005, according to AMR Research, a Boston-based provider of research and analysis on e-business strategies and technologies. The overall enterprise commerce management market for applications and services is expected to hit $264 billion by 2005, up from $108 billion in 2001, AMR said.In its forecast, AMR said market leaders include i2 Technologies; Germany's SAP AG; IBM Corp., Armonk, N.Y.; Manugistics Group Inc., Rockville, Md.; and J.D. Edwards, Denver.The quest for technology that can slash the cost of acquiring and moving critical equipment and dramatically increase an organization's efficiency is evident at the Department of Defense, officials said. One of the most visible logistics modernization efforts in government is the Defense Logistics Agency's Business Systems Modernization initiative. Last August, Accenture Ltd. snagged the prime contractor role on the effort, worth up to almost $400 million, which is designed to make dramatic changes in the way the agency does business and address deficiencies in existing systems. DLA's strategy is to be a virtual logistics enterprise made up of centers that are geographically separate but operationally joined. A Manugistics and SAP R/3 supply chain suite will replace existing mission-critical materiel management systems, "providing a comprehensive business solution to one of the world's largest logistics support organizations," according to Accenture.DLA, which provides supply support and technical and logistics services to the military services and several civilian agencies, is based at Fort Belvoir, Va. The agency is the one source for nearly every consumable item, whether for combat readiness, emergency preparedness or day-to-day operations. With its work for Air Force depots, Robbins-Gioia officials have developed a tool that is helping the service improve its aircraft maintenance repair overhaul process. The Web-based, wireless, bar-code tracking system not only follows aircraft parts removed during overhaul but links back to the schedule to see when the parts are needed to be reinstalled on the aircraft, company officials said. As a result, aircraft companies can see the repair status and projected completion date, company officials said. Overall, the tool creates repair priorities based on aircraft need, allows critical decisions to be made regarding overtime and provides real-time repair status for workload scheduling, they said.On a larger scale, the Global Transportation Network, a Web-based logistics management system developed for the Defense Department by Lockheed Martin Corp., Bethesda, Md., can pinpoint the location of critical equipment and munitions, enabling delivery to the nation's warfighters when and where they need them."The ability to see your material, track it and know where it is has become critical to the DoD bottom line in terms of how you order, what you order and assurance of knowing the health of the order," said Dave Hinton, program manager for transportation and logistics of the GTN system at Scott Air Force Base, Ill.With the system, authorized users, from supply clerks at seaports to command center officials at U.S. Transportation Command headquarters, can open a Web browser and find where their shipment is, where it is headed, when it will get there and what it contains, company officials said.There are more than 6,000 system users, said Alan Heath, program manager for GTN at Lockheed Martin. "As the system becomes more understood and broader in coverage and visibility, more people sign up and want to come on," he said.That number is not likely to increase significantly, however. That is because the system is automated so that one person in a command center can make a query and schedule it to run every day, and then schedule an e-mail to be sent to numerous others, company officials said. The Air Force's Electronics Systems Division at Hanscom Air Force Base near Boston awarded Lockheed Martin the prime contract for the system in 1995. Scheduled to run through June 2003, the contract is worth $240 million.Officials at Scott Air Force Base are managing the contract for Transportation Command officials, who have signaled their intent to have a follow-on system. The system processes 2,100 user queries and 2.1 million transactions per day and uses secure, encrypted servers to keep data safe, according to the company.In February, the program was honored with the 2001 Federal CIO Council Center of Excellence for Information Technology award. The honor recognized the Transportation Command for successfully applying Web-enabled technology to significantly cut costs and improve performance, resulting in an estimated savings of more than $2.3 billion. The award was presented at the Armed Forces Communications and Electronics Association's (AFCEA) 6th annual Virtual Government Conference in Washington.I2's White said the potential to move to intra- and interagency portal-based access and management ? as well as the benefits associated with tighter integration with inventory control, accounting and other enterprise applications ? promises to spur important efficiencies in the years ahead. Such efficiencies will occur "not only within agencies and across government but with commercial suppliers and citizens and customers as well," he said.It seems logical that the government will move increasingly to leverage e-marketplace technologies to support logistics management and a host of other mission-critical applications, said White.A Web tool proving beneficial to Navy officials tasked with developing long-range logistics transformation plans is software vendor Lotus Development Corp.'s QuickPlace. Cambridge, Mass.-based Lotus, a subsidiary of IBM, introduced QuickPlace in 1999. Among its other products are Lotus Notes communication and collaboration software used for business intranets and its Domino messaging applications. One of many Web tools used by Navy officials working on the logistics transformation blueprint, QuickPlace allowed defense officials to save time, reduce travel costs and produce an improved final result, said Mark Honecker, director of Navy Logistics Planning and Innovation at the Pentagon.The Navy used QuickPlace for the first time about a year ago in response to a defense reform initiative requiring the services to put together complex logistics transformation plans that typically involve the participation of almost every command in the Navy worldwide, he said."Normally, we would bring in people from all over the world from each of the commands" to provide input on how they are changing logistics and what they are doing in the future, he said. This process would then continue for several weeks or more as numerous reviews would get under way and information would be redistributed."We decided to try something different," said Honecker. This time, major players were invited to an initial, face-to-face meeting "to establish relationships and the rest of the time we worked virtually," he said. A Web page was set up in a matter of minutes that posted the information the lead action officer felt participants needed to begin creating the logistics plan. The 30 or so people involved in the project as primary points of contact went back to their commands and obtained input. Defense officials could then work on the plans in their offices, "on their own turf." The product provides an instant electronic work space and features built-in task management so users can assign action items and deadlines. The virtual collaboration features increased the number of people working on the transformation plans, which led to an improved final result, Honecker said."Clearly, the quality of the product is much better," and there are savings because of reduced travel costs. But the biggest thing, he said, "is velocity. We're getting answers when they are needed."The success of this and other tools the Navy has implemented based on the Lotus Domino structure also fits with where the service is going in its quest to transform its logistics processes and move to a Web-enabled environment. "It is a whole new way of doing business, and we have just scratched the surface of how we can use these tools to improve the way we perform our logistics functions," said Honecker."We're seeing government agencies that have these big systems that don't address the unique needs of the team that might be here today and gone tomorrow, said Brennan O'Hara, QuickPlace brand manager at Lotus Development. The product has improved team efficiency by helping participants "navigate the wealth of information that might exist across an organization," he said.