DLA unveils new logistics system

The Defense Logistics Agency has launched a limited version of its new Business Systems Modernization system, marking a first step in the agency's $500 million, five-year revamping of its out-of-date logistics systems.

The purpose of the limited initial rollout is to demonstrate both the business concepts and the technologies used in BSM, said David Falvey, program executive officer in charge of modernization programs at the defense agency. The concept demonstration phase, which was turned on July 31, includes 80 percent of the system's functionality, incorporates less than 5 percent of the items handled by DLA and is being used by 390 users and 100 supervisors, he said.

Accenture Ltd. of Hamilton, Bermuda, is the prime contractor on the BSM contract, which was awarded August 2000. Working with Accenture are SAP America, the U.S. subsidiary of the German company SAP Aktiengesellschaft, Manugistics Group Inc. of Rockville, Md., and American Management Systems Inc., Fairfax, Va.

"The most important thing about BSM to DLA is the transformation of its business practices, about embracing the best commercial practices," Falvey said. "It's about making DLA operate the same way as a Fortune 500 company."

The demonstration phase will last about a year. It is being carried out at DLA's facilities in Columbus, Ohio, Philadelphia, and Richmond, Va., which handle a wide variety of materials such as medical supplies, rations, electronic components and parts for ground and aerial weapons systems. The supply center in New Cumberland, Pa., also is included in the demonstration. There will be new rollouts at additional locations in each of the next three years.

"For example, in the release we're going to do in 2003, [we'll] target the remaining 20 percent of functionality and roll out to another 1,000 employees and another 1 million items," Falvey said.

The new logistics system's performance will be measured on a variety of factors, Falvey said, including improved order processing time, improved demand forecasting, reduced inventory carrying costs and reduced information technology operating costs.