Chain of demand: Military looks to commercial logistics apps

Former Army Col. Verle Hammond (right), now president and CEO of Innolog, is using his experience as a logistics officer to design systems for tracking supplies. Jerry Woolever is senior vice president of homeland security operations.

Olivier Douliery

"When people can see what is going on, they can change the business processes they have. They can take what they see and embed that into an improved method of doing business."? Jeff Holmes, Manugistics Inc.

Henrik G. de Gyor

When the Defense Logistics Agency needed to centralize the Defense Department's hazardous material reporting process, it procured a system originally deployed for Shell Oil Co. by American Management Systems Inc. The new system went live in October, said David Cogar of AMS.

Henrik G. de Gyor


Ask Verle Hammond about logistics, and he replies: "Steaks and ice cream."



Before founding Innovative Logistics Techniques Inc. in 1989, Hammond spent 28 years as a logistics officer for the Army, rising to the position of staff officer for the Army's Deputy Chief of Staff for Logistics. Most memorable, however, was his tour of duty in Vietnam, where he was assigned to the First Infantry Division in 1966 and 1967.



On one mission, a particularly ambitious division commander ordered an entire brigade to move overnight into a jungle region between Saigon and Cambodia. Hammond and his assistants worked feverishly through the night, and by morning they had established a reliable supply chain for ammunition, weapons, fuel and other supplies.



But when his team reported to the commander's jungle headquarters the next morning, instead of praise, they were given additional orders.

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"Tonight, when these soldiers get done fighting, I want them to have steaks and ice cream," the assistant commander told the tired logistics crew.



Hammond and his team spent the rest of the day making phone calls and tracking down those items. And that night, in the middle of the jungle, miles from the closet major metropolitan area, the brigade dined on steaks and ice cream.



Getting the ammunition and weapons, as well as the steaks and ice cream, to the outposts of freedom -- in whatever remote region of the globe they may be -- has always been the game of logistics. But today, the military has primarily one goal in mind when it comes to logistics: Make the assets across the supply chain more visible to those who need them.



The growth of the logistics engineering market is modest, less than the overall growth rate for the Defense Department's information technology budget, said Ray Bjorklund, a vice president with IT research and consulting firm Federal Sources Inc., McLean, Va.



But in the past eight years, the Office of the Secretary of Defense has been pushing the services to increase the "in-transit visibility" of their logistics systems, Bjorklund said.



Improving visibility is easier said than done. Few logistics systems were designed to offer all-encompassing views of all the assets on hand or nearby, especially if those resources were outside the original purview of those systems.



For example, if a Marine Corps truck breaks down in front of an Army supply depot with the very part the broken vehicle needs, that vehicle must still be towed back to the Marines' outpost for repairs. Frequently, there are no systems or processes in place that allow for sharing resources, said Lt. Col. Scott Koster of the Marines' Integrated Logistics Capability Center. He spoke at an October supply chain conference held by Sapient Corp., Cambridge, Mass., one of several commercial-sector logistics engineering companies focusing on the military market.



"Logistics systems have evolved in stovepipe applications. It's really difficult for the Defense Department to tell what it owns in warehouses and what they have on order," said Len Pomata, president of the federal business unit of WebMethods Inc., Fairfax, Va., which provides the middleware integrators use to help agencies bridge multiple legacy systems.



As a result, the challenges -- and opportunities -- presented to integrators are to provide "the ability for customers to have a seamless single view of their systems," Pomata said.

TAP COMMERCIAL SOLUTIONS


That the logistics systems in place did not offer visibility made itself apparent in 1991 during the Persian Gulf War, said Lou Ray, president and chief executive officer of government integrator Matcom International Corp. of Alexandria, Va., which supports logistics activities for the Defense Logistics Agency and the Navy.



"We loaded stuff onto airplanes and ships, and shipped it off to the Middle East. When it got there and was unloaded into vast holding areas, it was very difficult to find anything," Ray said.

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The supply chain was inflexible, a weakness when dealing with fast-footed adversaries.



"If the cargo was scheduled to go to Egypt, but all of a sudden there was a shortage in Saudi Arabia, there was no way to know which airplane to divert to Saudi Arabia," Ray said.



To combat these problems, the military has been turning increasingly to technologies used in the commercial sector, seeing how Wal-Mart Stores Inc. cut excess inventory from its supply chain and how FedEx Corp. delivers packages practically anywhere in the world overnight.



When DLA needed to centralize the Defense Department's hazardous material reporting process, it procured a system originally built for Shell Oil Co. of Houston by American Management Systems Inc. of Fairfax, Va.



Even though it was computerized, DLA's previous process required filling out forms by hand, said David Cogar, a senior principle of AMS' environmental practice. The new system, which went live in October, will track more than 270,000 materials, allowing the services to tap in via the Web or, if in remote locations, through CD-ROMs.



Government sales make up 18 percent of revenue for Manugistics Inc., Rockville, Md., said Jeff Holmes, senior vice president overseeing the government practice. This company has long been a player in the commercial logistics field, though it only has been in the government market since 1999, when it won a DLA contract for business system modernization.



Holmes said the company is offering new features such as collaborative planning, integration of tracking mechanisms for different modes of transport, forecasting and analysis of historical data, all of which offer greater visibility for the logistician.



"When people can see what is going on, they can change the business processes they have. They can take what they see and embed that into an improved method of doing business," Holmes said.



"Logistics plays a very big part of our business," said Sam Maccherola, vice president in charge of federal sales for SeeBeyond Technology Corp., Monrovia, Calif. Because increased visibility requires peering into legacy logistics systems, logistics has, of course, been a boom for middleware companies.



SeeBeyond was picked by Computer Sciences Corp., El Segundo, Calif., in 1999 for the 10-year, $680 million Wholesale Logistics Modernization Program, or Logmod, for the Army Materiel Command. Logmod is the Army's implementation of a commercial enterprise resource planning system that will allow service members to track orders and assets in real time.



Because Logmod will draw from approximately 400 logistics systems -- some dating back to the 1960s with little or no documentation -- "anything that can reduce the complexity and the risk is a godsend for us," said Jeff Plotnick, vice president general manager for supply chain solutions at CSC.



For instance, SeeBeyond is consolidating more than 100 file-transfer-protocol sites that were being used across the Army and with outside suppliers to share information with various vendors.



"If any partner would change to another protocol, CSC would have to change the site. SeeBeyond was able to keep those FTP sites in place, so CSC didn't have to change its business processes," Maccherola said.



MRO Software Inc., Bedford, Mass., is also seeing the ability to provide the big picture to the services as a way to improve business. The company's software has long been used by the Defense Department depots and bases to track maintenance of equipment and facilities, said Larry Roe, vice president of the company's public-sector unit.



The key is providing "total asset visibility," Roe said. The newest iteration of its Maximo line of software encompasses functions traditionally carried out by enterprise resource management systems, such as those offered by SAP AG, Waldorf, Germany.



A unified view is superior to the traditional approach of having "one system for IT, one system for weapons, one system for facilities," Roe said. This allows depot personnel not only to know exactly what they have on hand and what state everything is in, but also the ability to prepare more accurate budgets.



The Cherry Point Naval Air Depot in North Carolina uses the company's software to keep records on 200,000 assets, everything from milling machines to buildings.



Similarly, the Naval Systems Support Group in Norfolk, Va., has installed the company's software across its 18 depots to manage ground support equipment and material acquisition.


TAP INTEGRATORS

The upshot of increased visibility? More work for integrators.



Anteon International Corp., Fairfax, Va., has been delivering software development for Los Angeles-based Northrop Grumman Corp.'s work on the Air Force's Cargo Movement Operations Systems since 1989. The latest task order, for $1.6 million issued in June, was for extending CMOS to include more capabilities and greater use, said Ron Lacour, Anteon's program manager for the work.



CMOS is a support system for Air Force bases to move cargo and passengers through commercial and inhouse transportation systems. It tracks factors such as special handling instructions, the routes the materials take and the costs for transport.



"In-transit visibility is our main core capability," said Susan Kirkland, the Air Force program manager for the CMOS program. "If you have a critical part that is being shipped, it will tell you where it is and how long it will take to get there."




Before this system was in place, items could be tracked only by telephone or the defense messaging system, said Rex Geiser, who is the Air Force's lead functional analyst for the CMOS system.



In January, the Air Force decreed that CMOS would take over the traffic management duties for all the services now performed by the Transportation Coordinators' Automated Information for Movement System, which was originally built in the mid-1990s. The system is now maintained by DynCorp, Reston, Va., under a $35 million contract.



Kirkland said that five years ago, they were told CMOS would be subsumed by Automated Information for Movement System. But the reverse has happened: CMOS offered the capability of commercial billing, giving agencies a quick way to comply with the Prompt Payment Act, a 1989 law that required vendors be paid by the government within 30 days, unless otherwise stipulated by contract.



"Now all of our transportation charges are paid for through a U.S. bank in 72 hours, rather than through [the Defense Finance and Accounting Service], which takes about 90 days," Kirkland said.



Visibility has also been good for Hammond's Innovative Logistics Techniques. These days, the McLean, Va.-based company, known as Innolog, employs 800 people, quite an increase from the 12 employees Hammond started with 13 years ago.



Under its first contract, the company helped the Army's European supply posts get a better idea of where their spare parts were. Much of its work with military customers is along similar lines: using technology to improve visibility in the supply chain.



But while the concept of visibility has been good for Innolog, would it have helped Hammond find those steaks and ice cream in Vietnam?



"I often thought what I would have done if I had the Internet in Vietnam," he said, remembering the long hours on the phone tracking down the consumables. "I would have pretty quickly determined who had the ice cream, where the steaks were and how many were available. I would still have had to use a helicopter to bring them in, but it would have been much, much easier from the standpoint of having some strategic information." *



Staff Writer Joab Jackson can be reached at jjackson@postnewsweektech.com.


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