Pentagon Looks To Streamline Supply Chain

The Department of Defense is working to accelerate its supply chain so that soldiers in the field have materials they need when they need them, the Pentagon's director of supply chain transformation said Monday.

Reorganization and realignment of core business processes is one of the main efforts to revolutionize the supply chain, ensuring a streamlined approach to procurement. "We're really trying to drive a fundamental change of thinking," director Mark E. Krzysko said. For example, the department wants to have an enterprisewide system in place to watch existing contracts so it can eliminate redundant ones.

As technology evolves and systems become quickly outdated, the Pentagon wants faster, more efficient turnaround from research to deployment. IT companies could well expect to be in on this transformation, and analysis group Input expects a $1.2 billion growth in IT contracts from the Department of Defense over the next five years, to $8.4 billion by 2010.

The department also wants to know that materials are available and easy to locate when they already exist. "One of our top priorities is contingency contracting," Krzysko said. Down to the battlefield level, he said, the military should be able to give a soldier a laptop that has the capability to locate and buy materials, while the whole process should open to audit by the local base and Pentagon in real time. Longer-term, RFID chips have the potential to dramatically change the way materials are handled by the military, he said. RFID implementation begins next year.

Several related projects already have been placed on the front burner for most of this year, including Logistics Joint Administrative Support Services II, a broad reengineering and modernization of logistics processes, and the Defense Information Systems Agency's Encore II, a more sweeping set of contracts. These two projects alone amount to about $5 billion in contracts available to IT companies.