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> Home / Archives / Logistics / Performance Based Logistics / Performance Based Logistics / Just in Time Logistics Replenishment to the Fleet

Just in Time Logistics Replenishment to the Fleet

Just in Time Logistics Replenishment to the Fleet

Organization: NAVAIR, PEO (CU)

Team Name: Cruise Missile Support Activity Team

Related Acquisition Topic(s): Acquisition Practices Streamlining, Business Process Reengineering (BPR), Commercial Practices, Financial Management, Guaranteed Operational Effectiveness, Partnering, Performance Based Logistics

Description:
Background:
PMA-281 produces the hardware and software products which provide the capability to plan, disseminate and validate TOMAHAWK missions both ashore and afloat. The Afloat Planning System (APS), an Acquisition Category III program in full rate production, provides conventional TOMAHAWK Land Attack Missile (TLAM) planning capabilities across the Fleet by migrating software to downsized Commercial-off-the-Shelf/Non-Developmental Items (COTS/NDI) computer hardware on Aircraft Carriers. Additionally PMA-281 manages the COTS/NDI based Joint Service Imagery Processing System - Navy (JSIPS-N) which provides very near real time national and tactical imagery products to Aircraft Carriers, Amphibious Assault ships and Flagships to improve battlegroup tactical flexibility and responsiveness, and to enhance wartime utility of intelligence and of Precision Guided Munitions (PGM). The Cruise Missile Support Activities (CMSA) provide the TLAM planning capabilities ashore at CINCUSACOM and CINCUSPACOM.

In January of 1996, PMA-281 declared permanent interim logistics support for the APS and JSIPS-N systems. The Program Office was in the process of trying to establish traditional Navy logistics supportability through the Navy's Inventory Control Point (NICP), but through mutual agreement with the NICP broke ranks due to the unique logistics requirements of COTS/NDI equipment. With no discernible other means of providing logistics support to both afloat (APS & JSIPS-N) and ashore (CMSA) operational customers, the Program Office teamed with the Defense Logistics Agency (DLA) and Federal Express (FEDEX) to build a logistics support system that fits the needs of PMA-281 customers and will lead the logistics community into the 21st century. To date, this system has proven that material readiness can be not only maintained, but also increased at a significantly reduced cost by leveraging off of best commercial practices.

Objectives:
The objective of the FEDEX logistics system is to maintain or increase material readiness while at the same time reducing the cost of logistics. This objective can be achieved by reducing the size of the inventory while at the same time reducing the logistics response time to the customer. The objective has been met. During the most recent deployment of the USS Carl Vinson (CVN-70) to the Pacific and Indian oceans, the first ever deployment using this concept, material readiness for the APS and JSIPS-N common systems was recorded in excess of 96 percent. The average transit time for material being requested by the ship was six and one half days (compared to Navy reported 32 days). Similar time reductions have been met for the ashore systems as well. The ship was originally scheduled to deploy with a range of 237 and a depth of 535 piece parts costing over $1,000,000. The Carl Vinson actually deployed with a Pack Up Kit (PUK) that included 40 piece parts with an associated dollar value of $195,818. Overall cost avoidance incurred to date for the FEDEX based logistics system is $12,680,000.

Premium Service:

A total of 23 afloat customers and six ashore mission planning facilities will ultimately be supported by this concept. Currently there are nine afloat users and six ashore customers using this system. The total inventory of 3,042 parts are maintained in a Government Owned, Contractor Operated (GOCO) facility that is collocated with the main FEDEX transportation hub in Memphis, TN. By contract, FEDEX is required to maintain inventory validity at a minimum of 99 percent. DLA wrote and administers the contract with FEDEX. To DoD customers, this FEDEX logistics system is called Premium Service. FEDEX has been providing this same service to the commercial sector through their Parts Bank facility for more than 15 years.

Cost Avoidance Detail

 

FEDEX
Premium Service

Traditional
Logistics Support

Avoidance

Inventory Cost
Transportation Cost
Total

$31,858.92
$2,257.99
$34,116.91

$36,723.40
$1,757.99
$38,481.39

Insignificant

Piece Part Cost
JIT STK Replen
Total

$3,779,020.00
N/A
$3,779,020.00

$9,000,000.00
$154,000.00
$9,154,000.00

$5,374,980.00

Avoidance per
Deployment (1)

$500,000.00

 

$500,000.00

Depot Transfer (2)
TPS Procurement (3)

Total

$6,805,020.00
($385,000.00)
$6,420,020.00

 

$6,420,020.00

Total Avoidance

   

$12,680,000.00

Cost avoidance figures do not reflect value added elements provided by FEDEX such as material tracking, total asset visibility, packaging and preservation, packaging certification, and money back guarantees.

Notes
(1) USS Carl Vinson (CVN-70) represents the only completed APS/JSIPS-N deployment to date. Currently, USS Theodore Roosevelt (CVN 71) is on the second deployment using the FEDEX logistics system.

(2) Represents cost avoidance achieved by moving from an organic repair depot maintained by the Defense Mapping Agency (DMA) to the contractors facility in San Diego. This move allowed the Program Office to leverage off of existing factory Test Program Set(s) (TPS) vice having to procure and outfit the DMA depot.

(3) Represents cost incurred to modify factory TPS units for repair purposes.

Specific Operating Guidelines

  • Inventory is maintained at the FEDEX facility in Memphis, TN.
  • The ship or ashore facility maintains a PUK designed to eliminate single point failures.
  • The customers use e-mail via the internet to transmit parts requests to the FEDEX warehouse. Once the request is received, warehouse personnel acknowledge receipt of the request and provide the Air Way Bill (AWB) numbers to the customer. Using the AWB, the customer then maintains complete in transit visibility while material is in transit. In FY 97, this system will be replaced and ordering will occur using a catalog maintained on the FEDEX home page.
  • Shipments are made in reusable containers using FEDEX air shipments. These containers are used to return Depot Level Repairables (DLR) to the appropriate commercial repair depots. FEDEX also provides prepaid return shipping labels with each shipment of a DLR to ensure expeditious return to the depot.
  • The World Wide Web or the FEDEX provided software tracking package is used to track shipments while in transit.
  • The In Service Engineering Agent (ISEA) as well as the Original Equipment Manufacturer (OEM) maintain on line access to the inventory maintained in Memphis. Stock replenishment is accomplished on a Just In Time (JIT) basis.
  • Depot repair facilities have been moved from a Defense Mapping Agency (DMA) facility to the OEM to leverage off of factory Test Program Sets (TPS) thus increasing cost avoidance figures and further reducing lengthy repair turn around times.

NAVAIR, PEO (CU)

Cruise Missile Support Activity Team



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Deputy Assistant Secretary of the Navy for Acquisition Management, DASN (ACQ)
Director, Acquisition Career Management
Deputy Assistant Secretary of the Navy for Logistics, DASN (LOG)


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