Defense Logistics: DOD Needs to Take Additional Actions to Address Challenges in Supply Chain Management

As part of its efforts to address supply chain management challenges, DOD developed the Strategy for Improving DOD Asset Visibility (Strategy) in 2014, with subsequent updates in 2015 and 2017, and the Materiel Distribution Improvement Plan (MDIP) in 2016. Both plans include corrective actions that identify the scope and root causes of capability gaps, including actions to be taken to implement solutions. In addition, both plans include characteristics of strategic planning, such as a mission statement, goals, and performance measures, among other things. Further, the Strategy and the MDIP also document how improvement efforts will integrate with DOD's other decision-making processes, delineate organization roles, and support DOD-wide priorities. The development and implementation of these corrective action plans help to improve DOD's supply chain management and address challenges in asset visibility and materiel distribution.

DOD concurred with our recommendation and included detailed implementation guidance in the Strategy for Improving DOD Asset Visibility (Strategy), issued in 2014, with subsequent updates in 2015 and 2017; and the Materiel Distribution Improvement Plan (MDIP), issued in 2016. The 2017 Strategy and accompanying implementation plans are intended to improve asset visibility and provide detailed guidance to affected stakeholders involved in implementing the performance management framework for logistics. For example, the components are designated as the offices of primary responsibility to ensure the successful execution of their initiatives, including developing cost estimates and collecting performance data. The 2017 Strategy provided additional guidance related to performance measures, recommending that components consider the key attributes of successful performance measures during metric development. The MDIP also provides detailed guidance to stakeholders throughout the distribution enterprise. In July 2018, DOD closed three action items by adjusting DOD policy clarifying the roles and responsibilities of DOD's distribution stakeholders. For example, DOD revised Instruction 4500.57, Transportation and Traffic Management, to require U.S. Transportation Command to routinely share performance metrics, including cost data, to distribution stakeholders. As a result of these updated guidance, DOD has taken steps to institute a performance management framework for guiding and overseeing asset visibility and materiel distribution.

As part of its efforts for addressing supply chain management challenges, DOD developed a communications strategy in issuing the Strategy for Improving DOD Asset Visibility (Strategy) in 2014, with subsequent updates in 2015 and 2017, and the Materiel Distribution Improvement Plan (MDIP) in 2016. The Strategies and MDIP are linked with corrective action plans, contain performance measurement information, and inform both internal and external stakeholders. The 2017 Strategy identified eight improvement initiatives developed by the components intended to improve asset visibility and included additional guidance related to performance measures. When an initiative is complete, the Asset Visibility Working Group files an after-action report that includes information related to performance measures used to assess the success of the initiative, and informs both internal and external stakeholders. The MDIP guides and directs DOD efforts to improve materiel distribution by recommending corrective action items to close identified performance gaps. Throughout fiscal years 2017 and 2018, the distribution governance bodies and stakeholders have met quarterly to review progress made on the MDIP's corrective actions and refine interim milestones and tasks, and include information sharing and reporting requirements. The MDIP included a corrective action for DOD to develop a suite of performance metrics designed to identify performance challenges and capability gaps across the distribution enterprise, which was approved by DOD officials in 2017. As a result of these efforts, DOD has taken steps to institute a performance management framework for guiding and overseeing asset visibility and materiel distribution improvement efforts.

To define or clarify the roles and responsibilities of the supply chain governing bodies, DOD issued the charter for the Supply Chain Executive Steering Committee (SCESC) in October 2011 and developed the Charter for the Joint Deployment and Distribution Enterprise (JDDE) Governance, which replaced the Joint Logistics Board, in January 2013. The SCESC charter states that the SCESC will review performance measures and provide oversight on the implementation of initiatives designed to drive logistics improvements and will provide direction to strengthen the capabilities of DOD's supply chain. Also, the SCESC charter defines roles and responsibilities of the chair/co-chairs, members, and the secretariat as it pertains to these efforts. Additionally, the charter for JDDE Governance identifies the JDDE Community of Interest as the body that shall oversee the prioritization of distribution capabilities, gaps, process improvement initiatives, and information technology solutions to enhance enterprise-wide efficiency and effectiveness. Further, the JDDE charter also specifies the roles and responsibilities of its chair and members and advisors. As a result of revising existing charters, DOD has implemented the management framework for guiding and overseeing its supply chain improvement efforts.

As part of its efforts for addressing supply chain management challenges, DOD issued the Strategy for Improving DOD Asset Visibility (Strategy) in 2014, with subsequent updates in 2015 and 2017, and the Materiel Distribution Improvement Plan (MDIP) in 2016. The Strategies and MDIP use a collaborative process, involving all key stakeholders, to identify, develop, and implement enterprise-wide performance measures needed to demonstrate progress in asset visibility and materiel distribution. These measures were incorporated into corrective action plans and the performance management framework. For example, the 2017 Strategy details components' initiatives intended to improve asset visibility, includes both milestones and performance measures for monitoring their implementation, and includes additional guidance related to performance measures for components to consider the key attributes (i.e., clarity, measurable target, objectivity, reliability, baseline and trend data, and linkage) of successful performance measures during metric development to improve DOD's efforts to monitor asset visibility initiatives. In addition, in 2017, DOD approved a suite of five metrics to measure performance across the materiel distribution enterprise. As a result of these efforts, DOD has demonstrated the progress it has made in managing asset visibility and materiel distribution.