Defense Logistics: A Completed Comprehensive Strategy is Needed to Guide DOD's In-Transit Visibility Efforts
Released: 2013-02-28T00:00:00

Letter

Background

The performance of DOD’s materiel distribution system relies on many stakeholders, each with different responsibilities, systems, and processes. Many organizations within DOD have important roles and responsibilities for supply chain management, and these responsibilities are spread across multiple components with separate funding and management of logistics resources and systems. The Under Secretary of Defense for Acquisition, Technology and Logistics serves as the principal staff assistant and advisor to the Secretary of Defense for all matters relating to defense logistics, among other duties, and is the department’s Defense Logistics Executive, with overall responsibility for improving and maintaining the defense logistics and supply chain system. The Assistant Secretary of Defense for Logistics and Materiel Readiness, under the authority, direction, and control of the Under Secretary of Defense for Acquisition, Technology and Logistics, is the principal logistics official within the senior management of DOD. Within the Office of the Assistant Secretary of Defense for Logistics and Materiel Readiness, the Deputy Assistant Secretary of Defense for Supply Chain Integration improves the integration of DOD’s supply chain by developing policy and facilitating the components’ implementation of supply chain management practices, among other duties. The Deputy Assistant Secretary of Defense for Supply Chain Integration develops and directs DOD-wide supply chain integration functions by establishing and maintaining policies that are intended to deliver efficient, sustainable, and cost-effective end-to-end supply chain performance. Each of the military departments is separately organized, under its own Secretary. Subject to the authority, direction, and control of the Secretary of Defense, the Secretaries of the military departments are responsible for, among other things, organizing, training, and equipping their forces. TRANSCOM, in addition to its responsibilities for transporting equipment and supplies in support of military operations, is designated as the distribution process owner for DOD. The role of the distribution process owner is, among other things, to oversee the overall effectiveness, efficiency, and alignment of department-wide distribution activities, including force projection, sustainment, and redeployment/retrograde operations.

DOD has issued a series of policies, strategic planning documents, instructions, memoranda, and other documents related to logistics and supply chain management over the last several years. Joint Publication 4- 0, Joint Logistics, provides the doctrinal framework which describes how logistics is delivered to support joint operations across the range of military operations. Joint Publication 4-0 also acknowledges the importance of technology in capturing source data effectively, integrating those data, and making them more accessible in order to provide the shared awareness needed to improve planning, decision making, and assessment. Key policies, guidance, and other documents that address many aspects of the department’s supply chain from 2003 through 2011 are described in figure 1.

DOD Is Not Fully Aware of All In- Transit Visibility Efforts across the Department and Lacks a Central Mechanism to Track Their Status

DOD has taken steps to improve in-transit visibility of its assets through efforts developed by several of the defense components, but no one organization is fully aware of all such efforts across the department, because they are not centrally tracked. Based on data we requested and received from DOD officials in several components, we were able to compile a list of 34 in-transit visibility efforts that are being conducted by the components. Currently, DOD conducts some informal coordination and information sharing regarding its in-transit visibility efforts, but information is not consistently shared through a formal mechanism.

We have previously reported that it is important for organizations to have complete, accurate, and consistent data to inform policy, document performance, and support decision making. Additionally, we have found that having to incorporate information drawn from multiple sources can potentially be challenging to those responsible for managing and integrating that information. Managers striving to reach organizational goals must have information systems in place to provide them with needed information. We conducted our own research, in collaboration with the components, to identify the in-transit visibility efforts across DOD, because DOD has not identified and does not yet have a ready means for identifying these efforts. No single defense component could identify all of the efforts across the department or provide cost figures for them. Based on our analysis, 27 of the 34 efforts are each led and funded by a single defense component. For example, the Army leads and funds the Next Generation Wireless Communications effort, a wireless network that provides location, condition, and intrusion-detection information on DOD assets. Of the remaining seven efforts, each is co-led by two or more components. For example, TRANSCOM and the Defense Logistics Agency co-led an effort to merge data from several sources into one system. The 34 efforts are listed in appendix II. Many of these efforts include increasing the use of automatic identification technology tools within the department or enhancing computer systems that store and report data on assets while they are in transit.

Based on information we collected, DOD has obligated about $701 million for fiscal years 2009 through 2011 for these efforts and projected about $455.3 million in costs for fiscal years 2012 through 2015—for a total of approximately $1.2 billion. The Army and TRANSCOM have provided the largest amount of funding for these efforts, compared to the other components. Table 1 shows the amount of obligations and projected costs associated with in-transit visibility efforts, as reported by the defense components.

In addition, some coordination and information sharing among components regarding in-transit visibility efforts is taking place through both department-wide and service-specific activities, according to DOD officials. These activities include conferences, working groups, and workshops. The participants in these activities vary based on the focus of the group. However, participants have included officials from the Office of the Secretary of Defense, the combatant commands, the four military services, the Defense Logistics Agency, and other government agencies that support distribution process improvements. DOD officials explained that these conferences, workshops, and meetings provide opportunities to discuss challenges that the components are experiencing with in-transit visibility and the efforts they are taking to address these challenges. For example, the Marine Corps hosted a logistics summit in November 2011. The participants included officials from logistics offices in the Army, the Defense Logistics Agency, TRANSCOM, and the Marine Corps. During the summit, officials from the various components discussed challenges and issues related to in-transit visibility—such as methods to mandate and implement the use of RFID tags on cargo containers, pallets, and reusable shipping containers and the enforcement of RFID requirements on cargo shipments transported outside the United States. Additionally, TRANSCOM officials said that a list of in-transit visibility points of contact at each component is distributed among the components. According to these officials, the components use the information in this document to reach in-transit visibility points of contact in other components so they can discuss related issues on an ad hoc basis. Officials from the Office of the Deputy Assistant Secretary of Defense for Supply Chain Integration told us that recent workshops have consistently included representatives of the DOD components; these officials believe that the workshops will increase awareness of all in-transit visibility efforts across the department. However, these opportunities to share information are informal, and we found that no one organization was fully aware of all of the in-transit visibility efforts across the department, because information was not consistently shared through a formal mechanism.

DOD’s Draft Strategy to Achieve Asset Visibility and In- Transit Visibility Has Not Been Finalized and Does Not Include Some of the Key Elements of a Comprehensive Strategic Plan

In 2012, DOD began developing a strategy for asset visibility and in- transit visibility; however, as of January 2013 the strategy had not been finalized and did not include some of the key elements of a comprehensive strategic plan. According to DOD officials, the draft strategy, developed in collaboration with all pertinent components, is expected to be completed by June 2013. Officials anticipate that it will be used to guide and integrate related department-wide efforts to improve end-to-end supply chain management and support to the services. According to DOD officials, each component will be expected to develop an execution plan that contains information about its in-transit visibility efforts. The draft strategy indicates that such information is to include descriptions of gaps or challenges within the supply chain and the component’s actions or proposed actions to address them. Our analysis shows that the current draft of DOD’s strategy for asset visibility and in- transit visibility fully includes one of the seven elements of a comprehensive strategic plan, partially includes four others, and does not include the remaining two. Until DOD has finalized its department-wide strategy, with all of its accompanying execution plans, it will not have the information it needs to make well-informed decisions about asset visibility and in-transit visibility, including setting budget priorities for its in-transit visibility efforts across the supply chain in an increasingly constrained fiscal environment.

DOD Has Recently Focused on Developing an Asset Visibility and In- Transit Visibility Strategy but Has Not Finalized It

DOD has policies, instructions, and other guidance in place that address supply chain issues such as the use of technology to track the location of cargo, but these documents have not focused specifically on in-transit visibility. Recently, DOD has recognized the need to develop a comprehensive in-transit visibility strategy. The Deputy Assistant Secretary of Defense for Supply Chain Integration leads and is overseeing the effort to develop the strategy for improving asset tracking and in-transit visibility—which encompasses taking advantage of the automatic identification technology implementation and process integration to date—and ensuring that in-transit visibility is “truly factory to foxhole.” The Deputy Assistant Secretary of Defense for Supply Chain Integration stated that one goal is to refocus department-wide efforts on measurable actions to improve asset tracking and in-transit visibility using automatic identification technology as an enabler when requirements for end-to-end supply chain optimization dictate its use. According to the draft strategy, it will contribute to achieving the following objectives for improving asset visibility (tracking) and in-transit visibility: 1. optimized deployment/redeployment, sustainment, and retrograde enabled by data capture and collection 3. unique identification of assets As of January 2013, this strategy had not been finalized, but the Deputy Assistant Secretary provided us with an overview and a copy of the draft. The strategy was developed collaboratively by the Office of the Secretary of Defense, the Defense Logistics Agency, TRANSCOM, and the services. As a part of developing the strategy, the components are in the process of developing execution plans based on a template provided by DOD that calls for various information about their in-transit visibility efforts. For example, the draft strategy for asset visibility and in-transit visibility, dated November 2012, included execution plans from the Defense Logistics Agency, TRANSCOM, and the Navy. The Army, Marine Corps, and Air Force have developed draft execution plans but have yet to submit them for inclusion in the draft strategy, according to DOD officials.

According to DOD officials, each component will be expected to develop an execution plan that contains information about its in-transit visibility efforts. The draft strategy indicates that such information is to include descriptions of gaps or challenges within the supply chain and the component’s actions or proposed actions to address them. The draft strategy currently indicates that the Supply Chain Executive Steering Committee will conduct periodic progress reviews of the execution plans and related activities. It also includes a template for the components to use in developing their execution plans. This template calls for the identification of each effort’s objectives and activities, a detailed action plan, and measures of success required by the responsible component to ensure that DOD’s strategy is successfully executed and expected outcomes are achieved. Additional detail about information included in the execution plans is provided in table 2.

According to the Deputy Assistant Secretary of Defense for Supply Chain Integration, components were directed to finalize their initial execution plans by June 2013. TRANSCOM, the Navy, and the Defense Logistics Agency have provided execution plans. The Army, the Marines Corps, and the Air Force plan to provide theirs in 2013. Until DOD has compiled all of these execution plans in its draft in-transit visibility strategy and finalized the strategy to include all of the elements necessary for a comprehensive strategic plan, it will not have a comprehensive approach to guide its planning and investment decisions to achieve desired outcomes and goals for department-wide in-transit visibility, including the priority with which to implement these efforts. According to the draft strategy, DOD intends to continuously update the strategy with new execution plans as necessary.

DOD Has Included Some but Not All Key Elements of a Comprehensive Strategic Plan in Its Draft Strategy

DOD’s draft strategy for in-transit visibility includes some but not all of the elements we have identified as necessary for a comprehensive strategic plan. Our prior work has shown that strategic planning is the foundation for defining what an agency seeks to accomplish, identifying the strategies it will use to achieve desired results, and determining how well it will succeed in reaching results-oriented goals and achieving objectives. Combined with effective leadership, strategic planning that results in an integrated and comprehensive strategic plan enables decision makers to better guide program efforts and determine if these efforts are achieving the desired results. According to our prior work, a comprehensive strategic plan should include a mission statement; a problem definition, scope, and methodology; goals and objectives; activities, milestones, and performance measures; resources and investments; information about organizational roles, responsibilities, and coordination; and a description of key external factors that could affect the achievement of goals.

Our analysis shows that the current draft of DOD’s strategy for asset visibility and in-transit visibility fully includes one of the seven elements of a comprehensive strategic plan, partially includes four others, and does not include the remaining two. Specifically, the draft strategy includes overarching goals and objectives that address the overall results desired from implementation of the strategy. Three of the elements we identified as ‘partially included’ are nearing completion, but our review of the draft strategy shows that not all components had submitted their execution plans, which provide key information about the components’ in-transit visibility efforts and describe gaps or challenges within the supply chain, as well as the components’ actions or proposed actions to address them.

The draft also does not include information about the resources and investments that would be required to achieve the goals laid out in the strategy, nor does it include key external factors—issues external to the agency and beyond its control—that could affect the achievement of the strategy’s goals. We have previously reported that it is important to identify resources and investments—which may include skills and technology, human, capital, information, and other resources—in order to be able to monitor efficient use of resources allocated to in-transit visibility efforts and measure the costs and benefits of these efforts. Additionally, it is important to identify key external factors that might affect a comprehensive strategic plan so that a mitigation plan can be developed.comprehensive strategic plan are included in DOD’s draft strategy.

Conclusions

DOD recognizes that challenges to in-transit visibility contribute to the continued inclusion of supply chain management on our high-risk list. The department has a number of efforts that are designed to improve asset visibility and in-transit visibility. However, DOD’s awareness of in-transit visibility efforts, and the resources allocated to them, is limited and DOD does not have a comprehensive mechanism in place for collecting and sharing complete, accurate, and consistent information about these efforts and the organizations conducting them. DOD is currently developing a strategy to address in-transit visibility challenges and guide efforts to achieve in-transit visibility of DOD assets. A key component of this strategy is the inclusion of defense components’ execution plans, which are based on a template provided by DOD that calls for information about their in-transit visibility efforts. Until DOD has compiled all execution plans in the draft and finalized its in-transit visibility strategy to include all key elements necessary for a comprehensive strategic plan, it will not have the information it needs to make well-informed decisions about asset visibility and in-transit visibility, including setting budget priorities for its in-transit visibility efforts across the supply chain in an increasingly constrained fiscal environment.

Recommendation for Executive Action

To increase DOD’s awareness of efforts across the defense components to improve in-transit visibility, and to guide planning and investment decisions for DOD’s in-transit visibility efforts, we recommend that the Secretary of Defense direct the Under Secretary of Defense for Acquisition, Technology and Logistics to finalize a department-wide in- transit visibility strategy that will be implemented across the department.

When finalizing this strategy and the accompanying execution plans, DOD should ensure that complete, accurate, and consistent information about all in-transit visibility efforts is captured, tracked, and shared across the department and the strategy contains all of the key elements of a comprehensive strategic plan, including resources and investments and key external factors.

Agency Comments

In written comments on a draft of this report, DOD concurred with our recommendation to finalize a department-wide in-transit visibility strategy—to be implemented across the department—that ensures complete, accurate, and consistent information about all in-transit visibility efforts is captured, tracked, and shared, and contains all of the key elements of a comprehensive strategic plan. DOD stated that the Office of the Assistant Secretary of Defense for Supply Chain Integration will establish a central repository to ensure that information is shared across the department after the strategy is finalized. DOD also stated that the strategy currently being drafted will be finalized by June 1, 2013, and will include the components’ execution plans, which will contain plans for implementation, cost and resource requirements, and information on external factors that may affect the implementation of each effort.

DOD’s comments are reprinted in appendix III.

We are sending copies of this report to the appropriate congressional committees. We are also sending copies to the Secretary of Defense; the Deputy Secretary of Defense; and the Under Secretary of Defense for Acquisition, Technology and Logistics. This report will also be available at no charge on our website at http://www.gao.gov.

Should you or your staff have any questions concerning this report, please contact me at (202) 512-5257 or merrittz@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. Staff who made major contributions to this report are listed in appendix IV.

Appendix I: Scope and Methodology

To determine the extent to which DOD was aware of its components’ efforts to achieve in-transit visibility, we asked the defense components to provide us with information about their efforts to address in-transit visibility covering fiscal years 2009 through 2015. We provided the defense components with requests for information about the efforts, including the title of each effort, the purpose, funding obligations, projected costs, the lead component for each effort, and whether there were other stakeholder components or agencies. Officials from the components provided us with information that they compiled from various offices within their organizations. We analyzed the information provided and conducted follow-up discussions with officials from each component to identify the efforts that were specifically related to in-transit visibility rather than other aspects of asset visibility and to clarify information that had been provided. To determine which of the efforts reported to us were related to in-transit visibility, we used DOD’s definition of in-transit visibility from Joint Publication 1-02. For the purposes of this report, in- transit visibility efforts are systems, devices, or programs that are intended to improve DOD’s ability to track the identity, status, and location of DOD cargo (excluding petroleum, oils, and lubricants) from origin to destination. To determine the total costs for all efforts, we added together the obligations and projected costs for each effort reported by the components. We did not assess the reliability of the cost information provided by the components, because the cost information they provided did not materially affect our key findings. We interviewed officials to identify coordination mechanisms, both formal and informal, and to determine whether components were sharing information across DOD.

To determine the extent to which DOD has a strategy to achieve in-transit visibility that includes the elements of a comprehensive strategic plan, we identified draft and existing policies and guidance for in-transit visibility across various DOD components and assessed whether such policies and guidance provide a comprehensive strategic plan for in-transit visibility. Specifically, we evaluated DOD’s November 2012 draft strategy for improving asset visibility and in-transit visibility and determined whether it included elements applicable to a strategy for maintaining in- transit visibility of assets in the DOD supply chain. We reviewed prior GAO reports and testimonies pertaining to DOD supply chain management, including our reviews of DOD’s prior strategic planning efforts for asset visibility, and compared the draft strategy and its elements to criteria on effective strategic planning from our prior reports. Specific criteria on the elements of a comprehensive strategic plan that we discussed in previous reports are also discussed in this report. Using these same criteria, we conducted a content analysis of the draft strategy to determine whether specific elements of a comprehensive strategic plan were included. Two analysts independently compared the strategy to the specific elements. The analysts then discussed their individual reviews and reached a consensus in areas where they had disagreed. We met with officials from the Office of the Deputy Assistant Secretary of Defense for Supply Chain Integration, the Defense Logistics Agency, and TRANSCOM to discuss features of the draft strategy and ongoing and possible future strategic planning efforts. We met with officials from the Office of the Deputy Assistant Secretary of Defense for Supply Chain Integration to discuss the draft strategy and the oversight structure for DOD’s in-transit visibility efforts (including senior-level logistics governance bodies) and obtained additional insight and supporting documentation (e.g., agendas and meeting minutes from these bodies) on the purpose, status, and implementation of the draft strategy. For both objectives, we reviewed DOD policies and other documentation, and our prior work on strategic planning and defense logistics.

Appendix II: List of In-Transit Visibility Efforts

The table below provides a list of the in-transit visibility efforts reported by the defense components during the course of our review, a brief description of each effort, and cost information where available. Where no cost information is provided, there was no cost during that fiscal period, the cost was not readily available, or the cost is included with another effort that is listed in the table below. The list of efforts does not include working groups, meetings, conferences, detection metrics, standards, policies, training, or staff actions.

The Navy and the Air Force each have their own Active Radio Frequency Identification (aRFID) Migration Program. These two programs are included with the aRFID Program and the aRFID Infrastructure, respectively and are therefore not listed in the table.

Appendix III: Comments from the Department of Defense

Appendix IV: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the contact named above, Kimberly Seay, Assistant Director; LaToya King; Joanne Landesman; Lisa McMillen; Connie Sawyer, Jr.; Michael Silver; Amie Steele; and Michael Willems made key contributions to this report.