This document seeks to help the Air Force develop a strategy for managing supply chain risks during sustainment. In it, the authors review literature on supply chain risk management (SCRM), examine current Air Force practices for and guidance on SCRM, describe emerging commercial best practices for SCRM, and discuss the implications for Air Force SCRM organization and practices.

Identifying and Managing Air Force Sustainment Supply Chain Risks

Nancy Young Moore, Elvira N. Loredo

ResearchPublished Jul 2, 2013

In recent years, the Air Force and its suppliers have adopted a variety of practices that have improved efficiency and effectiveness but have also made supply chains more brittle and increased risks of supply disruption. This document seeks to help the Air Force develop a strategy for managing supply chain risks during sustainment. In it, the authors review literature on supply chain risk management (SCRM), examine current Air Force practices for and guidance on SCRM, and describe emerging commercial best practices for SCRM. They find that many supply chain risks are not considered directly within the Air Force sustainment community and that, while others are acknowledged, there is little or no strategy in place to mitigate them. They recommend that the Air Force establish an enterprise-level organization to proactively manage supply chain risks.

Key Findings

Best Practices for Supply Chain Risk Management

  • Proactive supply chain risk management requires the development of guidance and policies, practices, processes, and organizations for identifying and managing supply chain risks.
  • Knowledge of the upstream supply base and requiring suppliers to commit to a time to recovery in the event of a disruption are key to successfully managing supply chain risks.

Many Supply Chain Risks Are Not Addressed by the Air Force Sustainment Community

  • Air Force and Department of Defense (DoD) guidance on supply chain risk identification and mitigation address some, but not all, of the risks identified in the business literature.
  • The Air Force commodity councils have a process for managing risk, but it is geared toward managing contract risk, not supply chain risk.
  • One prominent category of supply chain risks identified in the business literature but not DoD guidance is natural disasters. The Federal Acquisition Regulation's force majeure clause transfers risks associated with natural disasters from suppliers to the Air Force.
  • Interviews with Air Force supply management personnel suggest that they rarely or never consider risks whose investigation would require investment in developing a supply chain risk management plan or risks from force majeure events for which the Federal Acquisition Regulation absolves suppliers.

Recommendations

  • Even if the Air Force cannot change the likelihood of a risk (as is often the case with risks associated with natural disasters or with sole source suppliers), it should take steps to minimize its duration and consequences.
  • The Air Force should establish an enterprise-level supply chain risk management (SCRM) organization. The new organizational structure should provide a mechanism to integrate supplier relationship management and SCRM across the planned Air Force Life Cycle Management Center and Air Force Sustainment Center.

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Document Details

  • Copyright: RAND Corporation
  • Availability: Available
  • Year: 2013
  • Print Format: Paperback
  • Paperback Pages: 120
  • Paperback Price: $32.95
  • Paperback ISBN/EAN: 978-0-8330-7655-7
  • Document Number: DB-649-AF

Citation

RAND Style Manual
Moore, Nancy Young and Elvira N. Loredo, Identifying and Managing Air Force Sustainment Supply Chain Risks, RAND Corporation, DB-649-AF, 2013. As of September 11, 2024: https://www.rand.org/pubs/documented_briefings/DB649.html
Chicago Manual of Style
Moore, Nancy Young and Elvira N. Loredo, Identifying and Managing Air Force Sustainment Supply Chain Risks. Santa Monica, CA: RAND Corporation, 2013. https://www.rand.org/pubs/documented_briefings/DB649.html. Also available in print form.
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The research described in this report was sponsored by the United States Air Force and conducted by RAND Project AIR FORCE.

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