This issue paper identifies problems in the DoD distribution system, describes industry's practices, and suggests what DoD should do to improve its operation. The underlying causes of the distribution problems are many and complicated, but they fall into four general categories: structural issues, user reactions, unresponsiveness to change, and low standards. On the other hand, commercial organizations have had tremendous success improving their distribution processes through a combination of organizational and technological change. Industry differs from DoD in that it operates to make a profit, but it also differs because its distribution system focuses on a single goal--a satisfied customer. The authors conclude by stating that the DoD should: (1) study industry distribution models carefully and selectively use or adapt them; (2) reengineer the system to determine which steps can be eliminated, automated, or combined, which technologies are needed, and which of those offer the largest gain; and (3) establish high standards of performance for each distribution element and measure the performance of each element against the standard.