Report
Assessment of the USCENTCOM Medical Distribution Structure
Mar 8, 2010
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For nearly a decade, the U.S. Army has been supporting combat operations in Afghanistan and Iraq. Keeping soldiers supplied in such far-flung locations takes an enormous amount of supplies, none of which is more critical than medical supplies used daily to save soldiers' lives. However, medical supplies are distributed through their own distribution system and not mixed with other things soldiers need such as rations, fuel, ammunition, and so forth. The Army is under pressure to reduce costs wherever it can, and it asked RAND Arroyo Center to find out whether consolidating medical supply distribution could be more efficient and thus less expensive.
Currently, two locations distribute medical supplies to units in Iraq and Afghanistan: one in Qatar and one in Germany (see the map on the following page). Qatar fills about 60 percent of the demand, stocking only the fastest-moving items. It operates seven days a week, using contract and military personnel. Germany both replaces stocks distributed by Qatar and fills the requests for items not stocked in Qatar. The location in Germany operates five days a week and uses local civilians.
Material other than medical supplies is distributed from a depot located in Kuwait, from distribution centers located in the United States (usually from Defense Depot Susquehanna Pennsylvania), and, for some items such as food, directly from vendors. Given that both systems distribute supplies to the same places, the question arises whether it would be more efficient to merge the two systems.
To ascertain whether consolidation would lead to efficiencies, Arroyo researchers evaluated five options:
To assess the options, Arroyo researchers used two criteria: performance and cost. To qualify as a viable alternative to the status quo, an option first had to deliver medical supplies at least as fast as the current system and ideally even faster. To assess performance, researchers evaluated the time required for each segment of the supply process (e.g., time from when an order is sent until it is received; time from order receipt until a release order is cut; time from when an order is cut until the materiel is retrieved from the warehouse; and so forth). The second criterion was whether a given option cost less than the status quo. The cost analysis included transportation costs, any new construction required to implement an option, the effect of a shift in demand toward Afghanistan and away from Iraq, any increase in labor costs, and any costs associated with establishing increased stocks.
Option | Performance | Cost |
---|---|---|
Status quo | — | — |
Increase stocks at Qatar | Better performance | Potentially higher cost |
Stock medical supplies in Kuwait | Worse performance | Likely similar cost, but potential for higher costs |
Ship from the United States | Overall worse performance | - |
Consolidate in Germany | Better performance | More cost-efficient |
The table shows the results of the analysis. Compared with the status quo, two options were assessed as having better performance, lower cost, or both. Two options were assessed as having worse performance or higher costs than the status quo.
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