How could the U.S. Army improve its distribution of heavy secondary items that account for a small proportion of the overall items but comprise the majority of the weight shipped? This report analyzes how the Army could leverage the scheduled-truck network of Defense Logistics Agency Distribution hubs to reduce wait time for customers while saving nearly $1 million monthly in shipping costs.

Army Stock Positioning

How Can Distribution Performance Be Improved?

Adam C. Resnick, Jeremy M. Eckhause, James Syme

ResearchPublished Aug 14, 2017

Cover: Army Stock Positioning
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The position of inventoried stock within the U.S. Army's logistical network is inseparably linked to operational success. The ability of the Army to deliver materiel as needed on a timely basis to support training and maintain readiness can ultimately decide mission outcome. In short, should the Army be able to improve delivery of materiel, it will improve its overall performance.

This report focuses on how the Army could improve its distribution of heavy secondary items, such as wheel assemblies, that account for a small proportion of the overall number of items the Army must ship to users but comprise a large proportion of the weight it ships. It discusses how the Army could leverage the scheduled-truck network of Defense Logistics Agency (DLA) distribution hubs to decrease average customer wait time by two to four days, for this class of items. The Army could also save nearly $1 million monthly in shipping costs, through reduced use of truckload and less-than-truckload shipping. It also discusses how changes in source-preference logic in logistics-management programs could ensure those outside the DLA-hub network receive materiel from the most appropriate source.

The research concludes that Army Materiel Command has several opportunities to direct where inventory is located, including when items are newly procured, when they come out of maintenance, and when source-preference programing is devised. Altogether, balancing inventory against regional demand would help item managers reduce requisition wait time and save costs.

Key Takeaways

Army Materiel Command (AMC) Can Leverage the Three-Hub Network That the Defense Logistics Agency (DLA) Has Implemented in the Contiguous United States

  • This network, and the scheduled-truck service that serves it, enables DLA to distribute items to customers quickly on a predictable schedule and at reasonable cost.
  • For items that are positioned at DLA hubs, distribution by scheduled-truck service can be faster than by commercial truck shipment from other sites.
  • AMC could improve responsiveness to customers by positioning items at DLA depots, which, in turn, can issue items by scheduled-truck service.
  • Increasing use of DLA scheduled-truck service would also decrease U.S. Department of Defense costs of distribution.

Recommendations

  • AMC could improve distribution through stock positioning.
  • It has several opportunities to direct where inventory is located, including when items are newly procured and when they come out of maintenance.
  • It could also adjust its source-preference programming so that customers who should get materiel from DLA hubs and on scheduled-truck deliveries do so, and those who should get it elsewhere do so.
  • Balancing inventory against regional demand would help item managers save costs and reduce requisition wait time.

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Resnick, Adam C., Jeremy M. Eckhause, and James Syme, Army Stock Positioning: How Can Distribution Performance Be Improved? Santa Monica, CA: RAND Corporation, 2017. https://www.rand.org/pubs/research_reports/RR1375.html.
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This research was sponsored by Army Materiel Command G-3/4 and conducted by the Forces and Logistics Program within the RAND Arroyo Center.

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