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Maritime Logistics Community News : Summer 2010
18 NAVY SUPPLY NEWSLETTER SUMMER 2010 BY CAPT S SPARKS, RAN To the naked eye the supply chain may seem fairly straight forward. Unseen, sitting behind the fuel truck, there is a significant framework of industry and ADO elements who work effectively to ensure we get the fuel we need to undertake the tasking required of us. The Joint Fuels and Lubricants Agency is but one of those groups. JFLA Role and Services The JFLA within Maritime Support Division (MSD) of DMO is the ADFLM for POL. JFLA supports a wide range of Defence customers, mainly Service elements. In many cases, customers are also custodians of the bulk fuel that JFLA accounts for. Bulk holdings are managed, maintained, issued and controlled by Defence personnel in Supply ships afloat and at wide range of Bulk Fuel Installations around the country. JFLA is located in both Defence Plaza Sydney and Defence Plaza Melbourne, with an approved establishment of some 28 civilian and Service staff. And Defence is a thirsty customer. In an average year JFLA procures around 480 million litres of fuel (domestic and international), though some 15,000 individual transactions at a cost of $400m AUD. JFLA has three functional business groups which coordinate to provide POL services to the ADF as follows: Engineering and Technical Section JFLA is the Authorised Engineering Organisation (AEO) / Centre of Expertise (COE) responsible for prescribing, revising and interpreting standards relating to ADF POL technical integrity, including prescribing the program which ensures technical integrity is maintained. JFLA is also responsible for: supply chain and maintenance compliance assurance; provision of technical advice relating to contractual matters; technical investigations; desk officer activities associated with the Defence Science and Technology Organisation (DSTO) POL task. Commercial and Business Section The Commercial elements of JFLA include; managing the financial aspects of the agency, such as the budget, recovery activity and accounting aspects of fuel for Defence; undertaking contract management over the standing offers, and maintaining all agreements in place with affiliated agencies prior to their expiration such as the Material Sustainment Agreements (MSAs) with the Services and the Implementing Arrangements (IAs) with foreign governments; providing quality systems and assurance over the operations of JFLA; and monitoring and managing performance. Operations Section The Operations Section is responsible for the delivery of services to the customer. This is undertaken through the implementation of the POL contracts, procurement, distribution and product management for fuel, packaged goods and fuel cards. The Operations Section is also responsible for stock inventory management (including cataloguing and codification) and claims processing. Fuel Procurement Issues The majority of fuel requirements for the ADF are MILSPEC. Greater than 75% of the fuel procured and consumed is F76 Marine Diesel), F44 (Marine Aviation Fuel) and F34 (Military Aviation). All would be considered boutique military application fuels and all are produced as a consequence of a specialised production or distribution process. Higher flashpoint fuels in particular (F44 and F76) not only come at a premium, but also come with lengthy lead time, often in excess of 90 days. This is primarily due to the need for suppliers to source a specific base product (crude) and, in some cases, interrupt their routine refining operations to produce the fuel for Defence. The refining of these kinds of products is usually in competition with the domestic production of Diesel and JET A1 (commercial aviation fuel). We are the single domestic customer for MILSPEC Fuels. The right product and the right time at the right place ... requires good communication and planning if we are to both satisfy the customer and maintain the interest and support of domestic refiners and suppliers. JFLA Sources its fuel and lubricants and Card Services through a range of standing offers nationally. These arrangements have been in place since 2001 and in the majority of cases, these standing offers are with major suppliers. JFLA is currently in the process of retendering all Fuel, Lubricants and Fuel card services and are seeking a 3 year contract term commencing in April 2011. This activity is a sizeable undertaking, particularly noting that this is the first time since 2001, that ADF has approached the market in an open tender approach. The Good Oil on Joint Fuel and Lubricants Agency Fuel always seems to turn up when and where we want it. Be it delivered from a road tanker, a Naval Fuel Installation, a commercial terminal worldwide or through underway replenishment, we take it for granted that it will be available. ADF Fuel Consumption (mega litres) AVCAT 6ML AVGAS 1ML AVTUR + FSII (F-34) 232 ML F-76 (Naval Distillate) 111 ML Diesel Fuel Standard (Land, Marine & Alpine) 25 ML Intermediate Fuel Oil (IFO 180 / 380) 3ML Jet A1 (AVTUR) 35 ML Unleaded Petrol (ULP & E10) 4ML