by clicking the arrows at the side of the page, or by using the toolbar.
by clicking anywhere on the page.
by dragging the page around when zoomed in.
by clicking anywhere on the page when zoomed in.
web sites or send emails by clicking on hyperlinks.
Email this page to a friend
Search this issue
Index - jump to page or section
Archive - view past issues
Maritime Logistics Community News : April 2014
29 MARITIME LOGISTICS COMMUNITY NEWSLETTER 2014 separate entities with their own goals, processes, innovations, KPI's and duty statements that are in complete isolation from one another. Above this is the acquisition process that Defence and in turn DMO adheres to. Defence has a Value for Money (VFM) policy whilst at the same time, a requirement in supporting local businesses and Industry in the supply of materiel to Defence. The result is that there is no strategic partnership developed between both internal logistic branches of Defence, or Defence and their suppliers. This is due in part that the Request for Quote (RFQ) or Request for Tender (RFT) is often given to the lowest bidder in order to achieve VFM. These relationships are rarely long term, and are often redistributed after periodical review. As Fawcett, Ellram, Ogden (2007) outline, collaboration between supplier and customer is paramount in achieving collaborative planning, forecasting and replenishment (CPFR). They further outline that CFPR is the ability to share among members of the entire supply chain, forecasts, promotion plans, and other related information in an effort to reduce inventories, improve availability and enable automatic replenishment. Whilst Defence have a number of organisations involved in the supply of materiel such as DMO, LDA, SPO, IPO and JLC, how do we still encounter Nil Stock Global status for items still in use by Defence? Recommendations Clearly there is a break down in the processes outlined above where items still in use by Defence are not available, and often due to this unavailability require long lead times to be delivered, thus affecting the operational capability of certain equipment and platforms. Whilst each organisation has a specific role within the SC, there is a requirement for interrelationships to ensure that the seven rights of fulfilment are obtained. This could be perceived as a relatively easy concept, streamlining the whole process to one or a collective of interwoven CFPR steps. However; Defence utilise an extraordinary level of materiel within its SC, with all materiel being managed and supported by Capability Managers (CM) and Australian Defence Force Logistics Managers (ADFLM). These CMs and ADFLMs are responsible for the effective management of numerous items, often numbering into the hundreds. How can we expect one person to manage hundreds of items and in turn manage customer and supplier relationships, often spread across multiple suppliers, whilst at the same time achieve the seven rights of fulfilment at every turn? To simplify this, it would be beneficial for Defence to enter into a strategic alliance with a number of large suppliers of general, generic and specific materiel that Defence utilise on a continual basis. The advantages of this are three-fold. Firstly, this cuts down on the number of CMs and ADFLMs required to manage materiel throughout the ADF. These personnel can be drawn down to a manageable few whose focus switches from materiel management, to supplier and customer relationship management. Secondly, the strategic alliance reduces the amount of inventory required to be held within the DSC and JLC network, thus reducing operating costs and manpower costs by switching to a Just In Time (JIT) principle and putting the onus on the supplier to hold inventory. Lastly and most importantly, the alliance will enable greater collaboration and CFPR not only between internal Defence Agencies, but between Defence and suppliers also. Whilst Defence are after VFM in all operating costs, the chosen suppliers will also be looking at innovative ways to reduce operating costs to maximise profit. As the ADF operates on a no win, no loss modus operandi, an alliance creates the ability to enable process improvement, problem solving, training opportunities and transformational innovation along each step of the SC, and ultimately achieving the optimal level of CFPR. This ultimately enables VFM at every turn whilst ensuring that stock is available when required. Performance Management Performance measurement is interwoven between customer relationship management (CRM), strategic intent and overall performance. Fawcett, Figure 2. Continued next page ...