By John Dumond
Speed administration brings a brand new approach of doing company to U.S. military logistics, with a renewed specialize in the military patron and a strong procedure for strategy development that cuts throughout 3 severe functionality dimensions: time, caliber and value. The target of pace administration is to lessen the necessity for large logistics assets by way of expanding the rate and accuracy with which fabrics and data are introduced. Key logistics procedures are outlined, measured, and enhanced, continually, so customers--army devices in garrison and deployed worldwide--get what they wish, after they want it and at minimum expense.
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Additional resources for Velocity Management: The Business Paradigm that has Transformed U.S. Army Logistics
Other useful metrics of inventory investment are the dollar value of the reorder point (ROP, the inventory level at which replenishment is initiated) and dollar value of inventory greater than the RO (inventory above the RO can occur when unanticipated customer returns occur). • Transition costs: Periodically, inventory levels need to be adjusted to reflect changes in demand patterns or replenishment times. This is the stockage determination process. Transition costs involve up-front investments to increase inventory levels of existing lines or to add new lines.
As with the effort to reduce the Army’s CWTs, the efforts to improve inventory performance have resulted in immediate and dramatic improvements that are continuing. 3M Fill rate (%) 50 40 30 20 10 0 M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A 1997 1998 1999 2000 Potential performance Computed from document histories at one SSA. ● Figure 17 Broader, shallower stocks yield better fill rates for about the same investment steadily in terms of fill rate. Before the improvement effort, the inventory performed very poorly, filling only about 5 percent of its customers’ requests.
Improved Inventory Breadth In considering whether to add or remove an item from the inventory, the new algorithms calculate the tradeoff between improved supply performance and inventory investment. The stocking of inexpensive items permits a performance gain to be achieved with little investment; therefore, the new algorithms significantly increase the breadth of items stocked. Much of the increase occurred in items that cost less than $10. A substantial number of items that cost between $10 and $100 were also added.
Velocity Management: The Business Paradigm that has Transformed U.S. Army Logistics by John Dumond