First of all, stop reading if you don't believe this statement:  "The United States Air Force is the finest air force in the world and performs its broad missions outstandingly, no matter what." Keep reading if you believe this statement:  "The United States Air Force must cut wasteful spending." In this case, let's talk about "logistics", a major segment of the supply chain.

What is the definition of "wasteful spending"?  Seriously, that's part of the challenge.  There are two types in my experience.  One, spending money on something you don't need.  Two, spending too much for something you do need.

What do you need?  More Joint Strike Fighters or more cybersecurity analysts or more x, y, z.  That decision depends on the National Military Strategy, the type and amounts of appropriations from Congress (the color of money), and the current priorities of the Administration - those things are driven by what we want to do and what we think the world wants to do to us.  By the way, new weapon system acquisition and personnel costs are the big boys and nearly always start with a "$B".

So you decided what you need (rather it was decided for you).  Now, what should it cost?  Again, not all that easy and there are a couple reasons. First, by being the most incredibly powerful military force in the history of the planet you need a lot of bleeding-edge technology stuff that is pricy and without precedent for acquisition.  Two, our well-meaning government has imposed a seemingly never-ending collection of special rules on what the Air Force buys, and how and from whom.  Third, especially if we go down the path that the Air Force calls weapon system sustainment, there is a tremendous amount of complexity in the determination of the cost for such things as parts needed for weapon system and subsystem repair actions.  Those costs are super tricky because of factors like:

"¢ Repair actions and related repair parts forecasting: High-tech weapon systems and equipment with highly variable break rates make it somewhere between art and rocket science to accurately predict these sustainment requirements; hence, we can't always establish the most cost-effective purchasing actions.

"¢ Aging weapon systems: If you wanted to buy a couple dozen brake disks from GM for your fleet of 1965 Chevy Chevelles, how long do think it would take them to set up the shop equipment and process to make them and what do you think they would cost?

"¢ Hundreds of archaic, stove-piped, typically unique "legacy" data systems: Due to too many reasons to list, some reasonable, the Air Force supply chain looks like a city of millions that was built with no zoning, complex and conflicting standards, and a bunch of groups that had their own very specific ideas about how they wanted to live.

"¢ Bad data: Take all those legacy data systems, a bazillion interfaces, and inadequate appreciation and investment, and even decent processes are severely degraded.

To get past all these factors that drive wasteful spending and can also hurt mission readiness and execution, the top companies and a significant portion of the Department of Defense implemented, or partially implemented, new information technologies and processes, such as enterprise resource planning.

The Air Force embarked on a huge program a few years ago, called Enterprise Combat Support System (ECSS) to implement an ERP that would have "subsumed" over 250 major legacy data systems affecting more than 250,000 users and cost more than $5bn and about seven years to implement completely.  DoD and the Air Force pulled the plug on ECSS last year.  Based on my personal experience working in/on the Air Force supply chain for 26 years and working inside this program for over four years on the contractor side, here's my take on why that happened:

"¢ Leadership - Magnitude of program made the SECAF the lowest level of Air Force leadership that would have full directive authority over all the organizations impacted by the program, but it was largely delegated to the one-star level based upon the perception that this was a "logistics" system - see Scope.

"¢ Scope - Too big for Air Force to assimilate, based on complexity, number of systems, number of impacted organizations, and pace of implementation.

"¢ Acquisition Strategy - Firm Fixed Price (FFP) acquisition was too inflexible for the immaturity of the program requirements - drove an over-administrated, adversarial environment.

"¢ Program Management - Major requirements changes, unable to advocate business case,  politically influenced decisions, contractor conflicts of interest - see Leadership.

"¢ IT Infrastructure - ECSS was the largest business system implementation, by far, the Air Force had ever attempted to establish application development environments for and put on its network. Despite heroic efforts to anticipate, find and fix bottlenecks, ECSS exposed numerous problems that didn't look like they could be overcome within the confines of the program's cost and schedule.

"¢ Data - Like infrastructure, ECSS exposed a tremendous amount of data inaccuracy and unavailability that, despite heroic efforts, were not fixable within the confines of the program's cost and schedule.

"¢ Change Management - The Air Force was not ready for this change and couldn't get ready in time for program survival - there wasn't sufficient understanding of the costs, benefits and process for implementing a large-scale ERP. Here's my favorite example:  everybody knows what ECSS was projected to cost: over $5bn; want to know what the business case analysis conservatively projected as the benefits?  I saw (and worked on) analyses that showed 3X to 4X ROI - see all other factors.

Darn.  Now what?

What supply chain issues does the USAF now face, and how can it meet today's challenges now that ECSS is defunct?

Unfortunately, the Air Force faces even greater challenges for its supply chain and its ability to identify and stop wasteful spending today, than it did 5 years ago.  Don't get me wrong, the Air Force has instituted numerous improvements during that time, but major work on those 250 legacy data systems was largely halted (put on "life support") based upon the promise (and cost) of ECSS. Its weapons system average age has continued to go up and the OPSTEMPO required by combat missions in the Middle East has taken its toll.

Organizationally, the Air Force took a major step last year by significantly reorganizing Air Force Materiel Command (the brains and guts of the supply chain).  Most significantly, it established the Air Force Life Cycle Management Center (AFLCMC) and the Air Force Sustainment Center (AFSC), two of the now five centers.

In essence, AFLCMC is the owner of weapon and other systems and their designed capabilities throughout their life cycle, which in the case of the B-52 looks like about 80 years - again, think of the car analogy.

AFSC, as the name implies, gets the responsibility for sustaining all those systems using facilities (logistics complexes/depots), equipment, parts, data systems, processes, procedures and people.

Instead of having a two-star general at each of the three Air Logistics Complexes (in Utah, Oklahoma and Georgia), a three-star general AFSC Commander is now in charge of all three, plus the Aerospace Maintenance and Regeneration Group (AMARG) (in Arizona). Similar consolidations and realignment took place in AFLCMC.

As for son of ECSS - not happening.  The Air Force will have the ECSS-based "blues" for quite awhile.  However, Air Force supply chain problems and associated wasteful spending will not go away without significant changes that go well beyond reorganizations.

Just looking at the system applications pieces of this monster puzzle, you gotta start with mainframes and COBOL.  Stuff that should be in the National Museum of the Air Force, is still chugging away.  It works.  The Air Force can fix and launch jets like nobody else, but it ain't pretty - too much effort, too much risk, and too much waste.

How do you effectively modernize your IT and business processes to meet today's challenges?

"¢ Leadership - Decide what is needed (end state) and set a course (with flexible options over time) - there was nothing wrong with the ECSS vision and its assessment of problems to be fixed and opportunities to be pursued - leaders must lead it, own it, communicate it, prioritize it, measure it, and implement it.

"¢ Scope - Within the overall leadership vision, set the criteria for how to chunk portions of the work that will add up to achieving the vision and the order in which chunks are accomplished, based upon scope factors that include:

- Number, complexity and size of processes/systems (from data requirements to system interfaces to legal/policy compliance).

- Mission impact of processes/systems (logistics systems, data and personnel launch jets, target drones, ready missiles, and save lives).

- Costs versus benefits of the chunks (including integration requirements over time).

- Change management difficulty (from users, to leaders, to incumbent contractors, to Congress).

- Timing relative to other affected processes/systems/organizations (timing isn't everything, but it's a big thing).

"¢ Acquisition Strategy - FFP is the most popular contract flavor, but it is not the universal answer - if the Air Force can develop and abide by a very specific, measurable and relatively unchanging set of requirements (hopefully through SDDP), FFP can be at the core of the strategy, but industry should still serve as the system integrator and still needs some flexibility to be really effective.

"¢ Program Management - Less is more, in the sense that program management cannot become bureaucratic - strictly using "waterfall" methodologies for major process reengineering and associated IT development will strangle the best program - the entire government/industry team must clearly see that they are in the same boat (and they're running out of water, nobody can swim, sharks are following, a storm is coming, "¦ everyone at the the oars).

"¢ IT Infrastructure - See Scope - while IT infrastructure still needs continuing improvements, implementing smaller "chunks" will make that process doable through continuous iterations - and this isn't really a technology problem, it's more about collaboration, how to use the technology and the governance of standards, security and performance.

"¢ Data - When ECSS sank (some might say torpedoed), it didn't take all the progress on data management with it - the Air Force learned much about the importance of logistics data and the location of its authoritative sources (no easy task considering the sheer number of systems, interfaces and transactions) - those efforts have continued on many fronts at AFMC and they will help provide better implementation of any chosen course of action.

I'd like to say that the Air Force learned major lessons regarding the true nature, scope and level of commitment needed for successful change management of major processes and systems, but it's not yet proven. For example, I Googled "Air Force ECSS Lessons Learned" and found nothing definitive published via the Air Force; just the Senate hearings earlier in the year.

Source: ARRAY Information Technology


Keywords: supply chain management, value chain, supply chain solutions, supply chain planning, Air Force logistics & supply chain, defense logistics, supply chain management IT