Air University Review, May-June 1968
Lieutenant General Earl C. Hedlund
The Defense Supply Agency, which observed its sixth anniversary in October 1967, is one of several organizational innovations that developed as a result of new techniques in management and new hardware for data processing. These improvements included the Federal Catalog System, which made it possible to identify items by a standard numbering system; the high-speed computer, which has the capability to process data rapidly, perform numerous supply management calculations at frequent intervals, and summarize the results; and the high-speed data communications network, which affords an opportunity to centralize supply management operations. Such developments permitted reexamination of earlier military logistics systems.
Conceived in this environment, the Defense Supply Agency (DSA) had two objectives set forth in its charter: first, to insure effective and timely supply support to the operating forces in mobilization, war, other national emergencies, and in peacetime; and second, to provide this support at the lowest feasible cost to the taxpayer. These objectives, in the order stated, govern all DSA operations and are the criteria against which the agency’s performance is measured.
The mission of the Defense Supply Agency falls into three general areas: it is the wholesale source of designated common supplies for the entire Department of Defense; it operates a consolidated contract administration service for all military departments and the National Aeronautics and Space Administration (NASA); and it administers certain common logistic services and programs.
In the field of supply DSA represents a consolidation of wholesale supply
functions—procurement, warehousing, and distribution—in the common-use areas
of food, clothing, fuel, medical, industrial, construction, electronic, and
general supplies. The agency has a work force of over 57,000 civilian employees,
who were transferred for the most part from the military departments with their
missions, and more than 1150 assigned military personnel of the Army, Navy, Air
Force, and Marine Corps. DSA manages an inventory of about 1.7 million items
valued at $2.9 billion,
supporting annual “sales” (issues) totaling $1.9 billion prior to
DSA’s supply management role is primarily that of manager of secondary items, including repair parts and consumer supplies, in contrast to the major end items of weapons and equipment managed by the military services. It supplies basic materials and great numbers of repair parts and bits and pieces used in the operation and maintenance of service managed weapons and equipment.
It is important to note that the span of functions DSA performs for its assigned items is somewhat narrower than those traditionally performed by the military departments. The services retain control of qualitative requirements for items managed by DSA. They have responsibility for research and development and for the preparation and maintenance of specifications for all DSA items. They retain control over basic quantitative requirements through prescribed tables of allowances, load lists, and the like. They also compute estimated requirements for mobilization reserves and special programs. DSA computes replenishment requirements for wholesale stocks; decides how much to buy, how much to keep in wholesale stock, how best to distribute supplies; and ensures that the required item is available to the military service retail supply manager at the time the customer needs it.
The present DSA system has maintained or exceeded the high standards of
supply effectiveness established by the military departments while continuing
to reduce inventory investment and operating costs. The benefits of
Defense-wide integrated management have been attained with minimum disruption
of the services’ logistical systems. DSA has focused management attention on a
segment of supply that had often been neglected and has applied to it the most
advanced management techniques and mechanized equipment at our disposal.
Finally, DSA has ensured that total Defense assets can be applied to the most
urgent immediate need, regardless of the purpose for which they were procured.
There have been a number of examples of such action. Faced with a shortage of
tropical combat boots, tropical combat uniforms, and tentage for the forces in
DSA’s supply management
functions are carried out at six
The distribution system that DSA employs to move supplies from producer to
user consists of seven principal and four specialized depots. The principal
depots are located at
In addition to its responsibilities for management of common supplies, DSA has the mission of administering several DOD-wide logistics service programs. Among these are the Federal Catalog, Materiel Utilization, Military Standard Data or “MILs” Systems, and Coordinated Procurement.
The Federal Catalog was a responsibility of the former
Retention of older items in the inventory has also reduced the dollar value
of materiel utilization in the interservice
utilization program. The services have found that they could still use many
items declared excess in previous years, and they have therefore not released
them. DOD reutilization, much of it effected through the DSA master computer at
The
The Defense Documentation Center (DDC) was established as part of DSA in
November 1963, with the Armed Forces Technical Information Agency as its
nucleus. Located with DSA Headquarters in
In addition to services identified with specific DSA field activities, the agency has been designated as a focal point having responsibility for administering Defense-wide coordination of certain standard logistic data systems used by all the services: namely, Military Standard Requisitioning and Issue Procedures (MILSTRIP), Military Standard Transportation and Movement Procedures (MILSTAMP), Military Standard Contract Administration Services Procedures (MILSCAP), Military Standard Transaction Reporting and Accounting Procedures (MILSTRAP), and Military Supply and Transportation Evaluation Procedures (MILSTEP).
DSA is also developing three major computerized management systems for internal use within the agency: Mechanization of Warehousing and Shipment Processing (MOWASP), designed to automate the procedures and transportation of the DSA depot distribution activities; Standard Automated Materiel Management Systems (SAMMS), to automate DSA supply management; and Mechanization of Contract Administration Services (MOCAS), to automate the contract administration function. In support of these programs, DSA’s Data Systems Automation Office is designing, developing, programming, and installing data systems based on functional requirements and is delivering detailed computer programs with appropriate documentation to the field commands on a preplanned schedule of implementation.
The third major aspect of the DSA mission involves the operation of
consolidated field Defense Contract Administration Services (DCAS) for most
Defense contracts and for NASA. Organized in 1965, the DCAS organization
consists of a headquarters staff located in the DSA Headquarters; eleven
Regions with offices at
As a general rule, prime contracts for major weapon systems remain under the cognizance of the military service having dominant interest. Many of the subcontracts performed in support of the major weapon systems are, however, administered by the regional offices of DCAS. Other areas not included under DCAS cognizance are construction contracts under the Navy Facilities and Engineering Command and the Army Corps of Engineers, and shipbuilding contracts administered by the Navy Ship Systems Command.
One of the most important features of the DCAS mission, and one of special
interest to the Air Force, is the responsibility for insuring delivery of
military materiel of specified quality. The DCAS organization is responsible
for the inspection and acceptance of many major items of military equipment and
most of the repair parts and supplies required to support them. To accomplish
this mission a total of almost 10,000 quality assurance personnel are assigned
to the eleven DCAS Regions throughout the
Another mission of particular interest is the provision of technical management services by personnel of the DCAS Systems Support Program. On contracts related to systems of high national priority and of special interest to the military services, the Systems Support Program provides a focal point within the DCAS organization where the program manager can obtain engineering information, evaluations, and recommendations. The Systems Support personnel are a management group oriented to production engineering, with the capability to perform a wide variety of engineering tasks.
At the time DSA assumed the contract administration services mission, the importance of this function and the attention given it within the Air Force were recognized. The Air Force had an outstanding organization and an effective system in the contract management area. DSA has noted the fine esprit of the Air Force people in this field and their excellent career development and training programs. DSA likewise recognizes the importance to the services of the proper performance of this function and is doing its best to establish and maintain the same level of excellence that has prevailed in the Air Force. To this end, in planning for DCAS, DSA borrowed liberally from the Air Force system.
Although DSA is not organized around weapon systems in the usual sense,
nevertheless it is the source of many items that are vital to the operational
readiness of virtually every weapon system. Also, through its Weapons System
Support Program, DSA does provide certain special management attention to those
DSA items that are identified with designated weapon systems. The military
services designate weapon systems for inclusion in the DSA support program, and
then a distinctive DSA weapon system designator or code identification is
assigned. The military services then identify DSA-managed items supporting the
selected systems to the responsible
Special data included in DSA’s record of weapon system support items permit special management emphasis to be given to these items. The program has the following distinctive features:
· All weapon systems support items are centrally managed and stocked in the DSA distribution system.
· A supply management review of weapon support items is made at least every 90 days. From this frequent review DSA can pick up even minor changes in usage trends and can quickly adjust procurement quantities to match.
· Weapon systems support items are given priority in funding and procurement and are “red tagged” to expedite procurement actions.
· Special emphasis is placed on reducing administrative and procurement lead times for these items.
Since the primary purpose of a weapon systems support program is responsiveness, DSA strives to maintain a high degree of readiness to react to demands from the operating forces. The current stock availability picture shows a total of 194,354 DSA items supporting 19 weapon systems; of these, 187,679 items have stock on hand, for an availability ratio of 96.6 percent.
DSA has long been concerned about its capability to support emergency and
contingency requirements of the services. Mobilization reserve stockage deficiencies existed at
the time the agency was established, and the financing of additional reserves
since that time had been only nominal. Shortly after the buildup in
From this description of DSA’s
mission, it is apparent that the agency’s workload in support of Southeast Asia
would increase roughly in proportion to the buildup of
FY FY FY Planned
Stock Fund Operations 1965 1966 1967 FY 1968
Sales (billions) $1.9 $ 2.9 $4.0 $ 4.0
Obligations (billions) 1.8 4.2 4.3 3.5
On order, EOP (billions) 0.5 1.9 1.5 1.2Requisition & Tonnage
Handled
Reqns processed (millions) 15.9 20.0 20.4 21.6
Tons shipped (thousands) 1575 2385 2698 2062
Tons received (thousands) 1404 2567 3241 2052
Despite this tremendous increase in workload, supply effectiveness measured in terms of stock availability has held up fairly well. It declined from an average of 91.4 percent in fiscal year 1965 to 87.8 percent in FY 1966 and 86.5 percent in FY 1967, but it is currently averaging about 90 percent. Both the on-time fill rate and the stock availability rate for the past two years reflect repeated large-scale increases in demands on the system and inability to overcome the long procurement lead time in receiving materiel into the system to satisfy these demands.
When the Vietnam war started, DSA’s main problem was in clothing, but this situation has been overcome. DSA’s peacetime stock levels and available mobilization reserves simply were not adequate to cope with the sharp surge in demand in the face of the fairly long procurement lead times applicable to this commodity. While DSA had to ration issues to nonpriority activities, we were able to keep up with the essential needs of deployed units and recruit centers.
Faced with long lead times and, in the case of clothing, an industry already working at maximum capacity, DSA took extraordinary measures to overcome its supply difficulties. Deliveries from existing contracts were accelerated wherever possible. Procurement specialists sought out new suppliers of critical items in order to increase the industrial base.
DSA also attempted the substitution of commercially available items for long-lead time military items wherever feasible. It attempted to relax noncritical specifications in order to facilitate manufacture and provided industry with advance procurement planning information by publishing forecasts of requirements.
In spite of these efforts DSA had continuing difficulty in certain commodity areas, notably clothing, in attracting suppliers with sufficient production capacity to meet its needs. The booming civilian economy made it extremely hard to place orders by use of normal procurement methods. When all other efforts failed, the agency resorted to the use of rated/directed orders as authorized by the Defense Materials Production Act, to require capable but unwilling manufacturers to fulfill its requirements. Fortunately these actions have been successful in broadening the industrial base and correcting support difficulties.
Another problem is in applying funds to procurements in a balanced way
across the commodities board so that DSA can effectively support service
requirements. While it is understandable that the rapid deployment of large
numbers of troops to foreign areas will result in logistical upheavals, the
One of the findings made by a DSA team visiting
In the span of a half decade, DSA has knit together almost 60,000 military and civilian personnel into a highly responsive logistic organization, which has demonstrated its worth under the severest tests of the Vietnam war. Even in the course of an accelerated buildup of military forces, DSA continues to make progress toward its secondary goal of reducing costs through integrated management. However, today more than ever before the principal focus of the agency’s effort is on giving effective support to the armed forces, wherever deployed. In this effort DSA feels that its performance has earned respect within the Defense establishment.
Defense Supply Agency
Lieutenant General Earl Clifford Hedlund
(Ph.D.,
Disclaimer
The conclusions and opinions expressed in this
document are those of the author cultivated in the freedom of expression,
academic environment of
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