The Supply Chain Metrics Group
LMARS Support for Pipeline Measurement Performance
Paul Blackwell
Office of the Deputy Assistant Secretary of Defense for
Supply Chain Integration
March12, 2013
0
Agenda
 Supply Chain Metrics Group and Contributing Efforts
 OSD Priorities for Pipeline Measurement
 Supply Chain Metrics Center
 Measurable Supply Chain
Attributes
 “DNA” Chart for each Metric
 Upgrading Supply Chain
Metrics Center
 Way Ahead
Supply Chain Metrics Strategy
• Purpose: Integrate the metrics originating from
several Department-level supply chain metrics
efforts into a comprehensive set of metrics
monitoring the health of the DoD supply chain.
• Objectives:
• Establish a framework of enterprise metrics for managing
with measurements
• Develop definitions, secure data sources, and establish
data collection procedures for selected metrics.
• Expand or enhance metrics as pipeline measurement
improvements are incorporated
• Incorporate enterprise metrics into the OSD supply chain
metrics center along with enhanced analytical and
reporting capabilities.
1
Supply Chain Metrics Group and
Contributing Efforts
Supply Chain Metrics Group
Enable
new
measures
Ongoing Efforts
Validate the
effectiveness of
measures
• Comprehensive Inventory
Management Improvement Plan
TDD
Compliance
• Joint Supply Chain Architecture
• DPO Distribution Management
(Distribution Performance
Reviews)
Collaborate
with related
metrics efforts
Standardize
definitions,
measurements
&computations
LRT
CWT
• Pipeline Measurement
• Strategic Network Optimization
• Business Process Improvements
Integrate into
performance
framework
Ensure
consistent
approaches
2
OSD Priorities for Enhancement of
Pipeline Measurement

Addressing weaknesses identified as supply chain high risks:
 Unmet delivery standards and timelines for cargo shipments
 Incomplete delivery data for surface shipments
 Inadequate RFID to track cargo shipments to and within theater
 Lack of common operating picture for integrated distribution data
 Development of guidance on implementing performance management
 Alignment to enterprise-wide supply chain performance metrics
 Lack of performance measures across the enterprise

Tracking of retrograde of materiel

Retrograde Team Report– Sent to the Acting, USD(AT&L) on April 1,
2012
3
Supply Chain Metrics Center
Supply Chain Metrics Center
Metrics to be incorporated
(S) NMC Rates
(S) Customer Wait Time (CWT)
(L) Order Fulfillment
(C) Procurement Lead Time
(C) Value of Inventory
(C) Excess On-Hand
(C) Excess On-Order
(B) Inventory Turn
(B) Logistics Cost Baseline (LCB)
(D) Denial Rates
(C) Supply Availability
(S) Retrograde Time
(C) NMCS Backorders
(L) Logistics Response Time (LRT)
(S) Repair Turnaround Time
(F) Order Response Time
(N) First Pass Effectiveness
(S) Retrograde Asset WriteOffs
(S) Retrograde Over-Aged
Due-Ins
(C) Demand Forecast Error
(C) Total Supply Chain
Management Costs
(C) Customer Price Change
(DATA SOURCES) LEGEND
(C) Military Services & DLA
(S) Military Services
CWT Tool
LRT Tool
LCB Tool
Strat & SSIR Tools
(B) Working Capital Fund Budgets
Drill down into
Service CWT
records.
Drill down into LMARS
and DLA/TRANSCOM
LRT records.
Drill down
into LCB
records.
Drill down into Component
inventory records
(L) Logistics Metrics Analysis
Reporting System (LMARS)
(N) Navy
(F) Air Force
(D) DLA
Analysis Tools
4
Metrics Structure
DoD Supply Chain Metrics by Measurable Attributes
Attribute/
Outcome
Definition
Currently Collected Metrics
Materiel
Readiness
The ability of the supply chain to
support weapon systems in undertaking
and sustaining their assigned missions
at planned peacetime and wartime
utilization rates
• NMC Rates
• NMCS Backorders
Responsiveness
The ability of the supply chain to
respond to customer materiel requests
according to priority by providing the
right support when it is needed and
where needed
• Customer Wait Time (O
Level)
• Logistics Response
Time
Reliability
The dependability and consistency of
the supply chain providers in delivery of
required material support at a time and
destination specified by the customer
• Denial Rates
• TDD Compliance
• Wholesale Perfect
Order Fulfillment
(DLA)
• Wholesale Supply
Availability
Planning and
Precision
The ability of the supply chain to
accurately anticipate customer
requirements and plan, coordinate and
execute accordingly.
• Excess On-Hand
• Excess On-Order
• Repair Turnaround
Time (D Level)
• Retrograde Time
• Procurement Lead
Time
Cost
The amount of supply chain resources
required to deliver a specific
performance outcome
• Value of Secondary Item
Inventory
• Inventory Segmentation
(No Demand 5 or More
Years) ($)
• Total Supply Chain Cost
(Log Cost Baseline)
Standard
Not Standard
Across DOD
Proposed Additional
Metrics
• Response Time
Effectiveness (e.g.
Air Force Order
Response Time, Navy
First Pass
Effectiveness)
• Demand Forecast
Error /Bias
• Retrograde Over-Aged
Due-Ins
• Lead Time Variance
• Total Supply Chain
Management Costs
• Tiered Inventory Turns
• Price Change
• Retrograde Asset
Write-Offs
5
“DNA” Chart for Each Metric
Customer Wait Time
Official
definition for
metric
Relates
metric to a
supply chain
attribute
Organizational Maintenance (CWTOM)
DEFINITION
A measurement of the total elapsed time
between submission of a customer order
from organizational maintenance and
receipt of that order by organizational
maintenance.
SUPPLY CHAIN Responsiveness: Timely receipt of
ATTRIBUTE
replacement parts by organizational
maintenance is key to reducing the time
to replace failed parts that are causing a
not-mission-capable condition for
weapon systems.
BUSINESS
VALUE
Customer wait time for organizational
maintenance (CWTOM):
• indicates how responsive the DoD
supply chain is from an end user’s
perspective
• links supply chain performance to the
operational availability of weapon
systems as the mean logistics delay
time (MLDT) factor
Business
value of the
metric
Days 45
CWT – FY2012
Military Service Cumulative Year to Date
40
35
30
25
Proposed
SC Metrics
Center
display
DEFINITION IN
POLICY
BUSINESS
RULES
DATA SOURCE
OSD D ATA
REQUIREMENT
GOALS OR
OBJECTIVES
DISPLAY
Proposed definitions were drafted. Upon approval,
definitions for CWTOM , CWT for performance budget
reporting, CWT for depot maintenance, and order response
time will be inserted into DoD 4140.01-M.
Proposed business rule for computing mean CWTOM
excludes the 1% of the observations that represent the
longest fulfillment times, which may be attributable to data
errors and/or extraordinary circumstances.
All Military Services data sources identified.
Military Services submit CWTOM records to SCI on a
monthly basis and will discontinue submission of aggregate
data to DLA Transaction Services for DD2829 report.
FY2012 performance goals: 15.5 days for Army, 15 days
for Navy, and 7.5 days for Air Force.
Supply Chain Metrics Center is being changed to reflect
military service year-to-date performance against goals as
well as monthly performance.
CHALLENGES AND WAY AHEAD
• Revision of Marine Corps submission to consider orders filled locally –
Marines are developing new specifications for collected CWTOM data.
• Revision of Army submission to exclusively measure performance only
against those orders from organizational maintenance – Army is reviewing
use of data from maintenance systems to identify orders..
20
CURRENT METRIC PERFORMANCE
15
10
5
0
Army
Navy
Air Force
Marine Corps
Oct-11
16.9
11.0
6.1
41.5
Nov-11 Dec-11
15.5
15.3
11.7
12.2
5.8
5.8
38.0
37.2
Jan-12
14.9
12.8
5.7
38.5
Feb-12
14.4
12.8
5.8
37.3
Mar-12
13.9
12.8
5.7
32.3
Apr-12
13.7
12.7
5.8
33.5
May-12
13.4
12.9
5.8
Jun-12
13.3
Jul-12
Aug-12
Sep-12
• All Military Services are performing within goal
• There were no negative trends or anomalies in this performance period.
Guidance &
pending
action
Computational
rules
Identifies
data
source(s)
Reporting
procedures
Applicable
goals
Viewing
options
5.8
Source: CWT Tool, outliers omitted.
Note: Army and Marine Corps CWT includes all source of supply, Navy includes Navy source of supply,
and Air Force includes Air Force source of supply.
A single information resource for all metrics related data
6
Logistics Response Time (LRT)
DEFINITION
A measurement of the total elapsed time (in
days) from customer requisition to receipt of
materiel ordered from a DoD organic or
commercial source of supply.
SUPPLY CHAIN
ATTRIBUTE
Responsiveness: Timely receipt of materiel
demanded from wholesale sources of supply
to retail activities and end-use customers is
key to DoD supply chain performance.
BUSINESS
VALUE
This metric:
• indicates how timely the wholesale echelon
of supply and distribution system is
responding to their customers – the largest
segment being retail activities
• links DoD supply chain performance to
negotiated standards for responsiveness
(e.g., TDD Standards)
CIMIP
STATUS OF SCMG ACTIONS
COMPLETED
PENDING
WORKING
FUTURE
DEFINITION IN
POLICY
Definition approved for insertion in draft DoD 4140.01-M.
BUSINESS
RULES
The measurement of LRT is from the date the retail supply
activity requisition is submitted to a DoD or designated
commercial source of supply until the date the requisitioned
materiel is received and posted in the materiel management
system of the requisitioner.
DATA
SOURCE
Logistics Metrics Analysis Reporting System (LMARS)
OSD DATA
REQUIREMENT
DLA Transaction Services submits LMARS records to SCI on a
monthly basis.
GOALS OR
OBJECTIVES
TDD standards are used by supply chain providers to
evaluate their performance in delivering ordered materiel and
do not consider backorder time. However, no consensus exists
on how to measure backorder time.
DISPLAY
Current display shows Total Pipeline Times and CONUS
Segment Times by source of supply, Geographic COCOM, and a
myriad of other options.
CHALLENGES AND WAY AHEAD
• Analyzing alternatives for measuring backorder time and to evaluate
LRT from a customer’s viewpoint versus a provider’s viewpoint.
• Discussing how to handle new LMARS records resulting from BRACdirected transfer of retail supply to DLA at maintenance depots.
CURRENT METRIC PERFORMANCE
There were no negative trends or anomalies in this performance period. 77
TDD Compliance
DEFINITION
SUPPLY CHAIN
ATTRIBUTE
BUSINESS
VALUE
The concept that, within a specified degree of probability,
the logistics system is capable of delivering required
materiel to the customer within a given period of time. As a
metric, it measures the count and percentage of shipments
that meet the time definite delivery (TDD) standards for a
given combatant command and transportation mode. For
this metric, backorder time is excluded.
Reliability: The DoD TDD standards provide delivery
performance target by combatant command, region within
COCOM and transportation mode as dictated by the
customer’s priority.
This metrics quantifies the reliability of the DoD supply
chain in meeting negotiated times when responding to
customer requisitions.
STATUS OF SCMG ACTIONS COMPLETED PENDING WORKING FUTURE
DEFINITION IN
POLICY
To be documented in emerging DoD 4140.01-M
BUSINESS
RULES
U.S. TRANSCOM rules
DATA SOURCE
U. S. TRANSCOM Strategic Distribution
Database
OSD DATA
REQUIREMENT
Monthly submission of DPO JDDE Metric
Executive Dashboard statistics
GOALS OR
OBJECTIVES
85% of deliveries meet TDD standard
DISPLAY
DPO JDDE Metric Executive Dashboard
CHALLENGES AND WAY AHEAD (U.S. TRANSCOM)
•Velocity-focused metric…must be balanced against other
efficiency metrics
•Efficiency improvements may reduce the velocity causing TDD
compliance decrease
•Future initiatives must be analyzed as they may alter future
TDD Standards or compliance goals.
CURRENT METRIC PERFORMANCE
Current global performance is below goal.
8
Customer Wait Time
Organizational Maintenance (CWTOM)
DEFINITION
A measurement of the total elapsed time
between submission of a customer order from
organizational maintenance and receipt of that
order by organizational maintenance.
SUPPLY CHAIN
ATTRIBUTE
Responsiveness: Timely receipt of replacement
parts by organizational maintenance is key to
reducing the time to replace failed parts that are
causing a not-mission-capable condition for
weapon systems.
BUSINESS
VALUE
Customer wait time for organizational
maintenance (CWTOM):
• indicates how responsive the DoD supply
chain is from an end user’s perspective
• links supply chain performance to the
operational availability of weapon systems as
the mean logistics delay time (MLDT) factor
CIMIP
COMPLETED
PENDING WORKING
FUTURE
STATUS OF SCMG ACTIONS
DEFINITION IN Definitions for CWTOM , CWT for performance budget
POLICY
reporting, and CWT for depot maintenance approved for
insertion in draft DoD 4140.01-M.
BUSINESS
Excludes the 1% of the observations that represent the
RULES
longest fulfillment times, which may be attributable to data
errors and/or extraordinary circumstances.
DATA SOURCE All Military Services have established data sources except
Marine Corps.
OSD DATA
Military Services submit CWTOM records to SCI on a
REQUIREMENT monthly basis and will discontinue submission of aggregate
data to DLA Transaction Services for DD2829 report.
GOALS OR
FY2013 performance goals are: 15 days for Army and
OBJECTIVES
Navy, and 7.5 days for Air Force.
DISPLAY
In addition to current display capability, the Supply Chain
Metrics Center is being changed to reflect military service
year-to-date performance against goals as well as monthly
performance. Additional recommendation made by
Components.
CHALLENGES AND WAY AHEAD
Complete Marine effort to provide an accurate and complete process for
collecting its CWT data.
CURRENT METRIC PERFORMANCE
Air Force is performing within their goal, while the Army and Navy are above
their goal.
9
Inventory in Pipeline
Overview
DEFINITION
DEFINITION
SOURCE
SUPPLY CHAIN
ATTRIBUTE
BUSINESS
VALUE
Measures the average value of inventory that
has been shipped but not yet received by the
customer
SNO Working Definition
Investment Cost: The amount of supply chain
resources required to deliver a specific
performance outcome
Average Inventory in Pipeline:
• Allows SNO to estimate a monetary value to
apply to LRT measurements
Millions
Average Inventory Value in Pipeline Across Services
$160
$140
$120
$100
$80
$60
$40
$20
$-
DATA SOURCE
USAF IPG1
USMC IPG1
Navy IPG1
Army IPG1
BUSINESS
RULES (DRAFT)
DATA
REPORTING
ORGANIZATION
LMARS
Inventory in Pipeline is calculated on a quarterly
basis, using data from LMARS. The monthly
reported value of items shipped (filtered by SOS,
customer, Class IX, and IPG) is divided by 90 to
get a daily average value of items shipped, and
then multiplied by the average quarterly LRT.
Logistics Metrics Analysis Reporting System
(LMARS)
LEVEL OF
DETAIL
Data filtered to include only Class IX, DLA
sourced goods, excluding DVDs. LRT numbers
are reported by CONUS/OCONUS and by
Service.
ITEM
POPULATION
LRT and inventory value numbers are reported
by CONUS/OCONUS and by Service.
CALCULATION
Monthly reported value of items shipped is
divided by 90, then multiplied by the average
LRT for the respective month
REVIEW PERIOD
October 2009-present
BASELINE
FY10
CHALLENGES
• None
10
Metrics Center Upgrade
UPGRADING CENTER
A unified platform for:
• Enhanced metric reporting
• Greater spreadsheet integration
• Advanced and flexible data analysis
• Improved information displays & data visualization
• Streamlined user interface
• Simplified customization
• Reduced update cycle
11
Way Ahead
 Update POA&M for responsiveness and reliability metrics as
LMARS is enhanced with pipeline measurement improvements:
 Expand or complete metrics
 Update procedures for collecting and reporting measurements
 Establish or revisit goals for metrics
12