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Velocity Management: The Business Paradigm that has Transformed U.S. Army Logistics by John Dumond

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Velocity Management: The Business Paradigm that has Transformed U.S. Army Logistics John Dumond
Language: English
Page: 68
Format: pdf
ISBN: 0833027735, 9780585388779
Publisher:

From the Publisher

t the outset of the 1990s, customers of the U.S. Army's logisticssystem could justifiably complain about many aspects of itsperformance. The system was huge, moving massive amounts ofmaterials and supplies and employing thousands of Army person-neland outside contractors. It was also unreliable, inefficient, unre-sponsiveto changing customer needs, and expensive. Theseproblems persisted despite repeated efforts to remedy them. Forthis reason, successfully reforming the Army's logistics system-much less achieving the "transformation" that many called for-required a fundamental shift in approach to how the Armythought about logistics and how it thought about change.In 1995, the Army's Velocity Management (VM) initiativebrought a new way of doing business to U.S. Army logistics. As theterm "Velocity Management" implies, this initiative has focused onimproving the speed and accuracy with which materials and infor-mationflow from providers to users. Through improved velocityand accuracy, it reduces the need for massive stockpiles of logisticsresources.Since 1995, the VM initiative has succeeded beyond allexpectation. Key Army logistics processes have improved dramat-icallyon the three dimensions of performance: time, quality, andcost. Today a high-velocity, streamlined order fulfillment processdelivers repair parts in half the time it took to deliver them justthree years earlier. The repair process is faster in turn, andimproved inventory management means that customers can haveready access to a broader array of items. The accompanying finan-cialsystem is also less cumbersome. The Army has propagatedthese improvements throughout its facilities and installations, bothwithin the United States and abroad.One key to the success of the VM initiative is the continuedinvolvement of a determined coalition of senior Army leaders.Another is the adoption of a powerful process improvementmethodology called D-M-I: Define-Measure-Improve. To imple-mentVM, teams of experts define, measure, and improve logisticsprocesses continuously. As a result of their efforts, the customersof the logistics system-Army units in garrison and deployedworldwide-get what they need, when they need it, at affordableexpense.This report tells the story of VM's ongoing success: the moti-vations,methodology, and management structure behind theinitiative; the process changes that led to rapid and continuousimprovement; and the steps that were taken to develop and insti-tutionalizethe capabilities for achieving and sustaining processimprovement. The contents of this report have been briefedwidely among the senior leadership of the Army and of theDepartment of Defense more broadly. It will be of interest to anyorganization, public or private, seeking dramatic performanceimprovement.The Velocity Management approach to process improvementwas developed through research sponsored by the U.S. ArmyDeputy Chief of Staff for Logistics. U.S.RAND Arroyo Centerresearchers in the Military Logistics Program have providedanalytic support and technical assistance to the Army's implemen-tationefforts while continuing to extend the VM concept. RANDhas also conducted research to adapt the Velocity Managementconcept to help improve the logistics system of the U.S. MarineCorps, in support of its logistics reforms (see Robbins et al., 1998,and Fricker and Robbins, 2000). RAND is conducting related stud-iesin support of the Strategic Distribution Management Initiativefor the Defense Logistics Agency and the U.S. TransportationCommand.The Arroyo Center is a federally funded research and devel-opmentcenter that is sponsored by the U.S. Army. For more information on RAND Arroyo Center, contact theDirector of Operations (tel 310-393-0411, extension 6500; FAX310-451-6952; e-mail donnab@rand.

About the Author

The authors are RAND analysts working in the Arroyo Center, a federally funded research and development center sponsored by the United States Army. John Dumond (Ph.D., Business/Operations Management, Indiana University), Marygail Brauner (Ph.D., Electrical Engineering/Operations Research, University of California, Los Angeles), John Folkeson (Ph.D., Business/Production Management, University of Houston), and Kenneth Girardini (Ph.D., Electrical Engineering, University of California, Los Angeles) are senior operations research analysts. Rick Eden (Ph.D., English Language and Literature, University of California, Los Angeles) is a senior policy analyst. Donna Keyser (Ph.D., Political Science, Yale University; M.B.A., Columbia Business School) is a communications analyst. Ellen Pint (Ph.D., Business/Economic Analysis and Policy, Stanford University) is a senior economist. Mark Wang (Sc.D., Physics, Massachusetts Institute of Technology) is a physical scientist. Within the Arroyo Center, John Dumond directs the Military Logistics Program and Rick Eden serves as his associate director.