Military parts replenishment

May 1, 2014
Aftermarket parts suppliers and distributors struggle daily with forecasting and inventory management challenges. But imagine supplying replacement parts for a vehicle fleet spread across the entire globe where vehicles are frequently damaged by gunfire, artillery and roadside bombs.

Aftermarket parts suppliers and distributors struggle daily with forecasting and inventory management challenges. But imagine if you had to supply replacement parts for a vehicle fleet spread across the entire globe, and where vehicles weren't just subject to the wear and tear of daily use, but also frequently damaged by gunfire, artillery and roadside bombs?

Those are the challenges the U.S. military faces in supporting its own vast fleet of vehicles. In 2009, the Department of Defense selected Lockheed Martin as the primary contractor for its Fleet Automotive Support Initiative - Global (FASI-G) program. Lockheed is responsible for shipping more than 1,600 automotive part types (National Stock Numbers, or NSNs) to more than 10,000 locations.

As part of the program, Lockheed Martin opened a Global Sustainment Command Center in Columbus, Ohio, where staff provide 24/7 support and oversee inventory forecasting, order management and distribution, as well as supply chain tracking. Lockheed manages the parts of 400 different suppliers as part of the 10-year contract with the Defense Logistics Agency (DLA) Land and Maritime Inventory Control Point in Columbus.

The FASI-G program covers support for land-based vehicle sustainment of all tactical and non-tactical U.S. military land-based vehicles. Primarily, these are armored Humvees, but also include trailers, tractors, semi tractors and other vehicles.

Lockheed supports Army depots, where staff repair and maintain ground vehicles. "It's a worldwide support contract, so any military post could be ordering these parts," says Janet Gohman, director of the global supply chain service group at Lockheed Martin.

End users place orders that go through the DLA's IT enterprise systems, and are then transferred to Lockheed's command center. The orders are processed through Lockheed's supply chain management system, which places an order to a manufacturer or distributor in the network to provide the part.

"The parts are stored in our warehouse, and our supply chain management system does a demand forecast for us, so we know how much we need to keep in the warehouse to meet the expected demand," Gohman says. "We ship out the parts to either a depot or a military installation. In the latter case, it would first go to one of the military's distribution centers on the East or West Coast.

Forecasting is one of the primary challenges for Lockheed. "We have to be attuned to the operations (op) tempo, and adjust according to that," Gohman says. "If we know we're pulling out of Afghanistan, our demand for a lot of these parts will come way down. If training dollars are not available, then vehicles won't be used as much, and demand is reduced. We can't just look at previous demand for an NSN."

The supply chain management system Lockheed uses allows the company to evaluate NSNs according to demand fluctuations caused by these operational changes. The process is somewhat complicated by the fact that the military can't provide specific information about the number of vehicles deployed and their specific location for security reasons.

"The DLA does not give us detailed vehicle information, but they do give us a macro look at what demand might be in the future, and the type of things that are happening that would increase or decrease the vehicle fleet," Gohman says.

Actually moving the parts is fairly straightforward once the forecast has been set and orders start coming in. Once the part hits a military facility or distribution center, Lockheed no longer has any visibility because the end customer has taken custody of the part.

"Within our own supply chain, though, we have total access visibility of all parts. We know if it's in a warehouse, what truck it's on, and where it is being delivered," Gohman says.

Lockheed also supports other programs. For example, the company manages 96,000 different NSNs for the Air Force air logistics centers, including everything from rivets to complete assemblies.

"We have 300,000 different bin locations where we put in common hardware," Gohman says. "That resides on the floor where the mechanics have immediate access to the parts. Of those, 18,000 NSNs are bought commercially through Lockheed Martin via long-term agreements with 13 suppliers; the other 70,000 are provided by the DLA, but they still go through our supply chain management system for ordering."

Lockheed manages all of the demand planning and forecasting, and is responsible for the fill rates of all the bins. "If a bin goes empty, we're responsible for filling it within 24 hours," Gohman says.

Each bin has an authorized quantity level based on past demand and planned work. Material handlers check the bin levels twice each week. When the bins reach a predetermined level, they are scanned with a bar code scanner to initiate a refill order. "Nobody ever touches a piece of paper or makes an entry into a system," Gohman says.

Gohman, a veteran herself, says that the Lockheed staff members working on the FASI-G program see their role as more than just fulfilling parts.

"The bottom line is that our end users mean everything to us," Gohman says. "Almost all of us here have a military background, and the need to have the right part at the right place for the right price drives our entire team. It's more than a job for us, it's our lifestyle. Being able to support our soldiers and airmen is such a privilege. I can't imagine doing anything else, because of what we get to do and who are customer is."

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