High Risk: DoD Supply Chain Management

Planning Document

OMB Contact: Richard Allen (202-395-3799)

DoD Owner: Kenneth Krieg (703-697-5770)
Bradley Berkson (703-697-5531)
Alan Estevez (703-604-0098, ext. 106)

DoD Contact: Debra Bennett (703-604-0098 ext. 137)

GAO Contacts: William Solis (202-512-8365)
Richard Payne (757-552-8119)

Scope: Supply Chain Management with a focus on inventory management and distribution.

Overall: Develop a long-range strategic vision and department-wide coordinated approach to improve the inventory management and distribution aspects of DoD’s supply chain so as to provide responsive consistent, and reliable support to the war fighter during peacetime and war.

Short-Term: Produce significant improvements within two years to put DoD on a path to removing the inventory management and distribution aspects of supply chain management from a “high” to a lower risk level.

Focus areas:

1. Asset Visibility:

• Improve Asset Visibility across the department. [Total Asset Visibility is the ability to provide timely and accurate information regarding the location, quantity, condition, movement, and status of DoD material assets.] Develop near-term goals to increase asset visibility and long-term goals to achieve total asset visibility.
• More fully incorporate asset visibility into DoD's logistics business enterprise architecture and DoD's long-term logistics IT system modernization programs.

2. Forecasting:

• Improve Inventory Management (reduce unnecessary low-usage inventory, increase availability of high usage, and increase availability of critical inventory).
• Update and improve material requirements process to accurately identify required war reserve stocks and computer models to more rapidly and accurately forecast wartime supply demand and items with long procurement lead times.

3. Distribution:

• Improve the timely and seamless flow of materiel in support of deployed forces.

Process:

1. DoD provide major initiatives and goals for each of the three focus areas.
2. DoD to identify milestones for meeting goals for initiatives identified.
3. DoD indicate what metrics will be used to measure improved performance.
4. OMB/GAO/DoD concurrence on goals, milestones, and metrics.
5. Clay Johnson/Mike Wynne & Ken Krieg meeting to obtain senior DoD leadership buy-in
6. Monitor progress with monthly staff meetings and quarterly updates.
7. A day of briefings will be held in June 2005 with quarterly reports beginning in October 2005.

Responsible Organizations:

The Under Secretary of Defense (Acquisition, Technology, and Logistics) is responsible for identifying the goals and overseeing the initiatives cited in this Plan, but depends on the Services, Defense Logistics Agency, U.S. Transportation Command and others to implement the initiatives and measure their results.

Goals:

DOD’s goals under this plan are to improve the provision of supplies to the warfighter and to improve readiness of equipment while reducing and/or avoiding costs measured relative to the baseline below and using the following measures and others to be developed later.

Metrics and Baselines - FY 2004 (End of Year):

Metrics and Fiscal Year Targets:

Initiatives:

DoD’s major initiatives and the focus areas to which they contribute are shown below.

Details on each one of these initiatives are attached that include a description of the initiative and who is responsible, expected outcomes, accomplishments, milestones, impediments/challenges, and metrics.

Methodology for Evaluation:

The initiative lead is responsible for the initial assessment of the validity of the data for each of the initiatives and for tracking progress of the initiative. DoD components will establish a methodology for monitoring the validity of data as part of initiative implementation and reporting metrics as defined. Additionally, as needed independent groups (such as contractors, DoDIG, and GAO) will validate data during planned engagements.
A summary of the DoD’s overall Business Transformation and Transition Plan is included as part of this plan since transformation of business systems and processes is key to the success of many of the initiatives highlighted in this plan.

Radio Frequency Identification (RFID)

Focus Area: Asset Visibility, Forecasting, Distribution

Lead Agency: Mr. Alan F. Estevez, Assistant Deputy Under Secretary of Defense for Supply Chain Integration

Description: Implement active RFID to track consolidated shipments overseas and passive RFID to optimize the DoD supply chain to take maximum advantage of the inherent life-cycle asset management efficiencies that can be realized with integration of RFID throughout DoD.

Expected Outcomes: RFID is a transformational technology and will play a vital role in achieving the DoD vision for implementing knowledge-enabled logistics support to the warfighter through fully automated visibility and management of assets. RFID will directly enable the sharing, integrating and synchronizing of data from the strategic to the tactical level as the advance ship notices are forwarded to the nodes in the supply chain.

• Improved receiving and shipping timeliness and accuracy
• Improved asset visibility
• Improved consumption data

Accomplishements:

Milestones:

**Milestones for internal implementation roll-out will be added when they become available.

Impediments/Challenges:

• Phased implementation requires rule-making process for DFAR clause to be repeated three times
• POM/Budget cycle dictates timing for internal implementation roll out
• RFID contract application across suppliers
• Training across DoD and suppliers
• System integration/cost

Metrics:

% locations having ability to read/write passive RFID

• 100% OF CONUS distribution centers have the capability to read/write passive RFID as of Oct 2006
• 75% of strategic aerial ports of embarkation will have the capability to read/write passive RFID by May 2007
• 100% of OCONUS distribution centers will have the capability to read/write passive RFID by Dec 2007

% of consolidated DoD cargo flowing into Central Command (CENTCOM) Area of Responsibility (AOR) with an RFID tag.

• Current Performance: 84% February 2007
• Target Performance: 95% by July 2007

Additional metrics will be developed to track results that show impact of implementation

Remarks:

Milestones have been adjusted to allow additional time for business process analysis and site surveys at the aerial ports and to allow analysis, selection and installation of Generation 2 equipment that is backward compatible to Generation 1 (vice Generation 1 equipment) at the CONUS and OCONUS depots.

Milestones for the completion date for the DFARS clause scheduled for Dec 2005 is adjusted to May 2006 in order to work through the process with OMB and obtain their approval. Additional milestone dates may need to be adjusted depending on when the DFAR clause is signed.

The milestone for implementing RFID at 3 aerial ports was adjusted to accommodate contracting delays for performing the site surveys prior to RFID infrastructure installation.

The milestone for the 2007 DFAR was adjusted to reflect the Department's plan to analyze the appropriate time frame to publish the final DFAR for remaining commodities and additional locations. The current DFAR already requires the vast majority of commodities to be tagged.

The milestones for OCONUS installations were adjusted based on lessons learned from the CONUS implementation to complete the site survey process for all OCONUS locations prior to the installation of RFID infrastructure.

Metrics have been adjusted to correspond with the milestones.

Item Unique Identification (IUID)

Focus Area: Asset Visibility, Forecasting

Lead: Ms. LeAntha Sumpter, Deputy Director for Program Development and Implementation

Description: Item unique identification (IUID) provides for marking personal property items with a machine-readable Unique Item Identifier (UII), which is a set of globally unique data elements. The UII is used in functional automated information systems to value and track DoD items through their life cycle. A registry of items marked with UIIs provides accurate and accessible unique identification and pedigree information about these items. This information is used to ensure accurate acquisition, repair, and deployment of items is efficient and effective.

Expected Outcomes:

• Achieve lower life-cycle cost of item management as a result of being able to consistently capture the value of individual items purchased, control these items during their use, and combat the counterfeiting of parts
• Provide better item visibility regardless of platform or "owner"
• Supply item data necessary for top-level logistics and engineering analysis
• Provide an accurate source for property and equipment valuation/accountability
• Improve access to historical data for use during systems design and throughout the life of an item
• Provide better item intelligence for the warfighter for operational planning
• Reduce workforce burden through increased productivity and efficiency

Accomplishments:

Milestones:

Impediments/Challenges:

• Ensuring that the IUID program implementation strategy for Government and Contractor Automated Information Systems (AIS) modifications and other infrastructure requirements, such as automatic identification and data capture devices, are synchronized to take advantage of the quality and efficiency of this capability.
• Assuring that IUID funding requirements receive priority in program planning budgeting and execution.
• Using IUID as an enabler of DoD business transformation will require modifying legacy business systems to optimize value. Management of business transactions must be achieved by DoD Components' information technology (IT) applications through the use of unique item identifiers.
• Ensuring that all business transactions within the Department and between the DoD and federal and non-federal, domestic and foreign persons and organizations use uniquely identified DoD reference data controlled to enterprise-wide data standards.
• Establishing DoD governance to develop and manage the unique identification standards, based on the specific data, its associated attributes, the relationships of the data, and common enterprise-wide capabilities.

Metrics:

40% of personal property items and affiliated embedded items meeting UID criteria for ACAT 1D programs and 30% for non-ACAT 1D programs identified – existing serialized items meeting IUID criteria marked and registered by September 2007

100% of personal property items and affiliated embedded items meeting IUID criteria marked and registered by December 2010.

Enhanced knowledge sharing. Measurable outcomes by 2010:

• 80% of all Enterprise item transactions capture and utilize the UID resulting in positive progress to:
  - Single source of data with global reuse
  - Cross-Domain data exchange
  - Integration with commercial, government, and international entities
  - Reduction of material handling and other cycle time processes

Improved access to right information. Measurable outcomes by 2010:

• Access to IUID registry is 100% available to Government personnel for the items/systems they manage and 100% cross-platform visibility is available where components are common among systems
  
• Access to IUID registry is 100% available to Contractors for the items/systems they support and cross-platform visibility is available for components they provide

Improved data integrity. Measurable outcomes by 2010:

• Access and entry using machine readable marking and automated data capture results in:
  - Increase in data quality; decrease in error rates
  - Reduction in redundant data access and retrieval

Property Systems. Measurable outcomes by 2010:
Reduce the number of independent government property systems and reduce the number of redundant records by 80%.

Remarks:

All changes made tie into electronic management of GFP i.e., PIPC, and the associated functionality within the IUID Registry. The dates have been readjusted because additional functionality is now required and has been planned into the design of the IUID Registry, including the necessary testing, which has extended the schedule. In addition, the capability for electronic management of GFP is an integrated function involving both the IUID Registry and Wide Area Workflow (WAWF). Adjustments in the implementation schedule for WAWF have had a cascading effect and necessitated some adjustments in the implementation schedule for the IUID Registry so the two would be properly synchronized.

Jan 2006 milestones adjusted to Mar 2006. Additional data was required by OIRA prior to approving a clearance for publication of a proposed DFARS rule. The impact is that new solicitation will continue to include the current annual reporting requirement and will require modification once the DFARS change is effective.

Mar 2006 milestones adjusted to Apr 2006. Nation ratification is not under US control. ASTWG completion slipped from Oct 05. The impact is reduced near-term demand may potentially increase legacy implementation costs and extend timeline for near-term benefits.

Mar 2006 milestones adjusted to Jul 2006. Change to GFP milestone results from significant requests for an extension to the comment period for the proposed DFARS rule, which was determined to be appropriate. The comments are now due on 22 May 2006, with 30 - 60 days expected for ratification and publication of a final rule for use in solicitations and contracts.

Mar 2006 milestones adjusted to Sep 2006. Change to CAEs submitting plans for incorporating IUID in automated information systems results from requests for an extension from all the DoD Components to allow them to facilitate an integration among IUID, Serial Number Tracking (SNT) and Serial Item Management (SIM) initiatives and ERP implementations.

Jul 2006 Milestone adjusted to Sep 2006. Change to requirement for all GFP on new solicitations and contracts to meet the IUID requirements due to a request to extend the comment period for the proposed rule, which was determined to be appropriate and the subsequent adjudication of the comments. Approval for publication of final rule is pending.

In October 2006, 13 new ACAT 1D Programs were designated that now are required to submit IUID Program Implementation Plans. These plans are due by March 31, 2007.

Joint Regional Inventory Materiel Management (JRIMM)

Focus Area: Asset Visibility, Forecasting, Distribution

Lead Agency: Mr. Alan F. Estevez, Assistant Deputy Under Secretary of Defense for Supply Chain Integration

Description: Seeks to streamline the storage and distribution of materiel within a given geographic area, in order to eliminate duplicate materiel handling and inventory layers. Under JRIMM, all of the components in the selected geography would work together to identify implementation steps to streamline materiel flow within that geography.

Expected Outcomes:

Under JRIMM, “touches”, defined as any interaction between an individual and materiel, can decline between 40 to 60%. JRIMM will also encourage cross service collaboration and synchronization as logistics is integrated regionally.

• Streamlined materiel flow
• Reduce inventory layers
• Demand driven replenishment
• Increased productivity of space and labor resources
• Continuous improvement
• Reduced cycle time

Accomplishments:

Milestones:

Future milestones will be identified within the Distribution Reconfiguration CONOPs and will be included in this plan upon completion of the CONOPs.

Impediments/Challenges:

• Service/Agency/COCOM prioritization of, and resources committed, to JRIMM.
• Existing contracts for carriers, warehouse space, and pre-existing inventory levels impact timing of implementation of JRIMM approach.

Metrics:

• % of workload content ---- reduced by 40% for items in the San Diego Pilot by Oct 2005
• Duplicate inventory item reduction
• Initial JRIMM implementation – underway by Dec 2005 and completed by June 2006

Number of roll outs

• 1 regional roll out in addition to Oahu underway by Dec 2006
• Department-wide process owner and strategy initiated by Oct 2007, with four implementations in process or complete worldwide

Implementations continue to yield results as defined in implementation plan, including

• % of workload content reduced
• inventory removed from redundant echelons
• transportation costs decrease
• reduction in cycle times

Remarks:

Oahu CONOPS development began in Oct 2005. Comments are being incorporated and the CONOPS will be finalized by Dec 2005. – Complete.

JRIMM principles are being synchronized with implementation of the DoD’s Distribution Reconfiguration effort. Milestones have been changed to reflect this synchronization.

DoD Distribution Reconfiguration CONOPs in process. Estimated completion date changed from Sep 2006 to December 2006

Focus Area: Forecasting

Lead Agency: Mr. Alan F. Estevez, Assistant Deputy Under Secretary of Defense for Supply Chain Integration

Description: An inventory requirements determination methodology that produces an inventory investment solution that meets end item performance requirements at minimum cost. Initial pilots with RBS within the Department, and experience in the commercial world, have shown that by allocating inventory at the appropriate location and level of assembly, RBS can have a positive impact on readiness at equivalent or lower inventory costs.

Expected Outcomes:

RBS will deliver enhanced capabilities to the Department in several areas. First, it will enable a higher level of readiness at equal or lower cost. Second, it will identify items which are critical for weapons system support, and allow the Department, working with the commercial base, to develop support plans for routine and surge scenarios. Lastly, it will allow the DoD to run scenario analyses to determine the optimal way to support deployed operations based on timely data on requirements and resources available.

• Increased readiness
• Improved forecasting

Accomplishments:

Milestones:

Impediments/Challenges:

• Dependency on integration with both legacy and modernized systems for data feed and data integrity
• Service priority and resources assigned to RBS
• Budget constraints

Metrics:

RBS pilot incorporating newly defined requirements, current and scalable technology and cross service involvement initiated by April 2006

RBS usage – systems based on new technology platform and COTS packages partially deployed at all Services and DLA by Oct 2007

RBS should lead to higher operational availability

Additional metrics will be developed to track results that show impact of implementation

Remarks:

Some of the Service proposals required additional detail prior to Steering Committee approval. Therefore, Steering Committee approval of Service proposals was extended from Dec 2005 to Jan 2006 and implementation programs will commence in Feb 2006 instead of Jan 2006.

Funding reprogramming delayed from initial projected date of April 2006 to September 2006, impeding start of initial pilots and future milestones.

Navy RBS pilot in aviation shows a decrease of several hundred million dollars in inventory required to support current weapons system availability levels.

War Reserve Materiel Improvements

Focus Area: Forecasting

Lead: RDML Mark D. Harnitchek, Joint Staff, Vice Director, J-4 and Mr. Alan F. Estevez, Assistant Deputy Under Secretary of Defense for Supply Chain Integration

Description: Improvements to computing requirements based on scenarios approved under current Strategic Planning Guidance. Capability-based planning and lessons learned in OIF require the DoD to review the as is process and refine update the requirements process to better align with future needs. Improved war reserve requirements determination process.

Expected Outcomes:

A War Reserve IPT co-chaired by Joint Staff J-4 and ODUSD(L&MR) will update DoD Directive and Joint Staff instructions to align with a capability-based planning approach. Analysis of the as is process will highlight areas that must be improved and will define the to be process, including lessons learned from OIF. Army and Marine Corps are capturing OIF consumption to be included in future requirements determination models.

• Increased readiness
• Improved forecasting

Accomplishments:

Milestones:

Impediments/Challenges:

Military Service focus is on the current contingency, industrial base production, OPTEMPO, modularity.
The funding reallocation from the Services to DLA is the primary challenge to implement this strategy. The Military Service focus is on the current contingency, industrial base production, OPTEMPO, modularity.

Metrics:

War Reserve Models updated with OIF consumption data by September 2005 - Complete

Improved reporting requirements defined by January 2006 - Complete

DoDD 3110.6 updated by Oct 2006

WRM resourced at levels approved by Executive Agent Joint IPT’s

Additional metrics will be developed to track results that show impact of implementation

Remarks:

Issue of reporting and oversight was briefed to the Military Services GO/SES in Nov 2005 for decision. Implementation of an appropriate reporting strategy is expected by Mar 2006. Update of DoDD 3110.6 extended to May 2006 to incorporate lessons learned from OEF/OIF.

Apr 2006 milestones adjusted to Aug 2006. Additional BCA required prior to finalizing the medical concept.

May 2006 milestones adjusted to Oct 2006. Finalization of DoDD 3110.6 held until signature of the PDM III report. Military Services comments being worked on Class II EA, final signature expected by Nov 2006.

Nov 2006 milestone adjusted to Jun 2007. Comments being received for incorporation into the directive.

PA&E memo dated June 14, 2006 closed the PDM III directed study. The decision was made that WRM funding will remain with the Military Services as currently exists.

The analysis, which was closed out by PA&E memo dated June 14, 2006, resulted in the Military Services defining and funding war reserve requirements.

Commodity Management

Focus Area: Asset Visibility, Forecasting, Distribution

Lead Agency: Mr. Alan F. Estevez, Assistant Deputy Under Secretary of Defense for Supply Chain Integration

Description: Commodity management aligns requirements and market dynamics to optimize total cost of ownership, ensure sources of supply and a strong supply base, and bring supplier innovation to weapons systems acquisition and Sustainment.

The benefits of commodity management are recognized by DoD components and all have initiatives in progress. However, none of these efforts will address the entire Department’s spending for a commodity or a supplier. These separate initiatives will produce improvements but sub optimize performance and not capture the complete opportunity for the Department.

OSD desires to develop an approach that will optimize performance (readiness, total cost of ownership, reliability, cycle time, etc.) over the life cycle, while respecting the unique missions of each component and the initiatives now underway.

Commodity management is the process of developing a systematic approach to the entire usage cycle for a group of items. Best practice in commodity management includes 1) looking at internal buying patterns in the aggregate 2) understanding the market forces in the commodity 3) using this information to drive lowest total installed cost, including improving quality, reducing cycle time, driving component commonality and design for manufacturability and maintainability, along with lowered unit cost.

Expected Outcomes:

Implementation of commodity management across the Department will ensure that the Department identifies and supports an industrial base capable of meeting the Departments requirements, which will vary by commodity (e.g., in come commodities technological change is a driver, in others volume needs will drive commodity strategy). An understanding of the capabilities of the commercial supply base will also allow the Department to identify innovative ways of working with commercial suppliers to meet warfighter needs.

• Improved industrial base capability
• Improved forecasting
• Improved quality
• Reduced cycle time
• Lower total cost of ownership

Accomplishments:

Milestones:

Impediments/Challenges:

• Challenge of changing business practices in heavily regulated DoD acquisition environment.
• Long lead times for new weapons systems, which are the best target for introducing strategic commodity management.

Metrics:

Commodity management strategies defined:

• 2 pilot teams complete by Nov 2005
• 5 additional commodity strategies by Dec 2006
• All major commodities by Dec 2007

Results will be seen in the elements of total cost of ownership for the strategic commodity groups, including:

• Fewer contracts and contract actions, leading to less administrative cost
• Improvement in purchase lead times
• Reduction in backorders
• Lower unit costs

Remarks:

Proposal of the department wide commodity management approach is extended to September 2006. The joint bearings team was established in November 2005. Outcome of the bearings team will be used in crafting the department wide approach.

Department-wide commodity management approach being presented to leadership in Oct in lieu of Sep due to scheduling

Commodity management being integrated with BRAC DLR efforts. Milestones adjusted to reflect the integration.

Nov 2006 milestone adjusted to Dec 2006 in order to pull all subject matter experts together to coordinate the commodity management roadmap.

Commodity Management will transition to BRAC implementation group, as it is a key enabler for BRAC DLR Transfer.

Joint Theater Logistics (JTL)

Focus Area: Asset Visibility, Distribution

Lead: CDR Noble, Joint Staff, Vice Director, J-4

Description: DOD logistics transformation efforts, as well as evolving joint and combined operational concepts, have increased expectations for dramatically improved logistics operations through more effective, efficient and responsive use of available theater resources. As we transition from deliberate planning with legacy systems, to Adaptive Planning in a real-time environment, logistics planning will take on increasing importance. As such, JTL reflects the increasingly joint nature of warfare and is a means to deliver improved joint logistics support to the warfighter, and the capability for –

the joint force commander (JFC) to apply logistics resources to generate and sustain force employment that spans the range of military operations (ROMO) throughout an assigned theater or joint operations area. JTL includes organization, authorities and processes over assigned and attached forces to achieve desired joint and combined effects and operational objectives.

Through the requisite authorities, systems, and architectures (e.g., the “rules, tools, and processes), fully realized JTL will provide the wherewithal through which to integrate, synchronize, and prioritize theater logistics requirements and capabilities – the means to achieve logistics situational awareness and the ability to effectively see emerging theater logistics requirements and rapidly resolve them. JTL will ensure that the right joint logistics capabilities are available, at the right place and time, encompassing all theater aspects of moving and sustaining the force, thus serving as a strategic, operational, and tactical enabler in the achievement of desired joint operational effects, and achieving operational objectives.
As we continue to develop and refine the JTL concept, it is important to recognize what JTL “is” and “is not”. Specifically, JTL is not:

• An attempt to make all logistics functions “purple” (e.g., all Services necessarily doing the same thing the same way. JTL recognizes the unique logistics capabilities the Services bring to the fight).
• An attempt to restructure Service logistics and direct day-to-day logistics execution.
• A presumed organizational solution set (e.g., JFACC, JFLCC, or JFMCC).
  Rather, JTL is focused on providing the CoCOM/JFC the adaptive capabilities to see emerging theater logistics requirements and rapidly address them.

Expected Outcomes:

• Identification and codification of required critical joint theater logistics capabilities and associated processes
• Identification of JTL capability process tasks, conditions, and standards
• Assessment of critical JTL capabilities and processes to identify gaps
• Identification of critical JTL gaps where joint authority is necessary, but currently not present, or are poorly defined
• Identification and integration of current and emerging logistics capabilities that demonstrate enhancement to, and supportability of, achieving the JTL vision
• Identification and integration of multinational or coalition logistics capabilities that demonstrate enhancement to, and supportability of, achieving the JTL vision
• Identification of required changes to doctrine, and possibly law, to enable required logistics authorities
• Ability to synchronize and optimize strategic and theater multi-modal resources to maximize distribution, force movement, and sustainment logistics
• Real time visibility over theater logistics capabilities and requirements
• Provide the Joint Force Commander with the means to synchronize, integrate, prioritize, and direct logistics capabilities to optimize support for operational requirements
• Visibility of in theater stocks and global reach back to include assets in the distribution pipeline to reduce commodity order redundancy
• Increased readiness and reduce in theater logistics footprint though a reduced logistics response time
• Improved forecasting

Accomplishments:

Milestones:

Impediments/Challenges:

• Achieving situational understanding
• Operationalizing DAFL
• Integration of operations, logistics, and intelligence
• Resource constraints – Service/Agency/COCOM prioritization of, and resources committed, to JTL.
• Cultural paradigms
• Financial reconciliation
• System integration requirements/cost
• Dependency on integration with both legacy and modernized systems for data feed and data integrity
• Legacy systems do not facilitate automated data collection and manipulation; significant integration required to fully leverage potential
• Military Service focus is on the current contingency
• Requires active participation and full and open availability of data from all Services and logistics agencies

Note: Although not an impediment/challenge, JTL capabilities must be integrated into an executable JTL strategy with clear authorities, visibility, and processes to preclude replication of current “stove-pipe” construct.

Metrics:

Metrics will be developed to track results that show impact of implementation. The following are representative of potential JTL metrics:

• Visibility of logistics capabilities
• Visibility of logistics requirements
• Logistics Response Time
• Operational availability
• Logistics forecast accuracy
• Logistics footprint
• Joint logistics and distribution planning improvement

Remarks:

Description, expected outcomes, and impediments/challenges adjusted to provide more clarity. Metrics list added.

JTL Concept of Support and Training and Education Construct milestones adjusted to October 2006 in order to allow for alignment and synchronization of JTL concepts with Joint Logistics’ Capability Portfolio Management test case efforts.

The GAO is currently conducting a review of JTL and the Joint Staff J4 has been engaged with them in the course of that review.

Additionally, the Department is currently conducting a Joint Logistics Portfolio Management test case which will impact the alignment of logistics capability areas, including JTL.

Based on the results of the GAO review, the results of the Portfolio Management test case, and other initiatives underway within the Department, J4 will update the JTL plan accordingly.

Joint Deployment Distribution Operations Center (JDDOC)

Focus Area: Asset Visibility, Distribution

Lead: RDML Harnitchek, Director of Strategy, Policy, Programs and Logistics (TCJ5/4)

Description: JDDOC will provide COCOMs with a joint theater logistics capability (supply, transportation, and distribution) for command and control of forces and materiel moving into and out of the theater. Two major elements, besides the structure, are determining the tasking authority and ensuring improved asset visibility to the COCOMs joint logistics entity.

Expected Outcomes:

TEMPLATE: Common structure, rules, tools, training, and process tenants are captured for incorporation as necessary into Geographic COCOMs JDDOCs

EXERCISES: JDDOC template exercised in COCOM exercises; including PACOMs RSOI, UFL, and TERMINAL FURY, and EUCOMs SHARP FOCUS

INDOCTRINATION: Developed Doctrine, Organization, Training, Materiel, Leadership and Education, Personnel and Facilities (DOTMLPF) JCIDS solutions

Accomplishments:

Milestones:

Impediments/Challenges:

None anticipated.

Metrics:

Geographic COCOM will develop distribution metrics that are specific to their particular area of operations

Additional metrics will be developed to track results that show impact of specific DOTMLPF changes

Defense Transportation Coordination Initiative (DTCI)

Focus Area: Distribution

Lead: Colonel Jim Lovell, Director for Defense Transportation Coordination Initiative, USTRANSCOM

Description: Improve the reliability, predictability, and efficiency of DoD materiel moving within the Continental United States by all modes through a long-term partnership with a world-class coordinator of transportation management services.

Expected Outcomes: Improved performance of distribution to CONUS-based operational forces and depots – with corollary dollar savings.

• Improve operational effectiveness
• Improve visibility, reliability, & predictability
• Improve customer confidence
• Reduce cycle times
• Use commercial/best practices

Accomplishments:

Milestones:

Impediments/Challenges:

• Potential trade association efforts to delay the program or change the program scope or concept of operations – will require continued congressional engagement.
• Note – DTCI has had several interactions with various congressional staff members in the Jun-Aug timeframe.
• The Bid Protest had an impact on the anticipated FY07/1Qtr contract award. The DTCI PMO has returned to working the source selection full time and contract award date is now projected for mid-summer CY07 (FY07/Q3).
• The SASC directed GAO audit of DTCI was suspended pending the outcome of the DTCI Bid Protest. With resolution of the Bid protest in the government's favor (Nov 06 GAO decision), the GAO announced it will complete the audit, but it will now only focus on lessons learned from the pilot program. (The SASC has previously requested the GAO also audit the Business Case Analysis, but since the results of the GAO bid protest were so favorable, this portion of the audit has been discontinued.)

• Metrics:

Performance metrics should be available for the first few sites by early CY08 – given a mid-summer contract award, the first three DTCI sites should be up and operating by the end of CY07, with performance metrics being generated and collected soon thereafter. Metrics will be collected to track results that show impact of implementation.

Remarks:

The DTCI PMO met the anticipated Jun 2006 planned release date for the final solicitation and the planned Aug 06 date for receipt of proposals.

Business Enterprise Priorities

The Enterprise Transition Plan detailed is a comprehensive management tool that will further advance these accomplishments by providing the Department with measurable plans, schedules, and budgets. The ETP has a clear set of priorities for delivering business value to the joint warfighter and a targeted set of Business Capabilities for the Department which are enabled by key programs. It is guided by a focused and adaptable Business Enterprise Architecture (BEA). Upon completion, each program depicted in this plan will:

• Support the joint warfighting capability of the DoD;
• Enable rapid access to information for strategic decisions;
• Reduce the cost of defense business operations; and
• Improve financial stewardship to the American people.

Transformation Priorities and Programs
The integrated business transformation plan detailed in the ETP is organized around six DoD-wide Business Enterprise Priorities. These priorities cover a broad range of the Department’s personnel, logistics, real property, acquisition, purchasing and financial requirements and include:

• Personnel Visibility
• Acquisition Visibility
• Common Supplier Engagement
• Materiel Visibility
• Real Property Accountability
• Financial Visibility

These BEPs represent those areas where increased focus will bring the most dramatic and immediate positive impact on the Core Business Missions of DoD. The BEPs will enable the Department to better answer basic questions about its people, its assets, its suppliers, and its investments.

Each BEP details measurable program and business capability deliverables spread over the next several years. They will provide enduring improvements to the Department’s business infrastructure, benefiting the warfighter through integration of enterprise business processes, reducing system redundancies, and continuously improving financial transparency.

The following sections highlight the plans and business benefits for each BEP. At the end of each section is a table that summarizes the capabilities addressed, the primary milestones that will occur within the next two years, as well as the key enabling programs that will provide improvements in each area.

Personnel Visibility
Personnel Visibility (PV) is real time, reliable information that provides visibility of military service members, civilian employees, military retirees, contractors (in theater), and other U.S. personnel, across the full spectrum—during peacetime and war, through mobilization and demobilization, for deployment and redeployment, while assigned in a theater of operation, at home base, and into retirement. This includes ensuring timely and accurate access to compensation and benefits for DoD personnel and their families and ensuring that Combatant Commanders have access to the timely and accurate data on personnel and their skill sets.

Personnel Visibility is the fusion of accurate human resources information and secure, interoperable technology. These two factors set the objectives for the Personnel Visibility Transformation Plan.

Personnel Visibility Objectives:

• Provide access to more reliable and accurate personnel information for warfighter mission planning;
• Decrease operational cost and cycle times, enabled by increased consistency of data, reduced re-work and data calls;
• Improve accuracy, completeness, and timeliness of personnel strength reports;
• Reduce or eliminate duplicative data capture and access activities;
• Ensure accurate and timely access to compensation, quality of life and other benefits for DoD personnel and their families;
• Ensure accurate and timely access to data on personnel and their skill sets for Combatant Commanders;
• Improve occupational safety through analysis of environmental and safety information and related personnel exposures; and,
• Improve military healthcare delivery through a more efficient healthcare claims system, more accurate patient diagnostic coding, and joint medical materiel asset visibility.

The problems with our military personnel/pay systems are being addressed in the development of new policies, business practices, and systems. The current readiness reporting system, designed for the Cold War, has several serious shortcomings. Personnel databases do not effectively track personnel in theater, so that Combatant Commanders cannot quickly account for all personnel in theater or effectively select people with needed skills. Moreover, the complexity of the systems environment has resulted in slow response to changes in law, policy or regulation because multiple legacy systems must be modified at varying costs and with varying time lines.

The planned solutions for Personnel Visibility will enable secure information sharing in a responsive, streamlined systems environment. DoD managers at all levels will be able to perform effective analyses of our military personnel issues (including retention, skill mix, and locations) through standardization of data and business rules, and improvements to timeliness and accuracy. Service members and their families will have timely access to entitlements (including those from Veterans Affairs). Simple, integrated Personnel and Pay Systems will begin to eliminate inaccuracies and pay problems.

Improved visibility will enhance DoD’s ability to effectively use the National Guard and Reserve. Streamlined mobilization procedures will support proper training and use of skill-sets and experience. Better Personnel Visibility will enable effective management and use of the Individual Ready Reserve (IRR). Improvements to personnel visibility systems will also enable automation of Pre- and Post-Deployment Reserve Component Health Assessment and Line of Duty Access to Care for Reserve and Guard personnel.

While visibility is the priority, it must be balanced with proper safeguarding of privacy act and classified personnel information.

Achieving Personnel Visibility Objectives
The Personnel Visibility portion of BEA 3.0 focuses on nine Business Capabilities: Manage Personnel and Pay; Administer Position Management; Access Candidate; Manage Assignment and Placement and Transfer; Manage Retirement and Separation; Manage Quality of Life and Morale, Welfare and Recreation; Manage Military Health Services; Manage Benefits; and Manage Travel. BEA 3.0 defines the processes, roles, data structures, information flows, business rules, and standards required to guide improvements across personnel and health services management. The architecture also highlights interdependencies between HRM and other CBMs. Accordingly, the PV capabilities in the BEA are being used to determine and approve future, as well as to evaluate ongoing, DoD Enterprise and Component programs.
The Department is developing, deploying, or enhancing four Enterprise-wide systems that will be used by all Components to enable transformation:

• Composite Health Care System II (CHCS II)- CHCS II is a medical and dental clinical information system that generates and maintains a comprehensive, life-long, computer-based patient record for all military health system beneficiaries.
• Defense Civilian Personnel Data System (DCPDS) - DCPDS is a web-based human resources system that standardizes civilian human resource processes and promotes efficiency of service delivery for all DoD civilian personnel.
• Defense Integrated Military Human Resources System (DIMHRS)- DIMHRS will provide a fully integrated multi-service pay and personnel system that will support military personnel throughout their careers and retirement. This web-based system will also be used by Combatant Commanders to maintain visibility into the location, status, and skill set of every member of the armed forces.
• Defense Travel System (DTS) - DTS is a web-based system that will replace numerous disparate travel systems. DTS will be the designated single standard system to meet temporary duty travel requirements for all DoD uniformed and civilian personnel.

Impact of Personnel Visibility
Upon full realization of the Personnel Visibility objectives, the ability to rapidly identify who the Department has deployed, and who is available to deploy, to support the nation in times of crisis will be better enabled. Support to our uniformed and civilian workforce will improve through more timely and accurate pay and compensation. The cost of providing personnel management support to our workforce will be significantly reduced. Finally, the Department’s ability to make the best use of our current human resources and plan for the skills we need in the future will be improved, as we obtain on-hand visibility to our current work force skills base.

Acquisition Visibility
Acquisition Visibility (AV) is defined as timely access to accurate, authoritative, and reliable information supporting acquisition oversight, accountability, and decision making throughout the Department for effective and efficient delivery of warfighter capabilities.

Acquisition Visibility brings transparency to critical information for supporting full lifecycle management of the Department’s processes for delivering weapon systems and automated information systems. This goal fully supports the responsibilities, scope, and business transformation requirements of the Weapon System Lifecycle Management (WSLM) Core Business Mission. Acquisition Visibility will:

• Address the full lifecycle of acquisition management, to include: requirements definition, technology development, production, deployment, sustainment,
  and disposal;
• Identify standard data requirements, authoritative data sources, relevant business rules, standard interfaces, and/or Enterprise-wide solutions;
• Provide accessibility, continuity and accountability of acquisition information required by managers and decision makers;
• Respond to new requirements for acquisition related business transformation capabilities; and
• Ensure compliance and consistency with BEA goals and objectives.

The Acquisition Visibility portion of BEA 3.0 is focused on three AV Business Capabilities: Manage Acquisition Oversight Integration; Conduct Program Management; and Monitor Commercial Request for DoD Technology Export. BEA 3.0 reflects the processes and data required to bring transparency to Departmental operations; illustrates complex interdependencies between the WSLM and other functional areas; identifies gaps; and creates a useable framework to benchmark the transformation of Defense Acquisition.

Currently, DoD generally limits the collection, correlation, and dissemination of acquisition information to mandated reporting and specific formatted products. Today, internal and external reporting requirements are met primarily through manual data collection. Acquisition program and status reporting processes are resource intensive, lack timeliness, and frequently are not authoritative. These limitations create an environment where the norm is reactive responses to existing problems versus proactive management that mitigates potential problems.

Attaining acquisition visibility will address these limitations and enable DoD to take advantage of more complete and timely information to query, collect, analyze, format, and present acquisition management information.

Defense Acquisition Management Information Retrieval (DAMIR) is a DoD initiative to provide enterprise visibility to acquisition program information. The primary goal of DAMIR is to leverage existing data sources to make relevant acquisition information available to all user communities, regardless of the source agency or where the data resides. As DAMIR evolves through spiral development, it will implement new capabilities and ultimately replace the Consolidated Acquisition Reporting System (CARS).

DAMIR’s implementation relies on web services and related technology to develop an environment that provides a shared solution that enables end users to collaborate on enterprise acquisition program management oversight. DAMIR will allow users to see the details of relevant data, facilitating timely and accurate management decisions based on in-depth data analysis. The DAMIR tools will harness existing technology to exploit volumes of data and will evolve as the enterprise meets new business challenges.

With DAMIR, program managers will be able to provide more comprehensive and timely program status and deviation information. Such information is required to support program management activities and related acquisition oversight management activities.

From an interagency perspective, the Department of State (DoS) and Department of Commerce (DoC) submit export licenses for review by DoD. These reviews often require multiple copies of technical or other supporting documentation that are delivered and disseminated manually. Inspector General and Government Accountability Office (GAO) reviews have determined that automated systems in DoD, DoS, and DoC currently supporting this capability are neither standardized nor interoperable among the reviewing agencies. This limitation results in an inefficient workflow with unnecessary delays. US Export Systems (USXPORTS) was established by DoD to address and solve these automation problems.

USXPORTS electronically disseminates export data using an automated workflow within DoD, and electronically transfers license application data among the interagency export community. DoD reviews license applications from a national security perspective. Automation of the DoD internal review process through USXPORTS also provides DoS and DoC with the ability to submit electronic license applications (received from Industry) to the DoD.

Impact of Acquisition Visibility
Upon full realization of the Acquisition Visibility objectives, the Department will have the ability to continually assess the status of Defense Acquisition Programs, including their milestone (performance and schedule) and budgetary performance, and compliance with statutory and regulatory information reporting requirements and guidelines. This information should enable more informed balancing of resources among programs to meet the dynamic challenges of evolving national security strategy; improve the ability to oversee acquisition activity and compliance with ethical standards for engagement with industry partners; and provide capability to support warfighter needs in a more efficient and effective manner.

Common Supplier Engagement
Common Supplier Engagement (CSE) is the alignment and integration of the policies, processes, data, technology and people to provide a consistent experience for suppliers and DoD stakeholders to ensure reliable and accurate delivery of acceptable goods and services to support the warfighter.
The primary goal of CSE is to simplify and standardize the methods that DoD uses to interact with commercial and government suppliers in the acquisition of catalog, stock, as well as made-to-order and engineer-to-order goods and services. CSE also provides the associated visibility of supplier-related related information to the warfighter and Business Mission Areas. CSE will:

• Streamline and reduce complexities of the process touch points between DoD and suppliers;
• Adopt standard business processes, rules, data, and interoperable systems across DoD;
• Transform internal IT interfaces through application of standard data.

Specific efforts under these objectives include (but are not limited to)
deploying DoD-wide the:

• Authoritative source for commercial supplier data;
• Standard method of identifying business opportunities and distributing related information to commercial suppliers;
• Authoritative source for commercial supplier representation/certification information;
• Authoritative source and method for updating government buyer/supplier data;
• Standard method for producing agreements with commercial and government suppliers (to include the phased implementation of the common financial data nomenclature);
• Standard method for commercial suppliers to submit invoices and for the DoD to collect item unique identifiers;
• Authoritative source for commercial supplier subcontract reports; and,
• Standard method for reporting commercial supplier agreement data to Congress and public.

Daily, the DoD procures thousands of goods and services from suppliers throughout commercial industry, the federal government, and internal sources. These activities directly support the warfighter efforts in theater and garrison. To ensure that warfighters have the right goods and services when necessary, the Department must be aligned with its supplier base. The transformation toward CSE is focused on improving the standardization, interoperability, and effectiveness of supplier interaction within the Department.

CSE supports the Department’s Mission Area and the warfighter by improving supplier relationships. For example, the CSE portion of BEA 3.0 focuses on the Business Capabilities Manage Request, Manage Sourcing, Manage Receipt and Acceptance, and Manage Payment. The architecture defines the processes, roles, data structures, information flows, business rules, and standards necessary to improve knowledge of suppliers and their performance.

CSE will continue to focus on enhancing the business processes that support supplier integration and delivery of enterprise solutions to drive consistency and commonality throughout the Department, while enabling DoD compliance with federal procurement preference programs. These processes and solutions provide authoritative data sources, data standards, and common processes supporting supplier interactions with the Military Services and Defense Agencies.

They also provide information in support of three of the Department’s priority areas—Materiel Visibility, Acquisition Visibility, and Financial Visibility. The DoD Enterprise-level programs that enable this transformation include collection of Item Unique Identification (IUID), processing of Radio Frequency Identification (RFID) information, capturing requirements information, entitling action for payment, processing Intragovernmental Transactions (IGT), and using the Standard Financial Information Structure (SFIS). The resulting outcomes of CSE support all of the Department’s Core Business Missions by providing an efficient supply chain for the warfighter.

The Undersecretary of Defense for Acquisition, Technology and Logistics (USD (AT&L)) has directed the Components to deploy a set of Interim State Procurement Enterprise systems. These systems, along with systems such as Electronic Document Access (EDA) and Contract Performance Assessment Reporting System (CPARS), form the core of the CSE transition. While many of these systems support multiple CSE Business Capabilities, each has a primary Business Capability to which it aligns.

Additionally, the Department is committed to enabling the President’s Management Agenda (PMA) across its activities. As part of the PMA, the federal eGov Integrated Acquisition Environment (IAE) initiative provides a core set of federal-wide systems and functions that the Department is deploying in support of CSE. These federally mandated IAE systems, including Central Contractor Registration (CCR), Federal Business Opportunities (FBO), Federal Technical Data Solution (FedTeDS), Federal Agency Registration (FedReg), On-line Representations and Certifications Application (ORCA), Past Performance Information Retrieval System (PPIRS) and the Excluded Parties Listing System (EPLS), are all in production today and are all being deployed by the Military Components. New IAE systems that are in development, including the Electronic Subcontract Reporting System (eSRS), the Federal Procurement Data System—Next Generation (FPDS-NG), and Wage Determinations On-Line (WDOL), are also part of each Component’s planned system landscape. These systems serve as enablers of CSE Business Capabilities as well as enterprise standards and authoritative sources of data. Combined, these IAE solutions will help yield simpler, common, integrated business processes, while also increasing data sharing and enabling better business decisions in procurement, logistics, payment, and performance assessment.

The Standard Procurement System (SPS) is the backbone of the DoD Enterprise contracting and procurement activities, and primarily supports the capabilities of Manage Sourcing and Manage Receipt and Acceptance. As the core set of sourcing information shared with our suppliers, SPS is the standard for contract generation, modification, and administration. Additionally, the SPS program supports the warfighter in contingency operations. A version of SPS, Battle Ready Contingency Contracting System (BRCCS), is used for contingency contracting in theater. Our movement toward automation will make the contingency contracting process, from requirement to payment, even easier by reducing the manual processes of passing information across the Department and making the information available when it is needed.

The linkage between contracting, logistics, and finance is Wide Area Workflow (WAWF). The mandated system for receipt and acceptance functions, WAWF provides the ability to process invoices and receive reports electronically through the acceptance and payment process. WAWF serves as a collection point for the Item Unique Identification (IUID) information and supports the processing of RFID information. Using WAWF dramatically lowers the interest penalty payments and increases the processing efficiencies of these activities.

Past performance information on suppliers is important to provide a clear view of supplier activity when making source selection decisions. Under Manage Sourcing and Manage Receipt and Acceptance capabilities for supplier performance information, CSE is leveraging Army and Navy legacy systems to provide an enterprise solution to collect and report performance information from across the Department and support the Program Management activities, which supports Acquisition Visibility.

Strategic Sourcing—meaning procuring goods and services by leveraging the Department’s buying power to achieve greater results—is an initiative that is gaining momentum throughout the federal government. The Department has initiated several strategic sourcing efforts, such as the Air Force’s IT Commodity Council, the Army’s office supplies initiative, and OSD’s joint commodity councils for enterprise-wide strategies for administrative/clerical support and wireless devices/services. To support these initiatives, tools have been piloted jointly for analyzing spend and requirements data. The Acquisition Spend Analysis Pilot (ASAP) (to be followed by a post-pilot Acquisition Spend Analysis Service (ASAS)) and Advanced Requirements Management (ARM) Pilot, led by the Army and sponsored under the Rapid Acquisition Initiative—Net-Centric (RAI-NC) program, provide the ability to collect disparate information in a net-centric fashion and make more informed and effective contracting decisions.

DoD Electronic Mall (DoD EMALL), managed by the Defense Logistics Agency (DLA), provides an online catalog ordering capability that is available to federal users. Supporting the government purchase card, DoD EMALL allows sourcing agreements and contracts to be posted online for ordering. DoD EMALL also supports DoD compliance with federal environmental procurement preference requirements and the DoD Green Procurement Program by enabling customers to identify and purchase environmentally beneficial products. In addition to DoD EMALL, pilot efforts are underway to support strategic sourcing initiatives and provide increased capability to evaluate, source, and execute orders against multiple award contracts across the enterprise.

The next generation of sourcing capabilities is being analyzed as part of the Department’s analysis of alternatives encompassed in the Defense Business Sourcing Environment (DBSE) initiative. This initiative is supported by all Components in an effort to determine what will be needed for the next generation of sourcing capabilities. DBSE will provide recommendations on the process, people, and technology to enable required sourcing capabilities in the future.

Impact of Common Supplier Engagement
Upon full realization of the Common Supplier Engagement objectives, the Department will have established standard supply management processes for procurement of materiel and services. These processes will be critical to effective supply chain execution as the DoD moves to performance-based logistics and outsourced services with its industry partners. Such actions will streamline management of payment with the defense supply base and assure compliance to statutory regulations for procurement.

Materiel Visibility
The Materiel Visibility (MV) Business Enterprise Priority is defined as the ability to locate and account for materiel assets throughout their lifecycle and provide transaction visibility across logistics systems in support of the joint warfighting mission.

Materiel Visibility will provide users with timely and accurate information on the location, movement, status, and identity of unit equipment, materiel and supplies, greatly improving overall supply chain performance. The MV BEP will improve the delivery of warfighting capability to the warfighter as measured in terms of responsiveness, reliability and flexibility. Materiel Visibility will:

• Uniquely identify tangible personal property items to improve the timely and seamless flow of materiel in support of deployed forces; improve asset visibility across the Department; and improve inventory management;
• Improve process efficiency of shipping, receiving, and inventory management by enabling hands-off processing of materiel transactions;
• Provide DoD with the capability to account for and report all materiel costs incurred to acquire and bring military equipment assets to a location suitable for its intended use;
• Ensure materiel hazards and associated risks are readily visible to the warfighter; and
• Transform the Department’s supply chain information environment by 1) improving data integrity and visibility by defining, managing, and utilizing item, customer, and vendor master data; and 2) reducing complexity and minimizing variability on the supply chain business transactions by adopting standardized transaction and business rules.

With Materiel Visibility as the backbone, business processes will deliver warfighting capability with greater reliability, speed, and flexibility, from factory to foxhole. In other words, speed, flexibility, and reliability to the warfighter are the anchoring objectives; costs and asset utilization are the constraining factors. Ultimately, improved financial control, efficiency, and effectiveness are by-products of properly deployed and interoperable processes, the central focus of business transformation.

Materiel Visibility and Component Transformation Activities
The Materiel Visibility BEP will support the delivery of products and services to the warfighter by specifying an information environment that is level and consistent across the DoD. MV will provide the ability to see, locate, and account for materiel assets throughout their lifecycle, with transaction visibility across logistics systems and in support of a tiered architecture supported by the two major agents for DoD-wide logistics—DLA and USTRANSCOM—in partnership with the Military Departments and other Components.

The Materiel Visibility BEP supports the transformation of each Component’s business operations to achieve integrated end-to-end process interoperability. The result will be a collection of interoperable processes and systems, in an integrated enterprise based on best practices enabled by accessible data from authoritative sources.

Military Equipment Valuation (MEV) provides a useful illustration of the linkage among the Components and with the DoD as a whole. DoD must make improvements in order to determine the accurate cost of assets and to provide timely information on their disposition. Filling these gaps requires accounting for and reporting of all government costs incurred to acquire and bring a military equipment (ME) asset to a form and location suitable for its intended use. The DoD must also know when an item enters operational use and when it is removed as a result of loss, destruction, or end of useful life.

Significant interaction exists between the Warfighting Mission Area and the Business Mission Area. For example, materiel must flow from business to warfighting seamlessly through an integrated supply chain process.

The MV BEP improvements focus on the information “hand-off” to warfighters. Conceptually, materiel flows forward from the business enterprise to the warfighter in support of the deployed Joint Force, and flows back from the warfighter to the business enterprise during retrograde and reconstitution. The handoffs and transition to and from the warfighter must be transparent and seamless.

As the Materiel Visibility BEP matures, more emphasis will be placed on data-related initiatives. As a first step, USTRANSCOM and DLA in partnership with other Components will facilitate the evolution toward DoD data standards through the adoption of commercial standards. This migration from a proprietary government standard to open commercial standards will improve the DoD end-to-end distribution system, allow visibility of materiel throughout the fulfillment cycle, and allow transmission of information among systems and organizations across the end-to-end enterprise at a rate and with a level of detail currently not possible.

The Materiel Visibility portion of BEA 3.0 is focused on four Business Capabilities: Perform Build, Make, Maintain, and Sustainment; Deliver Property and Forces; Dispose or Return Property and Materiel; and Perform Asset Accountability. BEA 3.0 defines the processes, roles, data structures, information flows, business rules, and standards required to drive the information flow through the supply chain.

The business rules incorporated into BEA 3.0 will improve the behavior of the supply chain by standardizing business practices, policies, and vocabulary. Business rules will change the business process and guide transformation. To that end, BEA 3.0 articulates a set of 49 Materiel Visibility rules.

Moreover, there are specific rules that will apply to the Item Unique Item Identification (IUID), the Radio Frequency Identification (RFID), and Military Equipment Valuation (MEV) initiatives of the Department. Additional rules apply to Electronic Data Interchange (EDI), transaction hubs, master data management, the Standard Financial Information Structure (SFIS) as it applies to Materiel Visibility, materiel management, transportation, maintenance and other processes. Component’s transition plans will be updated to implement the business rules.

The explicit focus of USTRANSCOM’s transformation effort is the development of a seamless process to provide better visibility of suppliers from their point of production to their ultimate destination. To achieve this objective, which is central to the overall Materiel Visibility BEP, USTRANSCOM is designing and implementing an end-to-end distribution architecture, aligned with BEA 3.0, implementing a series of initiatives to provide the warfighter with improved visibility across the pipeline, and attain 100% total asset visibility of all materiel and forces. Key initiatives include the Defense Enterprise Accounting and Management System (DEAMS-USTRANSCOM), and several data standard and supply chain interoperability initiatives being worked in partnership between USTRANSCOM and the DLA, which will serve as the basis for defining and developing data enterprise services for the end-to-end logistics community.

The Defense Logistics Agency is implementing the Materiel Visibility BEP requirements as part of a Services Oriented Architecture, the DLA Integrated Data Environment (IDE), which will consist of a net-centric set of supply chain data enterprise services, with reachback to source systems such as Business Systems Modernization (BSM) and Distribution Standard System (DSS) for materiel and financial visibility, and the Reutilization Modernization Program (RMP) for materiel visibility of excess property. Additionally, DLA will facilitate in FY2006 and FY2007 a phased implementation of the Defense Logistics Management Standards (DLMS) as an essential prerequisite to implementing programs such as the SFIS, IUID, and RFID.

These efforts will enable near-term implementation of Materiel Visibility priorities across the logistics community that have currently been limited by the constraints of the legacy system environment. Building on a DLA IDE and the adoption of common business rules and data standards, DLA is developing the business case for the ultimate Logistics Data Strategy, a Logistics Enterprise Integrated Data Environment (EIDE), which will achieve Materiel Visibility and supply chain data interoperability through the development of enabling data enterprise services for the logistics community. This will ensure that data is accurate, timely, consistent, and available to the warfighter in the form of information.

Specific to the Materiel Visibility objective to value and account for military equipment, OUSD (AT&L) will implement an Enterprise-wide solution to provide the functionality to account for and report capitalization and depreciation of military equipment. The solution will be manifested in the Capital Asset Management System - Military Equipment (CAMS-ME), which will be deployed in increments of increasing capability: Increment 1 will provide a system to maintain the initial baseline data; Increment 2 will provide a system that will calculate military equipment values in an automated way based on transactional data from DoD receipt, acceptance, and payment systems; and, Increment 3 may be deployed if available before the Military Department’s Enterprise Resource Planning (ERP) systems are deployed. Increment 3 will provide more granular data and better interfaces to accountability systems. However, the long-term solution for military equipment valuation and for property accountability will be in the deployment of Navy ERP, DEAMS-AF and ECSS, and Army GFEBS and LMP. As these are deployed, they will take over the functionality that CAMS-ME provides.

Impact of Materiel Visibility
Upon full realization of the Materiel Visibility objectives, the Department will have real-time information about its inventory of equipment no matter where it physically resides. Improved readiness and cost reductions will be enabled through the use of this information to optimally deploy this equipment when and where it is needed.

Real Property Accountability
Real Property Accountability (RPA) provides the warfighter and Business Mission Areas access to near real-time secure, accurate and reliable physical, legal, financial and environmental information on real property assets in which the Department of Defense has a legal interest.
RPA goals enable warfighter and business mission continuous access to information for evaluation of real property. For example, assisting the Enterprise-wide Installations and Environment community improve management of dispersed and disparate real property assets is one RPA goal. Other goals include facilitating management of lifecycle real property information by Installation Managers while supporting enterprise requirements such as financial reporting. RPA objectives include:

• Increased access to more reliable and accurate real property information for both warfighter and business mission planning use;
• Enhanced ability to link individual people and personal property to specific real property assets and their physical locations within business and tactical systems;
• Decreased operational cost and cycle times, enabled by increased consistency of data, reduced re-work and data calls;
• Improved accuracy and auditability of financial statements;
• Reduced or eliminated duplicative data capture and access activities;
• Provision of a single source for 24x7, secure and accurate location information available for transportation, warfighting logistics, and planning providing geospatial, technical and related real property data; and
• The inclusion of Environmental Liabilities Recognition, Valuation and Reporting Requirements (ELRV&RR) and processes, as well as Hazardous Materials Process Controls & Information Management (HMPC&IM) requirements into the BEA, linking the data from the former to the real property inventory, and the latter as a control to the material management process.

Following the delivery of BEA 3.0, additional goals will be addressed by the Real Property & Installations Lifecycle Management (RPILM) Core Business Mission Area and include:

• Completing an Analysis of Material Alternatives (AoMA) to identify the optimal mix for real property inventory IT systems throughout the Department;
• Developing a Real Property Asset and Site Unique Identification (RPUID) Registry, assigning unique identifiers to all DoD real property sites and assets, and linking to these geospatial and other relevant real property management data;
• Establishing uniform data requirements for management of
  all DoD real property;
• Supporting the Components in deconflicting their real property asset portfolios;
• Supporting the Components in integrating legacy inventory
  IT systems with the RPUID registry and expanding it to include individual assets;
• Working with the Components in migrating their disparate
  data to the uniform real property data requirements; and
• Identifying additional gaps in achievement of effective RPA and prioritizing reengineering efforts. For example, the real property lifecycle encompasses operation, maintenance, disposal, etc.

While the DoD Installation and Environment community has served the warfighter and business mission successfully over several decades, disparate processes and information support systems have hampered its ability to address the customers’ requirements adequately. These deficiencies are manifested in redundant data calls, lack of system interoperability, cost inefficiencies, etc. These deficiencies and material weaknesses have resulted in numerous initiatives and reports designed to improve DoD Real Property Asset Management.

The Real Property Accountability portion of BEA 3.0 focuses on four Business Capabilities: Real Property Inventory; Real Property Acceptance; Hazardous Materials Process Controls and Information Management; and Environmental Liabilities Identification and Valuation. There are no current enterprise systems that support the capabilities for Real Property Accountability; therefore, Components will implement RPA requirements in their respective systems guided by the standards, data, and processes documented in BEA 3.0.

The DoD Installations & Environment (I&E) community is working to meet the policies’ goals and resolve material weaknesses through the development of collaborative solutions across the Department. The DUSD (I&E) established the Business Transformation (BT) Directorate within I&E to facilitate I&E community transformation with the DoD Service and Agency Components.
As provider of transformation support, the BT Directorate works with the Components to identify transformation priorities, capabilities and initiatives for cross-DoD benefit.

RPA and Component Processes and Systems
The RPILM products produced in support of achieving the RPA BEP are the tools or enablers of business transformation throughout the DoD I&E communities. They provide the roadmap for process and system migration and describe the “To-Be” end state. RPILM does not manage enterprise systems that support the capabilities identified in the RPA BEP. Therefore, the DoD Components will implement the “To-Be” RPA requirements in their respective systems.

Impact of Real Property Accountability

Upon full realization of the Real Property Accountability objectives, the Department will be able to link people to the physical assets for which they are responsible with greater accuracy, improving readiness and deployment capability. Correlation of environmental liabilities to specific real property assets in the DoD inventory will help manage and reduce financial risk associated with environmental requirements. Establishment of standard location and geospatial data for our real property inventory will form building blocks for improved personnel visibility, logistics and materiel distribution processes.

Financial Visibility
Financial Visibility (FV) means having timely access to accurate and reliable financial information (planning, programming, budgeting, accounting, and cost information) in support of financial accountability and efficient and effective decision making throughout the Department in support of the missions of the warfighter.

At the highest level, the goal for Financial Visibility is more efficient and effective decision making throughout the Department and assistance in satisfying the DoD-wide effort to achieve financial auditability. The core set of objectives for this Business Enterprise Priority (BEP) include:

• Creating transparent financial data throughout the enterprise;
• Establishing authoritative financial data sources;
• Enhancing and expanding access to authoritative data sources for timely analysis (DoD Enterprise-level business intelligence);
• Enabling the linkage for resources to business outcomes;
• Creating and implementing common financial language across the DoD; and
• Eliminating existing financial management weaknesses and deficiencies.

Financial Management (FM) is engaged at all levels within DoD and throughout the operational theater because accounting and finance underpins every function, transaction, and management decision. FM’s role is to provide timely, reliable, and accurate financial information to enable a shared understanding of how funds are brought into the Department, how allocation decisions are made, how resources are being used to achieve the mission, and how DoD’s investments are reported to the American people.

The Financial Visibility portion of BEA 3.0 focuses on six Business Capabilities: Forecast, Plan, Program, and Budget; Manage General Ledger; Manage Financial Assets and Liabilities; Managerial Accounting; Financial Reporting; and Funds Allocation, Collection, Control, and Disbursement. BEA 3.0 defines the processes, roles, data structures, information flows, business rules, and standards required to guide improvements that enable financial visibility. The architecture also highlights interdependencies between the FM CBM and other CBMs.

The following are highlights of planned near-term activities related to improved financial visibility:

• Deploy data standards (e.g., Standard Financial Information Structure (SFIS) and unique identification (UID)) at the Department level that will enable data interoperability, traceability, visibility, and valuation of key assets (e.g., weapon systems, materiel assets, real property, etc.) as well as improve financial visibility and auditability;
• Complete standard data element definitions to support managerial/cost accounting;
  • Provide standards-based DoD Enterprise-level Program and Budget data definitions and business rules for Acquisition Category (ACAT) 1 Major Defense Acquisition Programs (MDAPs);
• Establish initial standards to integrate budgeting with execution financial information;
  
• Deploy DoD Enterprise-level business intelligence, including management dashboards and drill down from summary to detail capability, for initial usage for select Components and the Office of the Secretary of Defense (OSD); and
• Implement DoD-level financial improvement plan with Components to achieve clean audit opinions for balance sheet items that represent the largest asset and liability categories; integrate this plan with the BMMP systems transition plan
  

While the current plan for enhancing Financial Visibility across DoD is a comprehensive view of achievable targets, gaps remain. For example, there is a need to provide the Defense Agencies (other than the Defense Logistics Agency) with modern systems to support end-to-end financial management transaction processing and reporting. The Financial Management community has recently begun an initiative to identify the optimal solution to satisfy this need, with the OSD Financial Management Transition Team (FMTT) working in close collaboration with the Defense Finance and Accounting Service (DFAS) and the rest of the Defense Agencies in defining the objectives, high level requirements, and possible solution scenarios. Among the options being explored include a new commercial off-the-shelf software (COTS) financial management solution, adoption of an existing COTS financial management solution, joining an existing COTS financial management implementation (such as Defense Enterprise Accounting and Management System (DEAMS) or General Fund Enterprise Business System (GFEBS)), or a combination to address a logical grouping of Agency needs.

Financial Visibility and Component Transformation

Transformation requires tight linkage between vision, policy, and standards identified at the OSD level, and the deployment activities that occur within the Components. Each of the five initiatives identified within the Financial Visibility Business Enterprise Priority has a direct positive effect on the transformational efforts of the Components.

For example, the SFIS initiative has moved from the initial definition stage at the OSD level into the deployment stage at the Component level. Three different approaches have been established to assist the Components in building the appropriate deployment strategy based on their particular needs.

Table 2-6: Timeline for Component Migration to SFIS Compliance within BEIS (Legacy Accounting Systems)

1. The Legacy Accounting System approach will utilize a centralized SFIS cross walk capability, which is being developed as part of the Business Enterprise Information Services (BEIS). This approach focuses primarily on legacy accounting systems in use throughout DoD today, but also encompasses cash and funding systems whose information is required to facilitate calculation of undistributed amounts within BEIS. These systems will be required to submit detail level accounting transactions to BEIS for conversion to SFIS equivalent data elements and subsequent posting to a United States Standard General Ledger (USSGL) compliant DoD corporate general ledger.
   
   This portion of the SFIS implementation initiative commenced in July 2005. Future milestones as depicted in Table 2-6 depend upon anticipated reallocation of FY06 funding.
   
   
2. The Business Feeder System approach will require incorporation of SFIS elements within business systems, which create business transactions within DoD. This approach applies to systems which create transactions such as travel orders, contracts, contract modifications and certain types of invoices. This approach may also encompass certain entitlement and disbursing systems in use throughout the Department today which receive source transaction data from the previously mentioned feeder systems, perform entitlement matching functionality and generate associated payments.
   
   
3. Certification of this approach will vary. Systems in a development cycle were required to submit plans for SFIS compliance by September 30, 2005. Systems in sustainment were required to submit compliance mappings by August 31, 2005. Major Acquisition Information Systems (MAIS) systems must incorporate SFIS requirements in their Operational Requirements Document (ORD) and their Test and Evaluation Master Plan (TEMP) and complete successful testing prior to approval of Full Operational Capability (FOC).
   
   
4. The Target Accounting System approach encompasses emerging environments, including new Enterprise Resource Planning (ERP) systems. These systems are Federal Financial Management Improvement Act (FFMIA) compliant and configured to post transactions to an internal USSGL compliant general ledger.
   
   This approach requires certification of the ability to receive SFIS data as part of source transactions and derive the appropriate budgetary and/or proprietary general ledger entries in accordance with the USSGL transaction library. The USSGL transaction library will be included in their requirements and testing documentation (i.e., ORD, TEMP) and successfully tested prior to Milestone C. In those cases where the system has entered limited deployment, successful testing will be completed prior to approval for FOC.

Each Component is identifying the optimal path to achieve SFIS compliance based on its own system landscape, but all are doing so based on the same set of standardized definitions, business rules, and data values.
Similar to the SFIS deployment strategy, the Components play an integral role in each of the other four Financial Visibility initiatives (which are all described in detail in Volume II).

• The Business Enterprise Information Services (BEIS) migration path is outlined in Table 2-6 above. This migration will also continue as the emerging systems come on line in each of the Components. These emerging environments will eventually replace many of the feeds into BEIS that exist today.
• The Defense Cash Accountability System (DCAS) program is an enterprise solution that is on-boarding additional Components at each phase (phases and impacted Component operations are depicted in the DCAS summary chart in Volume II).
• The Intragovernmental Transaction (IGT) initiative is still in its formative stage as a program, focusing currently on enterprise requirements and solution approach. Once this phase of the initiative is complete, an integrated rollout schedule will be developed to account for Component-level deployment.
• The Program Budget Framework (PB Framework) is also in the early stages of defining requirements and establishing enterprise standards. Again, once these are complete and communicated throughout the Department, Component rollout plans will follow.

Impact of Financial Visibility

Upon full realization of the Financial Visibility objectives, the Department will increase the speed and accuracy of financial reporting, enabling rapid decision making and resource allocation decisions to support dynamic national security needs. The creation of authoritative sources for financial information and analysis, and the implementation of a standard financial language for DoD financial systems, will also contribute to the Department’s ability to better depict its financial condition as confirmed by clean audit opinions.

BEP Summary
As highlighted in each BEP summary, Figure 2-1 shows the Business Capabilities that the Department needs to improve in order to achieve the goals and objectives of each priority and to support the overall desired outcomes of business transformation. Further details on the process for identifying capabilities are described in Chapter 3.

Business Capabilities are the building blocks for defining and implementing the transformation. A Business Capability is the ability of an organization to execute a specific course of action to deliver value. Each capability includes a combination of business processes, people, tools, information and/or systems.

The capabilities shown in the figure below are the capabilities identified to date for the Department’s first set of enterprise priorities as described in the preceding pages. These capabilities will be implemented by a combination of solutions, including Enterprise-wide systems, or Enterprise-wide standards, Component systems, and/or policy and organization changes.

Figure 2-2 below summarizes the key Business Capability milestones for all six BEPs, representing key steps along the path to overall business transformation.

Figure 2:2 Key Milestones by Business Enterprise Priority (by calendar year)

Table 2-8 provides a summary of budgeted investment resources required for the programs and offices supporting the Business Enterprise Priorities and Component priorities. The submitted budget is the current articulation of resource needs to support transformation. This summary is based on the President’s Budget for FY2006 (PB06)—revised requirements from BEA 3.0 and associated investment decisions will be reflected in later updates to the President’s Budget (and correspondingly in the ETP). Table 2-8 includes budgets only for investments in the target solutions. In addition to this, the Business Mission Area requires funding for the continuing operation and improvement of the full scope of DoD business systems. For example, while Table 2-8 shows $4.2B of investment in target programs, the ETP also lists other systems that are part of the target environment as well as legacy systems being migrated—the FY06 budgets addressed by those additional programs included in the ETP are $0.94B (these other resource needs are detailed in PB06 IT budget exhibits rather than in the ETP). The budget information provided below, and the budget details found in Appendices A and I, support DoD leadership in making tradeoff decisions across the BMA.

DoD leadership has designated accountable programs to provide improvements to the required Business Capabilities. These accountable programs—both systems and initiatives—are shown in the figure below. These programs represent DoD Enterprise-wide and Enterprise-level solutions and standards for improvements to Business Capabilities. For all solutions, deployment involves implementing process and policy changes, training staff, implementing the necessary facility improvements, as well as realigning organizations and roles to the target solution to increase business value.

Additional information on these Enterprise programs is contained in several appendices.

• Appendix A: Contains the objectives for each program, dates for program milestones, the number of systems migrated to that system and budget information through FY07.
• Appendix E: Contains more specific information on BEP capabilities, systems and initiatives.
• Appendix F: Provides a master list of Business Systems and Initiatives that will be part of the target environment.
• Appendix G: Presents system migration diagrams (also known as “fishbone charts”) for the Enterprise Business Systems.
• Appendix H: Shows for each system (called a “target system”) all the legacy systems migrating to it. This appendix provides a tabular summary depiction of the System Evolution Description (SV-8).
• Appendix I: Provides funding summary information for systems and initiatives through FY11.
• Appendix J: Contains a Gantt Chart that shows system and initiative deployment milestones as well as system migration and retirement milestones.
• Appendix K: contains performance measurement, risk, and cost/benefit analysis information sheets related to each system and initiative.