Slides 10 4 identify relevant components of information from

Organizational-Based Cost-Management in a Deployed-Tactical Environment: A Case Study 316th Expeditionary Sustainment Command (ESC) Deployed in Iraq from November 2007 - May 2008 Author: Dr Peter H Antoniou, MIBA Major Mike Williams, USA and Major Matt Mixa, USMC Excerpts from MBA Thesis at the Naval Postgraduate School Terminal Learning Objective • Task: Identify Relevant Components of Information from a Real World Scenario • Condition: You are training to become an ACE with access to ICAM course handouts, readings, and spreadsheet tools and awareness of Operational Environment (OE)/Contemporary Operational Environment (COE) variables and actors • Standard: with minimum 80% accuracy • Use information from case study to answer questions 316th ESC Case Study Briefing Outline Case Study Background – Case Purpose – Leadership – Mission Iraq Deployment – Background Issues – Meals, Ready-To-Eat (MREs) – Supply Support Activity (SSA) Assignment – MREs, Groups (1,2,3) – SSA, Groups (4,5,6) Background This case is based on actual operational experience and accomplishments of a US Army Reserve Unit, the 316th ESC, under the command of BG Couch during their Iraq deployment in 2007-2008 Corrective measures were taken to rectify all issues indentified in this case study The research for this case was originally done by MAJ Mike Williams USA and MAJ Matt Mixa USMC as their thesis at the Naval Postgraduate School Some of the numbers have been simplified to aid instruction 316th Case - Purpose Purpose Statement: Discuss two 316th ESC deployment “lessons learned” and demonstrate how the ESC learned about its financial cost and documented the effects of that learning Command level questions: Did the 316th ESC improve efficiency and effectiveness through the implementation of the components of a Cost Management Enterprise? How did they it? Who did it? Why did they it? What were the results? United States Army Reserve - Leadership A 3- star General leads the United States Army Reserve and holds the following two titles: Chief, Army Reserve (CAR) The CAR reports to the Chief of Staff of the Army and represents the Army Reserve in policy and planning discussions with the Army, the Department of Defense and Congress Commanding General (CG) of the U.S Army Reserve Command (USARC) The CG of USARC reports to Army Forces Command and is responsible for the staffing, training and readiness of most Army Reserve units in the continental United States and Puerto Rico 316th ESC - Mission Mission: To provide command and control of all sustainment forces in an operational theater The ESC plans, coordinates, synchronizes, monitors, and controls operational-level logistics operations for the Army component commander, joint task force, or joint task for headquarters for the area The 316th ESC has 13 units with eight subordinate brigades comprised of more than 10,000 soldiers in approximately 110 battalions, companies and detachment-sized units The 316th ESC is a subordinate command of the 377th Theater Sustainment Command (TSC) located at Belle Chase, Louisiana (near New Orleans) 316th ESC Deployment in Iraq Background The 316th deployed from Pennsylvania to Baghdad in 2007 Assigned to Multi-National Corps Iraq (MNC-1), it owned Support Brigades in support of Multi-National Divisions It consisted of: - A single general support transportation battalion - Six sustainment brigades aligned with each Multi-National Division (MND It was responsible for coordinating over 20,000 soldiers supporting 165,000 coalition and Iraqi forces 316th ESC - Issue: Meals, Ready-To-Eat (MREs) Responsible for the supply of MREs to forces in Iraq • • • • MRE’s shelf life is years at 80 Degrees F In Iraq, stored “in the sun”; no cover, shade Environmental containers not cost effective Iraq’s environmental conditions resulted in MRE’s shelf life = Two months • Found that over $31 million in MREs were condemned since 2003 316th ESC - Issue: Supply Support Activity (SSA) Standard operating procedures are often a “bad fit” initially in a combat zone due to: - Shortage of transportation assets Lack of supply infrastructure Segmented or separated SSAs Communication incompatibilities Close sense of ownership for on-hand supplies • Upon arrival in Iraq, 316th ESC did not refer SSAs between supply points, resulting in: - Excessive Customer Wait Time (CWT), and - Excessive cost incurred by filling SSAs CONUS 10 316th ESC - MRE Issue 26 316th ESC - Referral Issue Group Four Issue:  Numerous warehouses in the area of operations stock the same parts Question:  What are the advantages and disadvantages of allowing one warehouse with a stock out to order a part from another warehouse with a surplus (a referral) versus ordering from CONUS in the US 27 316th ESC - Referral Issue • Advantages: – Parts received more quickly – With a lower shipping cost • Disadvantages – In-country transportation carries risk to soldiers and equipment – “We may need that item at some point in the future” 28 316th ESC - Referral Issue Group Five Issue:  Sharing of critical parts between warehouses appears to be minimal requiring warehouses with shortages to order from CONUS in the US at increased cost or air shipment and increases time to service Question:  What would the Referral Control report look like that you would recommend that the CG require of Brigades? 29 316th ESC - Process - Weekly Review and Analysis meetings - SPO set the Review and Analysis agenda - CG only wanted to see abnormal variances and trends - Managers briefed the cause of variances - Managers briefed recommendations for action - Subordinate units participated indirectly - Subordinate units saw slides ahead of time 30 316th ESC - Referral Issue Group Six Issue:  The attached summary was briefed to the CG by one of the Brigades Warehouse    Referrals Referrals Referrals made     completed in a incomplete in week in week A            60                  60                0    B             30                    5            25 Question:  What questions would you suggest the CG ask and why? 31 316th ESC Summary and Results 32 316th ESC - S ES OC PR LEA DE RS HIP Four Key Ingredients of an Effective Cost Management Program STAFF ACE MEASUREMENT (Source: Geiger, 2009, p.48) 33 316th ESC - The ‘Cost Management’ Learning Process Plan Costs Execute Costs Measure Costs Review Costs Target Activities Set Goals Conduct Ops Allocate Costs Conduct AAR (Source: Geiger, 2009, p.77) 34 316th ESC - Leadership Driven Management - Experience in Iraq as a Brigade Commander influenced his desire to seek improvements - Believed in de-centralized control; let subordinates track what was necessary - Leadership Methodology: “Drove us hard-brutal in his standards Also, provided top cover.” “Did not accept ‘I don’t know’.” “Almost a sixth sense to detect problem areas.” BG Couch “…kind of the way I’ve done business whenever I’ve been in command is that I really felt like I owe it to my leadership and to the American public to meet my mission but still be cognizant of the funds that are given to me to that job.” 35 316th ESC MRE Problem - Implementation Briefed both subordinate brigades and MNC-I and 1st TSC – Push back from Brigades initially – Fear of not being able to provide support when needed – BG Couch pushed the issue and told the BDEs they were going to it Initial problem with Iraqi Theatre going “Amber” and “Black” on Day Of Supply (DOS) – DLA was not aware of new standards – Had to change tracking metric and re-calibrate what “Green”, “Amber”, etc meant With data, planned usage for theatre – Used a moving average – Head count was cost driver to forecast future usage Reviewed plan every 30 days 36 316th ESC - MRE Issue Redefined what a Day-of-Supply (DOS) meant – Old way: MREs per day per Soldier – New way: Looked at actual MREs issued, factored in DFACs to develop new DOS number Reduced required DOS from 30 to 25 37 316th ESC MRE Issue - Results Reduced O/H stocks by 55,000 Cases Saved Soldier lives by reducing convoys, etc Minimum cost savings of $4.85 million – Reduced convoys (BG Couch focused on getting soldiers off of the roads) – Reduced storage costs in Iraq and Kuwait Continued to meet mission Discovered Georgian “Spike” 38 316th ESC Referrals Issue - Results Reduced days in wait time In 82% of all referrals, the referral process saved 2-3 days in wait time per item The SSA in Taji reduced Wait Time from 28 days (Jan ’08) to days (May ’08) In 10 months, referred 32 million pounds of parts Cost avoidance to not transport into theater: Over $65 million 39 316th ESC - Conclusion Leadership driven management used by the 316th ESC saved lives, saved time, and saved money The lessons of the 316th ESC’s operations in Iraq are applicable to both ongoing and future operations 40 ...Terminal Learning Objective • Task: Identify Relevant Components of Information from a Real World Scenario • Condition: You are training to become an ACE... and documented the effects of that learning Command level questions: Did the 316th ESC improve efficiency and effectiveness through the implementation of the components of a Cost Management Enterprise?... to the Chief of Staff of the Army and represents the Army Reserve in policy and planning discussions with the Army, the Department of Defense and Congress Commanding General (CG) of the U.S Army