Industrial partners can help the Defense Logistics Agency cut material costs and help the agency maintain peak performance in tough financial times, DLA Director Navy Vice Adm. Mark Harnitchek said July 23 during a roundtable on construction and equipment supplies at the McNamara Headquarters Complex.
Department of Defense customers have about 30 percent less money to spend but logistics support requirements remain the same, Harnitchek said in his opening remarks. The meeting was part of the director’s “Captains of Industry,” a series of meetings with the military’s industrial base.
“So what does that mean to all of us?” he said. “That means that we have to be really good stewards of the public trust and the trust that our customers put in us to deliver exactly the same outcome, just with less money.”
DLA and its industrial partners both rely on working capital funds to operate, Harnitchek said, making it even more important to stretch every customer’s dollar. The Captains of Industry meetings provide a great forum to drive out excess costs, he added.
“If we’re asking you to do stuff that induces a lot of extra costs that don’t add any value, please tell us that,” he said.
Harnitchek also outlined the agency’s efforts to cut $13 billion in material and operational costs by fiscal 2019.
“We’re on the Atkins Diet here because we got a little chunky over the past 12 years with fully funded budgets and great big supplementals, and we got used to that,” he said. “So we’re being very judicious, and we’re worried … about that next dollar. So if it doesn’t result in some downstream cost that’s less or some remarkable increase in performance, we’re going to give that money back to the Department [of Defense].”
Strong partnerships play a key part in maintaining the agency’s operational readiness and keeping costs low, Harnitchek said.
“We want to spread that money we have as far as it possibly goes to the right folks to deliver that level of peak performance,” he said. “That’s what we’re doing at DLA. We’re doing a pretty good job, and you guys are a huge part of that.”
The event brought together senior leaders from DLA, representatives from the DLA Troop Support construction and equipment supply chain, and industry partners.
DLA Troop Support Director of Construction and Equipment Supplier Operations Ralph Lund gave an update on action items from the previous roundtable, held in 2012.
The event concluded with briefs from several of vendors that described missions, industry challenges and potential solutions for DLA to reduce costs and improve support.