Industry representatives have a big say in how the Defense Logistics Agency improves warfighter support and reduces costs, DLA Director Navy Vice Adm. Mark Harnitchek said during a “Captains of Industry” roundtable focusing on food-service support May 5 at the McNamara Headquarters Complex.
“We do this with all eight of our supply chains, and I can tell you most of the savings don’t come from ideas that we cook up here or out in the field. I would say 60 or 70 percent of them come from you,” the director said.
The event brought together leaders from DLA Headquarters, DLA Troop Support, DLA Distribution, and commercial manufacturing and distribution vendors.
Gina Vasquez, director of subsistence supplier operations for DLA Troop Support, described several initiatives that have been completed since they were suggested during the last Captains of Industry event in April 2013. Among them is catalog streamlining, through which subsistence officials worked with customers to reduce the number of line items available via catalog by 52 percent.
“This was one of the things that you guys suggested to us in terms of keeping the food quality great but taking some cost out. You told us that most of your commercial customers don’t have nearly the size of catalogs that we have. It’s not like we’ve gone to just one of everything, but a few of everything instead of 15 of everything. It makes your job a little easier in terms of management, and there’s some savings there as well,” Harnitchek said.
New solicitations also now expect subsistence prime vendors to use private-label items in place of brand-name items when the same quality and lower price is available. Vasquez said officials project the agency will save $16 million by increasing the use of private-label items.
Representatives from several companies described cost-cutting initiatives they believe can further help the agency save $13 billion in six years. Anham, DLA’s subsistence prime vendor for Southwest Asia, is sending fewer containers to Afghanistan via the Northern Distribution Network and instead using routes through Dubai; Baku, Azerbaijan; and Riga, Latvia. The effort saved $26 million in 2013 and is expected to save $32 million in 2014 while shortening transit times by more than 38 percent. Anham projects it will save another $2.7 million in 2014 by using locally grown produce rather than imported produce.
Food Services, Inc. is also exploring methods of combining loads of similar products provided by different suppliers to save container shipping costs, and Ebrex Food Services is determining whether it can decrease operating costs by integrating dining facility menus between all the services.
The DLA Office of Operations and Research Analysis Theater Distribution Team outlined its recent container utilization study, which determined whether shipping costs could be reduced by consolidating more items into each shipment. According to the study, $11.5 million could be saved by increasing the average global utilization rate of shipping containers from 69 percent to 80 percent. Vendors shared positive and negative perspectives on the initiative.