MTMC looks ahead: an interview with MTMC's Commanding General.
A. The Strategic Distribution Management Initiative is co-sponsored by TRANSCOM and DLA. Its primary purpose is to reduce the time our warfighters have to wait for supplies, often referred to as customer wait time. SDMI consists of four committees, focusing on airlift, sealift, stock positioning, and resources. I chair the sealift committee. Because of the hard work by many people on this committee and in industry, we are seeing historic reductions in the time it takes to get supplies to CINCs.
DoD has never experienced reductions like this. In the past year, we have reduced customer wait times for surface deliveries to SOUTHCOM from 47 to 35 days; to PACOM, from 48 to 36 days; to JFCOM, from 55 to 45 days; and to EUCOM, from 50 to 45 days. Goals are in the low 30s, and I believe we will reach them across the world in six months. We are still struggling with CENTCOM because of continuing customs clearance challenges, but we will overcome those delays, too. These surface shipment improvements should now lead to reductions in our strategic inventories. When you reduce delivery times so significantly, you simply do not need as many supplies at strategic levels to buffer shipments.
Let us assume, for instance, that we were a commercial business like Coca Cola, and reduced our shipment times to the Pacific Rim by two weeks. Do you think we would adjust our production and inventories to compensate? You bet we would ... on the way to the bank. DOD's inventories were valued at about $80B the last time I checked. For each day saved in the pipeline, we should anticipate millions in future supply and storage cost savings. This is a very big deal, with huge potential. We must crosswalk the intransit reductions into real savings of supply dollars in the future. That is the next step for DoD.
Q. Compared to the activities of Desert Shield/Desert Storm 10 years ago, how well is MTMC prepared to meet the challenges of the War on Terrorism?
A. We are very much prepared, although this war, like all wars, brings new challenges. We expect far fewer shipment requirements than in Desert Shield/Desert Storm, but we anticipate an increased need for small MTMC teams operating in previously unfamiliar locations to sustain the force. We have deployed small Deployment Support Teams already; we expect to deploy more. MTMC battalions are at peak readiness for these missions, largely as a result of our efforts over the past year to task organize teams from multiple units, and because of our command emphasis on training to standard. I am very proud of MTMC units worldwide. They are ready. The War on Terrorism brings unprecedented demands for force protection, as all Americans know after September 11. MTMC is very much focused on that as well.
Q. As the Full Service Moving Project phases out its operations, what are the lessons learned that may be applied to a rejuvenated MTMC personal property program?
A. There are no new lessons from FSMP that we will be applying to the MTMC personal property program. TRANSCOM will be assessing OSD's FSMP pilot, the MTMC pilot, the Navy's SAM pilot, and the Army's Hunter pilot in the months ahead, and recommend to the Secretary of Defense a path for the future, probably by next spring. There are various lessons that all pilots have taught us: the preference for full value replacement when damages occur, the ease of direct claim settlement, and the importance of real-time visibility of shipments, to name a few. The full extent of changes, though, will be dependent on Service funding in the future. I think Services really need to come to grips with what they want, whether the future program should be public or private in nature, and how much they are willing to pay for various improvements.
Now, all this being said, let me also add that we in MTMC are working hard within our means to improve the current program. Recently we announced stricter standards for carrier qualification, as a step toward protecting service member interests. I have also challenged the MTMC staff to reduce delivery times for household goods shipments worldwide to 60 days or less. Presently, we have more than 6700 channels with delivery times in excess of 60 days. I think that is ridiculous, and we are going to change it. Remember what I said about SDMI improvements. We are delivering supplies to warfighters in far less than that. There is no good reason why we cannot do the same for our families. And so, we are going to take action and reduce customer wait time for household goods too.
Q. We are putting renewed emphasis on the operations of MTMC's commercial munitions carriers. What can you tell us about it?
A. Our munitions program had not changed since the 1980s, when the U.S. was focused almost exclusively on the Soviet Union. We had no homeland threats two decades ago. Our world has changed and our munitions program is changing to compensate. We have increased coordination and overall security of these shipments in recent months. Much is underway. Our focus is on pre-shipment coordination and clearance, intransit visibility and en route security of shipments that move in the most direct way from origin to destination. We are doing well.
Q. The decision has been made to substitute a commercial transportation software system for both the Global Freight Management and the Integrated Booking System. It sounds as if this decision will have wide business process implications for MTMC.
A. You're right. This decision will have a major positive impact on MTMC's ability to manage shipments end-to-end and worldwide from a single platform. We simply cannot do this today. Instead, we have to move from a domestic to an international program, reentering data time and again. We, will acquire a systems integrator in the next year, with a performance-based contract, to design and make operational an integrated platform for GFM and IBS within the following year. The result: will be a Commercial Off The Shelf, or COTS, solution, leveraging single-data entry. We will also prepare the new system to accept our Worldwide Port System in the future. The result will save us tens of millions of dollars over half a dozen years after a short, two-year break even, and that is by the more conservative business case estimates. But we didn't take this path to save money; we took it because we need to be a world-class traffic manager for DoD. If you're going to be world class in the logistics business today, you must think and act end-to-end. This recent decision resulted from detailed analysis. It is a significant step toward a better future for this command and our customers.