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You can’t drive to an island, but you can fly from it.

By Steve Geary | 10/09/2017 | 5:16 AM

 

In a recent article on the devastation in Puerto Rico caused by Hurricane Maria, the Washington Post compared Hurricane Irma in Puerto Rico with the devastation of Irma in Texas.  Quoting Garrett Ingoglia of Americares, a US-based relief organization, the Washington Post wrote, “When Florida was hit by Irma, workers from Americares were able to drive in to deliver supplies and aid. But you know, you can't do that with islands."

Puerto Rico and the US Virgin Islands are over 1,000 miles away from the closest major US seaport, Miami.  That’s comparable to the distance between Chicago, a major distribution hub, and Houston.  The big difference is that you can drive a truck to Chicago from Houston in less than a day, but getting to Puerto Rico from Miami requires loading and sailing a cargo ship.  Cargo ships at full speed typically move at about 25 miles per hour, a lot slower than the 65 mph cruise down the interstate.

This logistics challenge is what some naval friends of mine call the tyranny of distance.

Over three million people live in Puerto Rico, and let’s not forget about the US Virgin Islands, with another 100,000 or so.  The population of Puerto Rico – they are US citizens - ranks in the middle of the pack of US States, with over three million inhabitants.  That makes it comparable to Connecticut.  Not just comparable to Hartford, or New Haven, or Fairfield Country, but comparable to the population of the entire State of Connecticut. 

I’m not sure how to put a disaster of this magnitude in perspective, except by quoting Joe Biden.  This is a “big f**king deal.”

Once the ships arrive in Puerto Rico, there is only one good sized port.  The Port of San Juan is well equipped, and quickly recovered after the storm, but it may be overmatched by the challenge ahead.  In terms of port capacity if ranks just below the ports of Portland, Maine or Albany, New York, and just ahead of that well known seaport of Toledo, Ohio.

It’s fair to say that Puerto Rico has a port capacity issue.

The electrical infrastructure has fallen over across all of Puerto Rico.  According to NPR, it will take months to get the antiquated electrical grid back on-line.  The absence of an electrical grid has a ripple effect.  Without electricity, water pumps are won’t run.  And without pumps, municipal water systems run dry.  People now travel miles to find fresh spring water.

Ben Franklin understood the issue, saying, “When the well's dry, we know the worth of water.” 

In the near term, logisticians have a massive humanitarian relief challenge compounded by distance, the isolation created by the Caribbean Sea, devastation, destroyed infrastructure, and the isolation created by the sea.  But what happens after that?  It will be years before Puerto Rico and to a lesser degree the Virgin Islands get back on their feet.  What happens then?

Almost a century ago, in the 1930s, we had the “Dust Bowl,” devastating over a quarter of a million acres centered in western and central Oklahoma.  That land area is comparable to Puerto Rico.  By some estimates, the Dust Bowl event displaced over 3,000,000 people.  Already charter airlines are leaving San Juan full, every day. The exodus has begun.

We may see another logistics problem on our hands:  mass migration.  The talking heads on television are drawing comparisons to Houston.  Maybe we should be thinking about Haiti, the South Sudan, and Ethiopia.  Except that with Puerto Rico and the US Virgin Islands are the United States of America, so there can be no wall.

The government came up with a logistics innovation first.

By Steve Geary | 09/20/2017 | 7:06 AM

Imitation is the sincerest form of flattery. There was an interesting piece in the June issue of DC Velocity Magazine, “Micro-warehouses bring fulfillment closer to the customer.” Containerized micro warehouses? It’s a great concept, worth putting in the spotlight.

I showed the story to a Veteran who is also a logistician, and he looked me in the eye and said, "Been there, done that, got the t-shirt." 

He's right. The military did it a long time ago. Pre-loaded containers configured as a stockroom are a fantastic timesaver when you are deploying a military force and you have to hit the beach and function.  Transport the box around the world, open the door, and you have a mini-distribution center ready to go. 

These transportable distribution points ride on rail cars. They ride on trucks. They ride on combat amphibious assault ships, and on merchant marine container ships. They are air transportable. They line up nicely on the back of combat transport vehicles for mobility in a battle zone. They can be linked together to create standard 20-foot container configurations. 

The Marines call them quadcons, palcons, and joint modular intermodal containers. The Army has larger truck or rail transportable versions that can deploy, open up, and be a distribution point ready-to-go. Heck, I used to buy coffee out of a container converted to retail and storage space in Iraq. FEMA does something similar for disaster relief, with pre-configured loaded containers deployed around the country, ready to respond immediately to a disaster.

Bottom line: containers configured to service as mobile distribution points is a concept the military has long understood. The ability to deliver what is needed when it is needed, even in the most challenging situations. Necessity is the mother of invention.

Interesting times.

By Steve Geary | 09/04/2017 | 3:34 PM

In March I wrote, “Relationships around the world are shifting, which means that the logistician’s world is becoming more uncertain.  Some people make money from uncertainty, but in our world we earn profits by making uncertainty go away.”

Well, things aren’t getting any better.  It's our job to make the supply chain work, to make things move, and it sure looks like the time has arrived to have the contingency plans ready.

According to the US Census Bureau’s 2016 statistics, the Top 3 trading partners of the United States are China, Canada and Mexico.  A few slots below, at Number 7, is South Korea.  The United States is involved in difficult trade discussions with all of them, and things are more than a bit unsettled.

And while trade with Japan is no longer top of mind in our collective consciousness, as it was thirty years ago, they still rank Number 4 on our list of trading partners.  With ICBM’s flying overhead launched by North Korea things feel a little bit more uncertain in Japan these days.

Let’s lump the individual European Union countries together, and we can add Top 10 trading partners the United Kingdom, Germany, Belgium and the Netherlands to the list.  There is more than a little uncertainty over just where Europe is headed as they thrash through Brexit.

The only country on the Top 10 trading partner list we haven’t talked about is Hong Kong.  As each day passes it is harder and harder to think of Hong Kong as somehow distinct from China, so I’m going to lump Hong Kong into the a bucket of radioactive uncertainty that includes Hong Kong, China, Japan, and South Korea.  A little round guy with a funny haircut named Kim Jong-un is putting them the notional shadow of a mushroom cloud and that's not good for trade.

This Top 10 look should be a disturbing perspective for any logistician.  If you are reading this it is a pretty fair bet that you, like me, are a logistician.  It’s our job to remove uncertainty, promote stability, and in general make things flow smoothly, but the world is not cooperating.  My advice is that it is time to start hedging your bets.  If you export heavily, start looking for new markets, hopefully domestic.  If you import heavily, start looking for domestic sources.  And start dual sourcing everything. 

As I said in the March article, “We can deal with uncertainty, but are we descending into chaos or simply witnessing a global realignment?  Either way, it’s going to be interesting.”  We may have passed simply interesting a few stops back.  “May you live in interesting times” is a proverbial Chinese curse.  Logisticians are now living through some very interesting times – getting more interesting by the day - and it surely feels like a curse.

Tunnel Vision.

By Steve Geary | 05/29/2017 | 5:52 AM

Gartner is out with their “Top 25” list of supply chain performers for 2017.  Number 1 is Unilever, followed by McDonalds, Inditex, Cisco Systems, and H&M.  Scroll all the way through and there is no doubt:  it’s an impressive and diverse group of high performing supply chains.

Yet there is a conspicuous gap.  Where are the government supply chains?  Where are the defense folks?  Where are the NGO’s?  In Gartner’s defense, stories of ineffective performance in government, defense, and NGO procurement are common.  But does that mean that all of these supply chains are inherently poor performers?  Or is Gartner the victim of tunnel vision and selection bias?

The government establishment is surely guilty of tunnel vision.  According to Forbes magazine, “The Pentagon has long relied on the incumbent Beltway-centric contractors, which build overpriced, underperforming, custom-made products.”

Insular thinking and tunnel vision are dangerous.

I browsed through the Gartner results sitting in a Starbucks – another company recognized on this year’s Top 25 list.  I was nibbling on a muffin, drinking coffee, and sipping from a carton of milk.  The milk came in one of those boxy cartons, where you push the straw through a hole in the top, using the straw that comes taped to the side of the carton.

Then the light bulb came on.  I first became acquainted with that style of packaging in Iraq, sitting in a Forward Operating Base (FOB) military dining facility (DFAC) eating dinner in 2007.  That fresh milk outside of Baghdad was not sourced locally.  That milk came, along with fresh fruit, vegetables and just about everything else we ate, all the way from the West.

That high performance supply chain was managed by a private sector service provider under a government contract.  Fresh milk, fresh fruits, and fresh vegetables served in a barren, scorching, desert war zone, delivered by a private sector defense contractor.  Why aren’t there any government supply chain actors on Gartner’s list? 

Consider Boeing.  These are the folks who, among other things, support NASA and help keep the crews on the International Space Station supplied.  Now that’s a logistics challenge that few others have ever tackled.

And then there is Lockheed Martin.  As far as I can tell, LMCO is the last government contractor to crack the Gartner “Top 25” list, back in 2010.  They remain formidable logisticians, providing supply chain services at a high operational tempo, from Korea to Southwest Asia, but they do no crack the list.

And let’s not forget The American Red Cross.  Quoting directly from their website, “From small house fires to multi-state natural disasters, the American Red Cross goes wherever we’re needed, so people can have clean water, safe shelter and hot meals when they need them most.”

Looping back to Gartner’s list, it is impressive and there are lessons to be learned from everybody on that list.  That said, high performance supply chains do not necessarily have high inventory turns or align to “corporate social responsibility goals,” as selected and applied by Gartner.  The metrics used by Gartner may be appropriate for some organizations, but not all sectors fit the Wall Street template.

Supply chains success is about delivering high impact outcomes, and while that may be congruent with commercial success, it is not synonymous.

Government spending accounts for something like a third of Gross Domestic Product, and while not as big as the private sector it is significant.  NGOs perform many “hard to do” functions that save and preserve lives in emergency and austere environments.  To fulfill their missions, government contractors and NGO’s often need world class supply chain capabilities.

To have a full spectrum view of logistics excellence, don’t ignore the Defense Contracts and NGO’s.

What’s in a name? Wrestle over the threat, not what people choose to call it.

By Steve Geary | 05/11/2017 | 6:26 AM

"What's in a name? That which we call a rose by any other name would smell as sweet." - William Shakespeare, Romeo and Juliet

Consider the term “Supply Chain Risk Management,” or the acronym SCRM.  Raise the issue, and a logistics leader will likely ask you to take a seat.

On the other hand, think about “cyber.”  Say that word to a logistician, and you’re likely to be sent down the hall to the folks in IT. 

Cyber considerations are all over the supply chain.  There are times when the first stop in a cyber threat is IT, but there are also a slew of issues where the operators need to lead.

Cyber is a risk, we have to manage it, and it’s in the supply chain.  How do cyber considerations impact sourcing?  Shipping?  Communications?  Subcontracts?  ECO's?  Industrial base management and oversight?  Payment methods and international money transfers?  The list is almost endless, and none of these examples are IT centric and all have a cyber component.

Here’s a citation the Defense Acquisition University offers to help students get their arms around Supply Chain Risk Management.  “Supply chain risk management (SCRM) is ‘the implementation of strategies to manage both everyday and exceptional risks along the supply chain based on continuous risk assessment with the objective of reducing vulnerability and ensuring continuity.’”

Cyber issues are just one of the risk vectors to consider in SCRM, and a good chunk of responsibility for that risk sits with the operators, not the techies.  If you’re more comfortable grappling with Supply Chain Risk Management, fine. 

On the other hand, if somebody knocks on your door to talk about cyber, ask them to take a seat and shock them with how cultured we are in the Supply Chain:  quote Shakespeare.

Five things government and government contractors should think about

By Steve Geary | 05/04/2017 | 10:44 AM

I recently read an interesting email newsletter from a friend of mine, Ann Noder at Pitch Public Relations™, and I salute my friend’s skill at getting my attention. 

Her piece was called “Ways to Take Control of Your Supplier Management Processes,” and a lot of her material has bled into this post. Supplier management is all about process, but how often do we turn our attention to the process we use to manage the supplier relationship management process?

According to Ann, “Supplier relationship management is hard enough—don’t make it harder by giving in to internal disorder. Starting with that first key step of going paperless, these simple suggestions will help your organization focus on improving efficiencies, supporting compliance, and building healthier supplier relationships while mitigating risk.”

In February of 2017, the GAO issued their latest review of risk areas in the Supply Chain. Their key findings: 

Inventory management

DOD's inventory management practices and procedures have been ineffective and inefficient. DOD has experienced high levels of inventory that were in excess of requirements and weaknesses in accurately forecasting the demand for inventory items.

Materiel distribution

DOD has faced challenges in delivering supplies and equipment, including not meeting delivery standards and timelines for cargo shipments as well as not maintaining complete delivery data for surface shipments.

Asset visibility

DOD has had weaknesses in maintaining visibility of supplies, such as problems with inadequate radio-frequency identification information to track all cargo movements.

Sadly, the DoD is not unique. Every government department faces challenges. These challenges are compounded by the government’s inherent instinct to overlay bureaucracy on any process and the vast amount of data on the loose in the supply chain. In the land of government contracting across the supply chain, streamlining the supplier relationship management process isn’t just low-hanging fruit; it’s a field of ripe watermelons lying on the ground.

So, let’s overlay five  recommendations in Ann’s column—drawn from Progressly, which helps companies move from paper to digital—against the federal government. 

1. Go Paperless

The government is ahead of their private sector support contractors. For example, the federal government has established a central repository, the System for Award Management (SAM). This is an official website of the U.S. government. There is no cost to use SAM. You can use this site for FREE to register to do business with the U.S. government, update or renew your entity registration, and generally take care of what needs to be taken care of to maintain certifications.

Contrast this to the processes used almost universally by prime contractors. They typically organize by project, and so for every new opportunity or engagement the subs need to fill out a new batch of paperwork. Great from the primes point of view, but adds to overhead and total cost, and introduces opportunity for error. Hardly best business practices.

2. Maintain Your Records

Keep your records up to date. Having a clear assessment and inventory of existing contracts is vital, and the best way to do that is to digitize. The same holds for performance level agreements and performance reports. Have a single point of contact accountable for the portfolio, and do a management review quarterly. Unfortunately, with the constant turnover in government programs, both on the government side and the contractor side, this level of diligence is necessary.

3. Make Sure Internal Controls Are Efficient

Effective control is more than password protection or a lock on the file cabinet door. Design the process and streamline it. There is a military department that has defined a rigorous and logical supply chain oversight process. Unfortunately, it is serial, and each step on the review process goes all the way up to the top of the organization, with check steps at each level of the hierarchy. Sometimes the duration of the performance review cycle—and this is a logistics oversight process—can take months.

4. Simplify Your Collaboration Tools

Email isn’t a collaboration tool. Maintaining files in the cloud can be. Shared databases surely are.  Standardize date, eliminate duplication, and focus on the vital few. Data is a means to an end, not an end in itself. 

Estimates of the additional oversight costs associated—as reported by a study performed at the University of Tennessee—may be as much as 25% of the budget. The Federal Acquisition Regulation (FAR Part 15) is the antithesis of streamlined and efficient supply chain oversight.

5. Drive Accountability and Transparency

There are key steps you can take to boost efficiency without sacrificing quality. Apply good management practice and assign ownership. If everybody owns it, then nobody owns it.  Use technology that ensures the approval process is both easily accessible by key stakeholders and easy for them to understand and navigate. Make sure integrated technology and tools gives decision makers centralized access to everything they need to move a plan or a contract forward. The less time an approver spends digging around for missing info, the better.

Once defined and agreed upon, shared processes will drive accountability on both sides of the table. Ideally, your process management solution will also enable you to assign tasks and gain visibility on outputs and performance. These open collaboration tools will ultimately enhance collaboration as you shift from problem-finding to problem-solving—together.

Federal government silos - can they be broken?

By Steve Geary | 04/09/2017 | 5:05 PM

I’m a supply chain guy, so I hate organizational silos. 

Logistics, by its very nature, cuts across silo boundaries.  In a vertically organized company, an order drops into Sales and Marketing, flows through Operations to be configured, and then heads over to Logistics for fulfillment.  The final stop in the journey is likely Accounting, who handles billing and collections.

Many companies understand the inherent challenge of inward-focused silos.  Not all situations are the same, not all customers are the same, so a one-size-fits-all structured response rarely meets the specific requirements.  Through this lens, effective customer-facing organizational structures work to cut across functional boundaries and orient horizontally, focused on the customer, rather than vertically by function. 

At DC Velocity, we love to talk about Omni-Channel – a tag line describing synchronized market-driven responses tailored for individual customers, a horizontal construct if there ever was one.

Instead of a horizontal orientation, the federal government is built around silos.  The skeletal infrastructure of the United States Government is clear; just look at the names of the cabinet departments in the executive branch.  State, Treasury, Defense, Education, Homeland Security, Transportation, Justice are just a few examples of cabinet departments, and they, like the rest of the departments, are all silos.

The silo approach to organization is recursive:  it repeats and repeats and repeats, giving us silos within the silos. 

Overnight on April 6, 2017 we launched 60 cruise missiles – 59 made it to the target, a single airfield in Syria, in a response to Bashir Al Asad’s used of chemical weapons – AGAIN.  A recap of what has happened up to this point.  First, let’s imagine a red line and pretend we’ll do something if chemical weapons are used.  These idle threats from the previous administration obviously didn’t work, so the previous administration gave it to the VP and sent him off to work with the international community.  Yeah, like that moved things along - not.  Then we arrived at the final policy posture, let’s wait for the EU to do something . . .ah, they’re busy with Brexit. 

After a recent change of administrations, we wake up one morning to hear that the new President launched a missile strike. 

President Trump and his team weighed the variables and decided that throwing 60 cruise missiles at Shayrat Airbase might produce the desired outcome – no easy task considering the dramatic shift in our new national security approach.  If the desired outcome is to demonstrate that business as usual is no longer in play in Southwest Asia, maybe it was achieved, again no easy task because of the international actors involved.  And, to reinforce the more aggressive American stance against rogue actors internationally, on April 8 the Pentagon said that a group of US warships is headed to the western Pacific Ocean to provide a physical presence near the Korean Peninsula, instead of sailing to Australia, as previously planned. 

Military operations are government supply chains in action on a massive scale.  As with any supply chain decision, launching a military action considers an array of variables other than cost.  Cost is just one factor considered in the context of national and global security priorities.  We can only hope that the decision to launch these missiles was made with a clear understanding of the cost of the cruise missiles, but also with a clear understanding of the desired outcome. 

Does it take a sledge hammer to kill an ant?  NO.  But if you do it once, especially when you are trying to overcome 8 years of destructive paralysis on the world stage, slamming Asad’s forces makes sense if it produces the desired outcome on the global stage.  Based on comments from the international community, the world seems to understand that the United States is again ready to lead in Southwest Asia.

There are too many actors, too many agendas, and until now the lack of a cohesive strategy reduced the United States to play tit for tat on the global stage in the past – with the Trump administration, should this missile strike be viewed differently?  The previous administration was unable to assemble a proactive integrated action plan across the functional silos, but with a new President, the United States may now be beginning to behave in a different way.  That said, we don’t know the behind the scenes thought process of the administration, but we can hope they are taking a different approach that includes synchronization across the silos.

But true synchronization across silos costs money.  In just one night of missile launches aimed at Syria, we threw almost $100 million of metal at one airbase.  According to the Washington Post, our total economic and development assistance to Iraq budget for fiscal year 2017 is a little over $300 million.  There is imbalance among the silos.

If this was a straight up logistics problem at an operational level, we’d have a cross functional response –not just a military response - defined to fix the problem.  In an ideal global geopolitical world, we’d have a similar cross-functional approach that cut across departments and nations, focused on Southwest Asia, orchestrated by somebody reporting up to the president, and integrating the capabilities necessary and available to meet the circumstance in Syria.  The current administration includes some very experienced individuals at the Cabinet level – let’s hope that they are working feverishly to overcome the ingrained silos of our federal government.

Is it too much to ask that government departments function the way we operate on the warehouse floor?  When it comes to government operations, why do we treat silos as a fact of life?  Reality suggests that we need a whole of government solution, but we just haven’t figured out how to do that yet, it seems.  Maybe there’s hope on the horizon.

Uncertainty stinks.

By Steve Geary | 03/22/2017 | 1:48 PM

Relationships around the world are shifting, which means that the logistician’s world is becoming more uncertain.  Some people make money from uncertainty, but in our world we earn profits by making uncertainty go away.  That’s getting harder to do.

Consider trade relations.  Where are things going to end up with China?  What is going to happen with NAFTA?  The United Kingdom is leaving the EU, and it is entirely possible after their next national election France will follow.  The President is endeavoring to suspend immigration from a list of countries, and that is bound to have some impact on trade.

These may seem like big picture issues that are only of interest on the Sunday morning talk shows, but what if your company moves things back and forth to border plants just south of Texas for ultimate sale in the United States? 

Those sorts of concerns run both ways.  “ ‘We’ve invested a lot into the US and it would be a pity if some protectionism did come up,’ said Robert Saller, managing director [Delo, a company of little more than 500 people], referring to fears that the US president will increase trade barriers and jettison trade talks.”

There are more dimensions to what’s going on in Washington DC than trade policy.  Other policy areas have direct impacts on logistics.  What about OSHA regulations?  How will shifts at the EPA impact coal mining, or pipeline construction?  What about foreign aid through the Department of State?  Is the logistics operating environment going to become easier or harder . . . and when?  Crystal balls are more essential than ever when constructing a logistics forecast.

We will leave the debate over the possible benefits or detriments of these policy shifts to others.  There has always been uncertainty in what we do, but somehow over the last 12 months it has started to seem like arbitrage instead of risk mitigation.  We’re logisticians, and we just need to know what the rules are going to be.

We can deal with uncertainty, but are we descending into chaos or simply witnessing a global realignment?  Either way, it’s going to be interesting.

Immigration policy, border practices, and lessons from the warehouse floor

By Steve Geary | 02/24/2017 | 1:43 PM

In February, in a headline, the New York Times said, “Crackdown on immigration faces logistical hurdles.”  Logistics appearing in a headline in the New York Times?  We’re coming up in the world.

The lead in the article read, “President Trump’s efforts to secure the nation’s borders and get tough on illegal immigrants, announced just days after he took office, now face serious logistical problems along with the legal challenges that threaten his ability to make good on a central campaign promise.”

So how should the nation approach the issue?  There is a logistical problem, just like the article asserts, but it isn’t at all clear that the article is tackling the right one.  It would make sense to think about it just as we would look warehouse performance - a cornerstone in any logistics network. 

Inventory control 101 says that the first thing to do is compare policy and practice.  If the published rules don’t match the practice, then something needs to change.  Either change the rules or discipline the process.

It’s pretty simple:  if policy and practice don’t match, the system doesn’t perform as well as it could. 

That’s the situation we find with immigration in the United States.  We have developed a set of shadow immigration practices at odds with the law.  We either need to bring the immigration processes into compliance with the law, or change the laws.  Unless we do that, we are going to face continuing dysfunction and confusion.

Back in the days when I ran distribution networks, no matter how much I loved my customers and my employees, we had locks on the facility doors and gates protecting the stockrooms.  The analogy is clear. 

Secure the domain to control access and maintain integrity, or not.  It is a clear choice for most businesses.  This may be simple minded, but there just don’t seem to be any reason why the nation’s borders should be any different.

Now, before people flood my email with screaming diatribes, I’m not saying I agree with the policy the President is executing or the laws he is following.  It just seems to me that he is trying to follow the rules that are on the books.  The United States is supposed to be a nation of laws and the President is applying the law, not ignoring it.

So, here’s an approach, the same as it should be for anyone who doesn’t like inventory policies in a warehouse.  Don’t complain about the policy to the people who are responsible for executing the policy on the warehouse floor.  If you don’t like a policy, or in this situation if you don’t like the current law, then take it up with the people who write the laws.

Call or write your representatives in Congress, the place where legislation gets written.  I’m sure they would love to hear from you, but do all of us a favor, don’t just criticize, offer a recommendation for a solution to your concerns.

Finding Common Ground: bringing operations and accounting together

By Steve Geary | 02/06/2017 | 12:45 PM

Special thanks to Matt Hunt of Sehlke Consulting for assistance with this column.

Where is the common ground shared by operations and accounting professionals?  In fact, it often seems as if operations professionals and financial managers are pursuing conflicting goals.  Peel back the layers and get to the core, and you quickly discover that the two communities overlap with a vibrant and vital set of shared interest.  They just don’t speak the same language.

A military unit, in a galaxy far, far away, was working on a vehicle that wouldn’t start. The maintenance mechanics launched the same processes that they were taught, because “that’s how they’ve always done it”. 

Ah, the danger of standardization . . . sometimes, it helps to think.

Most back yard mechanics would immediately go for the battery. Alas, the vehicle would attempt to start, which meant it was getting power. Maybe it’s not getting enough power. Okay, order and replace the battery, but no luck. One day and a few hundred dollars down the drain.

We’ve all seen this movie.  In fact, we might have starred in it, going down the same path ourselves in the backyard with the family sedan.

If it isn’t the battery, it has to be the starter, right?  Fine, order and replace that. This field unit is not authorized or trained to repair starters, so the starter is pulled and sent to a maintenance center for an overhaul. Send it back, and trade it in for a rebuilt unit.  More time and more money invested into getting the vehicle up and running, and again no luck. Still the vehicle is “dead lined.”

Fast forward three months, the amount invested into finally bringing this vehicle back to life and over $13,000.  It turns out that the only part that needed to be replaced was a $1.38 fuse.  New fuse, and it fired right up.

Now, I’m a logistics knuckle dragger myself, so I completely understand the path this crew followed.  In fact, I could see myself doing the exact same thing, and once the vehicle was up and running I would be proud, and I’d let the budget guys worry about finding the $13,000 to pay for it.

Fortunately, there are useful accountants and auditors in the world, and they really can be a friend.  The starter scenario was uncovered by a team of auditors, and their discovery triggered a review and revision of training and maintenance protocols.  The accountants and operators worked together, added some brain cells, and came up with a better way.

Accountants and operators need to be on the same team.  Find the common ground, the shared issues, and the world becomes a different place.  One set of management controls – properly defined, integrated, and executed – advances the business along two fronts, financial oversight and operations.

Management controls in the broadest sense include organization plans, methods and procedures adopted by management to meet its missions, goals and objectives.  These management controls also serve as the first line of defense against fraud and violations of laws, regulatory violations, and compliance with provisions of contracts and business agreements.

While logistics and financial management share many of the same objectives, the two approach them from different perspectives using different language. Both aspects of business require clean and accurate data. Both utilize internal controls to ensure that business processes are working effectively and discourage fraud, waste, and abuse. Both business practitioners want the same thing; provide the best support possible to the government.

The National Defense Authorization Act of 2010’s mandate requires the Department of Defense (DoD) to have audit ready financial statements by 2017.  It’s time to break down the wall between auditors and operators.  Together, they can get the books cleaned up.

The opinions expressed herein are those solely of the participants, and do not necessarily represent the views of Agile Business Media, LLC., its properties or its employees.

About Steve Geary

Steve Geary

Steve Geary is an adjunct faculty member at the University of Tennessee's College of Business Administration, and is on the faculty at The Gordon Institute at Tufts University, where he teaches supply chain management. He is the President of the Supply Chain Visions family of companies, and Chief Operating Officer at ROSE Solutions, consultancies that work across the government sector. Steve is a contributing editor at DC Velocity, and editor-at-large for CSCMP's Supply Chain Quarterly. He is listed in Who's Who in America, Who's Who in the World, Who's Who in Science and Engineering, and Who's Who in Executives and Professionals. In November of 2007, Steve was recognized for "Selfless Service to Our Nation and the People of Iraq" by the Deputy Secretary of Defense.



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