Breakthrough innovation, courtesy of the military. Part 1: the roots of containerization and intermodal transportation.

By Steve Geary | 07/26/2015 | 11:17 AM

When you think about innovative organizations, which one comes to mind?  Amazon?  Facebook?  Apple?

How about DoD?  The Department of Defense has been a relentless early adopter of new logistics technologies and strategies.  In the science and practice of logistics, the military – yes, the people who brought us the $435 claw hammer, the $640 toilet seat and $7,600 coffee makers – has throughout history often led the way in developing, nurturing, and implementing crucial tools and practices that have eventually proved crucial for the business world.

In logistics we make use of innovations, every day, brought to us by the defense establishment. Containerization and intermodal transportation are an obvious example.

Containerization and intermodal transportation are deeply imbedded in the way the world moves goods today. The commercial breakthrough for containers happened in the mid-50’s, brought about by visionary trucking executive Malcom McLean.   After building and selling a successful motor carrier operation, McLean Trucking, he purchased the steamship line U.S. Lines and led the way in developing the container ships shippers now take for granted.

McLean deserves enormous credit for that, but in fact, the initial development of containerized transportation came from the U.S. Army, driven by the exigencies of war.

In the latter part of World War II, the Army used something they called “transporters”-- standardized boxes that were really mini containers--to speed the loading and unloading of cargo ships going back and forth from Europe.  When the Korean conflict came along, the military started using the “transporters” for sensitive military equipment heading to the Pacific Rim.  In 1952 the Army began using the term CONEX, short for "container express," instead of “transporters.”  The first major shipment of CONEXes, containing engineering supplies and spare parts, moved by rail from the Columbus General Depot in Georgia to the Port of San Francisco, then by ship to Yokohama, Japan, and then to Korea, in late 1952.  

Innovations in military logistics will keep on coming, and commercial applications are sure to follow.  Delivery drones are already in use at the Marine Corps.  Driverless cargo trucks are being tested by the Army.  Field deployable 3D printing capabilities went forward in Afghanistan.

More ideas, still on the military drawing board, some in development, are certain to follow.  The Army is rolling out leading edge virtual reality combat simulators, to train people in battlefield conditions without an actual battlefield.  Perhaps we’ll train truck drivers the same way, taking a totally different approach.

What the military has learned over the years is that creativity by itself is insufficient, that better is sometimes not good enough.  The drive for different – innovating an entirely new approach – may be what is required to win the battle, or even the war. 

Earlier blog on military logistics innovation. 

No way to run a railroad. Or a passenger airline.

By Steve Geary | 07/15/2015 | 7:04 PM

Earlier this month, on July 6, the Department of Defense Inspector General released a report on something called the Patriot Express.  The Patriot Express is a program of scheduled international passenger flights for military and government personnel – and their dependents – operated by DoD using chartered aircraft.  According to a brochure published by Air Mobility Command, who actually oversees the program, these flights “operate the same as scheduled commercial airlines.”

The Inspector General (IG) had a pretty simple finding.  “Although the Patriot Express flights were not always the most economical mode of transportation for DoD personnel traveling overseas, the program is an integral component to support DoD readiness and force protection.”

Let’s peel back the first half of that sentence.

“The Patriot Express flights were not always the most economical mode of transportation.”  The IG examined six routes, and found that on three of them the Patriot Express flights were cheaper, and on three of them the commercial routings were cheaper.  But what is truly damning is the size of the difference.  The average savings on Patriot Express routings when they were the most cost effective option were a little over $550, while the average savings on commercial routings when they were the most cost effective option were about $800.

And why is that?  In the report the IG published some statistics on load factors.  Across the routes they examined, on average 41% of the seats were occupied.  You got that?  Better than half the seats flew empty.  When was the last time you were on a commercial flight with more than half the seats empty?

AMC may think they operate the same as scheduled commercial airlines, but there is one big difference.  If a commercial airline operated with half their seats empty, it would go bankrupt, fast.  That sort of market discipline is lost on the federal government.

The IG waves its hands and tries to justify the value of the Patriot Express.  “According to DoD guidance, through the Patriot Express Program, DoD offers peacetime business to contract carriers that participate in the CRAF [Civilian Reserve Air Fleet] Program to secure additional aircraft resources in times of conflict when airlift needs exceed the capability of military aircraft.”  In other words, the Patriot Express is a subsidy for airlines who pony up aircraft during a national emergency.

I'm a patriot, and I'm all for answering the call during a national emergency, but the IG's hand waving doesn’t do it for me.  I’ve been to the dance with the IG, and with the GAO, and if I tried to wave the flag instead of running the numbers they’d light me up.  Crunch the data and make the case for the subsidy.  Do the Analysis of Alternatives.  Run the cost-benefit analysis.  Construct the Business Case Analysis.

What we have is a passenger airline operated by the Department of Defense, designed as a subsidy for aircraft operators who participate in CRAF, servicing destinations that can be reached by commercial routes, and is more expensive than the commercial alternatives.  And, by DoD’s own load factors, it’s obvious that the operational efficiency – the load factors – is horrible. 

The justification the IG offers is that we want to be nice to the CRAF operators.  This is no way to run a railroad, or a passenger airline.

Air Mobility Command is a sister command the Surface Deployment and Distribution Command (SDDC), the very same folks we blogged about last summer who couldn’t keep track of service members’ cars that were being shipped back home after overseas duty.  Click here to read, “We haven’t lost your car. We just don’t know where it is,” or here to read, “It's been awhile, but it's good to have you back, Dave. Now find the darn cars.”

We should be ashamed of ourselves. Again.

By Steve Geary | 06/26/2015 | 2:52 PM

The 2015 “Supply Chain Top 25” is out, published by Gartner, Inc., for the 11th straight year.  It's a pretty good list, and I do make a point of checking it out every year.

The top five-ranked organizations in 2015 include three who were in the Top 5 last year — Amazon, McDonald's, and Unilever are in the top three slots — joined by Intel and Inditex.

Take a moment to look at all of the names in the Top 25, and think about what you don’t see.

  1. Amazon
  2. McDonald's
  3. Unilever
  4. Intel
  5. Inditex
  6. Cisco Systems
  7. H&M
  8. Samsung Electronics
  9. Colgate-Palmolive
  10. Nike
  11. The Coca Cola Co.
  12. Starbucks
  13. Walmart
  14. 3M
  15. PepsiCo
  16. Seagate Technology
  17. Nestlé
  18. Lenovo Group
  19. Qualcomm
  20. Kimberly-Clark
  21. Johnson & Johnson
  22. L'Oréal
  23. Cummins
  24. Toyota
  25. Home Depot

Year after year, I have the same question:  where are the Aerospace and Defense companies?  There isn’t single one on the list.  We used to see Lockheed Martin, but they disappeared years ago.  As military logisticians we have a mission to serve the warfighter, but we also have a duty to serve the taxpayer.

We can do better.  We are expected to do better.  We know how to do better.  So why aren't we doing better?

Click here to see last year’s blog on the Top 25.

I don’t like to pay for the same real estate twice.

By Steve Geary | 06/14/2015 | 5:45 PM | Categories: Film

I don’t think Patton ever said it, but it was in the movie so I’ll go with it.  We all saw the movie, I loved the line, and it fits the man.  “I don’t like to pay for the same real estate twice.”

Last week the President authorized sending another 450 troops to Iraq.  As reported by the Associated Press, as well as a bunch of other news outlets, the U.S. forces will advise the 8th Iraqi Army Division, based at al-Taqaddum, on a lot of things, including logistics, to help them develop a plan to retake of Ramadi. The U.S. will help forge connections between Iraqi security forces and Sunni tribes, assisting them in identifying and reaching out to Sunnis in Anbar so they can eventually work with the Iraqi Army.

I’m looking at my map of Iraq from the dark days, and there it is.  Al-Taqqadum, or TQ as my Marine friends used to call it, right on Supply Route Michigan, and a short hop from Route Mobile, just about halfway between Fallujah and Ramadi.  It brings back memories, and not happy ones.

As I think about what the Pentagon wants to do I’m overcome with immense melancholy.  I don’t like what's happening for the very same reason Patton wouldn’t like it.  I don’t like to pay for the same real estate twice.

It looks like we are going to try to rerun the Anbar strategy from the surge.  Establish the logistics, control the supply routes, and reach out to our Sunni friends in a classic counterinsurgency plan.  On paper it makes sense.

Except many of our Sunni friends - those who led the Awakening and helped us control the supply routes - are no longer available.  Some have thrown in with ISIS out of desperation because of how they have been treated by the Iraqi government in Baghdad.  Some have died in the conflict with ISIS.  Some are in hiding.  Others have escaped the country. 

To pull this strategy off, we are going to have to rely on our Iraqi allies to hold fast when required, and project power into a region that even challenged the iron fist of Saddam before the lid came off.

Patton has another great quote, “"Good tactics can save even the worst strategy. Bad tactics will destroy even the best strategy."  This quote doesn’t come from Hollywood, but from Patton himself.  Is the strategy that will spiral out of TQ into Anbar a good one?  Perhaps.  Is the Iraqi Army tactically capable of pulling it off?  We shall see. 

And what will happen if the Iraqi Army fails?  Are our sons and daughters going to be asked to pay for the same real estate twice? 

Click here to read more on Anbar.

More military, less logistics.

By Steve Geary | 05/17/2015 | 3:51 PM

The year was 2007.  I remember it like it was yesterday, so I’m sad today.

We were blasting across the desert, windows wide open.  No air conditioning, so you had to pretend that the desert breeze felt good.  I was listening to Route 66 on my iPod.  Wanted to believe that I wasn't miserable in the heat, willing to do anything to find a smile, even if it meant listening to Depeche Mode.   

Well if you ever plan to motor west

Just take my way it's the highway that's the best

Get your kicks on Route 66

We weren’t on Route 66, but we damn sure were heading west. 

You'll see Amarillo and Gallup, New Mexico

Flagstaff, Arizona don't forget Winona

Kingman, Barstow, San Bernadino

Would you get hip to this kindly trip . . .

My smile got bigger, and I chuckled.  Those little towns we were passing weren't on the list coming over by ear buds, this wasn’t exactly kindly territory, but I was working up to getting hip to what was going on.

I was a middle-aged civilian in a Blackhawk helicopter heading into Anbar.  First stop Fallujah, ultimately bound for Ramadi.  Our team was going in to support the military with a bit of business know how.  A lot of people worked hard to make the Awakening happen, and many died, and I was proud to be a small part of it.

One of my friends sent me this picture.  It was the last thing you saw when rolling out the gate of the Forward Operating Base.  Marines have a way of communicating that is effective.  "Complacency kills."

View this photo

Somebody got complacent.  Ramadi fell this weekend.  People died. 

I’m sad.

Click here to read more about my time in Iraq.

I love the sound of breaking glass.

By Steve Geary | 05/11/2015 | 2:57 PM

A man shot headfirst through a glass ceiling this week, and I’m cheering.

General Paul Selva is a transporter.  He currently commands United States Transportation Command (TRANSCOM), and before that, he led Air Mobility Command.  Go back a bit in his career, and you’ll see that he was the Director of Operations for TRANSCOM.

Last week, President Obama nominated General Selva to be the Vice Chairman of the Joint Chiefs of Staff.   If you are not familiar with the military hierarchy, that’s the number two slot on the totem pole for those who wear the uniform.  It means that if confirmed, the General outranks the respective heads of each service branch.

If confirmed, he only needs to initiate salutes to the flag, the President, and the Chairman of the Joint Chiefs.  By tradition, he is expected to salute the select few who wear the Congressional Medal of Honor.  That is pretty heady stuff.

He’s the real deal, a highly competent officer who is also a military logistician.  One of our own has shot through a glass ceiling, and is now sits at the right hand of the Chairman.

Standing by for orders, sir.

Some things never change

By Steve Geary | 04/27/2015 | 5:33 AM

I recall during OIF/OIF the endless container wars.  Logisticians sent containers into Iraq loaded, and often the empty ones never came back out.  After 30 days, the carriers started levying detention charges, and with the number of the containers on the loose it added up fast.

Logisticians were tearing their hair out, and the budget folks were bouncing off walls.  The media even got involved:  every few years a story would hit the front page of USA Today, bemoaning the waste.

The case of the disappearing containers wasn’t that much of a mystery.  Load ‘em up with dirt, and containers made great berms.  Set them down in a Forward Operating base, and they became mini-warehouses.  Surround them with sandbags, and they became guard posts.  Cut a couple of windows, put in a door and hook up a generator and the container became a hooch.

Heck, I lived in one.

Turns out that there was a similar problem in the fall of 1944 in Europe.  The Allies had a terrible problem with port capacity before Antwerp opened, and cargo ships were stacking up at the ports.  Since they couldn’t fully unload them, SHAEF started using them as floating warehouses, just unloaded what they needed.

Eventually, hundreds or cargo ships were bouncing at anchor of the coast of France, while stateside they were screaming for the return of those same cargo ships.  Think the OIF/OEF container problem on a grand scale.

Finally, SHAEF was handed an ultimatum:  send back ships, or the US would stop sending supplies.  It took the involvement of General Eisenhower to break the logjam, and ships started weighing anchor and heading west.  The threat was taken so seriously by Eisenhower that some of the returning ships still had cargo on board.

Evidently coordinating the left hand and the right hand has long been a problem in the land of military logistics.  Some things never change.

A sign of rational thought returning to military logistics spending?

By Steve Geary | 04/14/2015 | 4:21 AM

Yesterday I went to Red Sox Opening Day at Fenway Park.  It’s just another one of those special things about Boston, and when I can get tickets, I go.  Tradition and heritage matter in Boston.  One of those traditions we have a soft spot for the Green Mountain Boys, and it connects to Opening Day. 

Today, the Vermont National Guard is collectively known as the Green Mountain Boys.  Their roots are in a militia formed in the 1760’s in southwestern Vermont.  In 1775, the Boys captured Fort Ticonderoga, and along with the fort came 59 cannons, with ammunition.

Over the following winter, the cannons the Boys captured were transported to Boston.  Today you can travel the interstates and make it to Boston from Fort Ticonderoga in a matter of hours, but back then it took months, yet  they did it.  Then, just like today, military logistics were vital.

In early March of 1776, the British forces in Boston woke up and found themselves staring down the tubes of a formidable battery of cannon installed overnight in Dorchester Heights.  Deciding that discretion was the better part of valor, on March 17 the British forces departed Boston for Nova Scotia. 

There are some traditions that are woven into the fabric of Boston.  Evacuation day is a public holiday still celebrated in Boston, and we owe it to the Green Mountain Boys.  We also love our Red Sox, and Opening Day at Fenway Park is festive celebration.  The Green Mountain Boys are a part of it.

Last year, in 2014, opening day was over the top, because the Sox hung another World Series pennant.  There was an orchestra on the field, step dancers at home plate- it’s still a very Irish City - the Dropkick Murphys laying it down, and an American flag completely covered the left field wall.

The one discordant note was the absence of the Green Mountain Boys.  Ever since I was a kid, they did flyovers at Opening Day.  Except last year, they didn’t.   The Air Force was no longer doing flyovers because of the budget squeeze.

The Airmen of the Green Mountain Boys still had to do their training flights, and it seems to me that it would have been pretty simple to schedule some training hours to coincide with Opening Day, but what do I know?

Boston is a pretty spirited place when it comes to tradition, and there would be a flyover, with or without the Green Mountain Boys and their F-16’s.  Instead of F-16’s, we were treated to a flyover of a couple of Coast Guard MH-60 helicopters.

This year, it seems that karmic balance is returning.  Yesterday, on a gorgeous spring day, after the worst winter Boston ever had, the Green Mountain Boys returned to Opening Day.  Welcome back, fellas. 

Let’s hope this is a bellwether of a return to rational thought in defense logistics budgets.  

Pay attention to the little things: keeping your supply chain clean.

By Steve Geary | 04/09/2015 | 7:53 AM

“Pay attention to the little things. Learn everything you possibly can about your supply chain. That’s the only way to keep a clean supply chain.”  This is advice from Scott Tannen, a co-founder of Boll & Branch.

You’ve probably never heard of Boll and Branch, but they have an interesting story to tell.  They sell bed sheets.  Can a set of sheets change the world?  By bringing economic opportunity and business to people in places of extreme need, and by policing their supply chain against labor exploitation they’ve created a supply chain that provides hope for thousands.

Scott works closely with an NGO called “Not For Sale.”  Not for sale protects people and communities around the world from human trafficking.  Industry participation is a critical element of their strategy.  Boll and Branch is listed as one of the “Companies We Love!” on the Not For Sale Website, because Scott knows that the textile supply chain is particularly vulnerable to human trafficking and he does something about it.

But it isn’t just an issue in textiles.  Slavery is wrapped up in almost every industry’s supply chain, including the military, tainting the food we eat, the clothes we buy, and the electronics that keep us alive.  (See earlier blog, The Dark Side of Military Logistics: Human Trafficking, March 28.) 

Supply chain professionals in the defense world obsess over counterfeit parts, but these professionals don’t think a whole lot about the people who are doing the stripping and recycling to “manufacture” the counterfeit parts.  Human trafficking and counterfeit parts are two sides of the same coin. After the international drug trade, trafficking of humans is tied with arms dealing as the second- largest criminal industry in the world.

Human trafficking is the recruitment, transportation, transfer, harboring or receipt of persons, by means of the threat or use of force or other forms of coercion, of abduction, of fraud, of deception, of the abuse of power or of a position of vulnerability or of the giving or receiving of payments or benefits to achieve the consent of a person having control over another person, for the purpose of exploitation.

That definition covers a whole lot of ground, and touches all of us.  Like Scott says, pay attention to the little things.  You’ll be surprised at what you see.

Boll and Branch may seem to be really different from the world we live in as military logisticians, but is it really?  Aren’t war zones full of people in extreme need?  Can’t we figure out how to use the spending we do – for our FOBs, for our transportation, for our supplies – can’t we do the same thing?  Are we really certain that our subs in the “non-permissive environment” aren’t dealing in shades of grey when it comes to labor, recruitment, and human trafficking?  Can we open our eyes and see that “counterfeit parts” are part of a bigger problem?

Can’t we keep our supply chain as clean as Boll and Branch?

The Dark Side of Military Logistics: Human Trafficking

By Steve Geary | 03/28/2015 | 5:43 PM

Walk through any forward deployed operating base and - if you’re paying attention - you’ll see people from around the world.  Not just coalition partners in uniform, but base support personnel.  There are always contractors from the US, from the host nation, from the Philippines, from Pakistan; from just about anywhere who are key contributors to activities like life support.

Life support is a military logistics activity, but are we always paying attention?  Are we really seeing?  Or are we guilty of looking the other way sometimes, pretending that we don’t see the human trafficking issues that can creep into the mix?

Clearly the Federal Government thinks we can do better.

At the beginning of this month changes to some Federal Regulations went into effect, adding additional requirements to existing human trafficking-related prohibitions in FAR 22.1700 and FAR 52.222-50. 

The US Government has a zero tolerance policy on human trafficking.  The government’s explicit goal is to prevent any trafficking in persons and to monitor, detect and terminate contractors and subcontractors who engage in prohibited activities.  The human trafficking requirements must be flowed down to all subcontractors. 

Contracts performed outside the United States worth more than $500,000 need a compliance plan and annual certifications of compliance.  The contractor must submit an annual certification - after conducting due diligence - that to the best of its knowledge none of its agents, subcontractors or their agents have engaged in any prohibited activities.  If any violations are found during the due diligence process, the contractor must take “appropriate” action.

Violations can have some pretty nasty implications, including removal of employees, termination of subcontracts, suspension of payments until corrective action is taken, loss of award fee, declination to exercise options, default termination of the contract, suspension or debarment.

Sometimes it takes a threat to the bottom line for some people to decide to do the right thing, so perhaps the threat of enforcement coupled with the potential of a nasty headline above the fold in the Washington Post will bring some focus.

I prefer to think that we are better than that, so the next time you are in a forward man camp, pay attention and really see.  It’s up to all of us to fight human trafficking, and it happens in our world.

You can make a difference.

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 Mike Rudolph

Mike Rudolph

Mike Rudolph is a recently retired Marine Colonel with over 30 years of operational experience, proven leadership, and management success in the logistics and supply chain management fields. He is an executive consultant with ROSE Solutions and the Supply Chain Visions family of companies - consultancies that work throughout the government sector. Mike led the Marine Corps Supply Chain and Life Cycle Management Center at Marine Corps Logistics Command - responsible for supply chain and life cycle management of all ground weapon systems, equipment, and reparable components, the depot maintenance program, and equipment prepositioning program. During 2004-2008, he served two tours of duty in Anbar Province, Iraq as the G-4 for Multi-National Force – West, supporting all combat operations and coalition efforts to revitalize Iraqi economic development and stability. Mike's efforts were recognized with the Bronze Star for his first tour and the Legion of Merit for his second. He was widely recognized as a visionary and innovator in the Marine Corps logistics community.


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