This week, Senate Democrats continued holding oversight on the President's conduct of the war. Senate Democrats are united in their determination to hold the President accountable for his failed strategy in Iraq and to guarantee our veterans receive the care they earned, and deserve.
Tuesday, July 10th
Senate Committee on Homeland Security and Governmental Affairs
"From Warehouse to Warfighter: An Update on Supply Chain Management at DOD"
Improving the Department of Defense's supply chain management is critical to our national security, especially with our troops fighting in both Iraq and Afghanistan.
SEN. AKAKA: Supply chain management has been on the Government Accountability Office's high-risk list since 1990, and that's far too long. My good friend, Senator Voinovich, and I are dedicated to seeing this issue removed from the list. Since 2005, he and I have chaired three hearings on supply chain management, and this will be our fourth....
Supply chain management is critical in our security. It affects the safety of men and women in uniform who are currently engaged in two simultaneous conflicts in Iraq and Afghanistan. Even after these conflicts end, the effect of supply chain management will remain vital....
SEN. VOINOVICH: My continued interest in investigating and improving the department's supply chain management is guided by two principles. First, with a budget of well over $400 billion and resources and supply chain amounting to more than $162 billion, the department must be a good steward of taxpayer dollars.... Second, and arguably more important, given Operation Iraq Freedom, inefficient, ineffective and redundant steps within the supply chain can have a direct and negative impact on the warfighter. We must assure that the current supply chain system at the department has the ability to deliver the right items at the right time to the right place to our soldiers in the battlefield.
Department of Defense officials have been planning to meet the logistical challenges of the redeployment of forces from Iraq and Afghanistan.
SEN. AKAKA: When we eventually begin redeploying forces in Iraq and Afghanistan, this moment will present a significant logistical challenge since we have been there for several years now and moved many assets there. My question to each of the three of you is what planning, if any, have you done to ensure that we have the logistics capability to leave the theater and return our assets back to the U.S.? Mr. Bell?
Jack Bell, Deputy Under Secretary of Defense for Logistics and Materiel Readiness, Department of Defense (DOD): Yes, sir. It's obviously fair to say that we have extensive planning activities currently underway throughout DOD addressing that question. So that when the time comes and the decision is made to begin to draw down forces, that we will have put in place the capabilities logistically to do that in the right order with the right amount of equipment coming down in the right sequence. That effort has been underway for some time and is being discussed at all levels both in CENTCOM in Iraq, as well as the Pentagon.
SEN. AKAKA: General Schwartz?
General Norton A. Schwartz, Commander, United States Transportation Command: Sir, I would concur with that. I would say that our objective, and this is really Central Command's objective, is to execute a retrograde, the redeployment, whatever that turns out to be, with the same precision that we would execute a deployment.
To take you back a few years, during the rollup for Desert Shield/Desert Storm, materiel returned to the United States without good visibility, went to the wrong port. Materiel was lost. We will not repeat that exercise....
Lieutenant General Robert Dail, Director, Defense Logistics Agency: Sir, I would echo the comment that General Schwartz made about our entire focus would be on ensuring that we support Central Command's, Admiral Fallon's plans to execute whatever operations that he would undertake.
The Defense Logistics Agency is a largely contractual operation. So we have already begun planning about what kinds of capabilities we would need to increase to support a redeployment of some sort in the future.
While the Department of Defense has improved its supply chain management, many significant problems remain.
SEN. AKAKA: To begin, let me congratulate the Defense Department for what it has done well in supply chain management. I am very impressed by the progress made by the Defense Logistics Agency in implementing the Joint Regional Inventory Materiel Management initiative, or JRIMM, which has now been operational in my home state of Hawaii on Oahu. And it has been operating since August of last year. I hope that we will continue to see the benefits of jointly managing supplies regionally as JRIMM is expanded, in the Pacific Command and in other regions. I also want to recognize the progress made by the Transportation Command in implementing several forward-looking initiatives as it grows into its role as the distribution process owner.
However, having said all of this, there are several areas where I'm especially, especially concerned about. First, poor, poor container management continues to be a serious problem. At this moment, DOD cannot account for more than 50,000 containers in the Central Command theater. They are lost. They have disappeared. Many of these containers do not even belong to the military.
DOD also has thousands of containers that it's simply failed to return to the commercial owners who, in turn, charge the government late fees for getting them back. This has forced the Defense Department to buy them out. It has spent $203 million to buy out over 25,000 containers. Now it has thousands of containers that are its responsibility if it can ever find them. This is exactly the kind of waste that helps put this issue on the high-risk list.
Asset visibility cannot be fully achieved without adequate technology applied to the supply chain. The radio frequency identification initiation or RFID, in theory, will track every palette and every container from the warehouse to the war fighter. This capability has been in use in the private sector for years now, and has greatly improved inventory and visibility. While implementation of RFID continues to move forward at DOD, there is still a long way to go.
We also need to ensure that information systems involved with logistics can communicate with each other. Personnel in the field are being forced to find tedious, manual workarounds to exchange information between different computer systems. Computers working in joint operations cannot always automatically exchange needed data.
The Defense Department needs to formulate a unified, comprehensive strategy to address future logistic capabilities. It has been promised since we started these hearings that the department was working toward that goal. I am particularly concerned that the to be road map, which was supposed to provide the strategy, is still not complete, even though it was supposed to be released last February.
Without a long-term strategy, all of the links in the supply chain - the Defense Logistics Agency, the Transportation Command and the Combatant Commands are likely to end up with their own approaches, which may not be consistent. As chairman of the Armed Services Readiness Subcommittee, I know that failure to modernize business processes contributes greatly to all of DOD's high-risk areas. These areas also have to be removed from GAO's high-risk list.
The Department of Defense is taking steps to ensure that efforts to improve supply chain management continue smoothly once a new presidential administration takes office.
SEN. AKAKA: I'd like to end with a question about sustainability of the Department's efforts in supply chain management. In less than 18 months, there will be a new administration running the Department of Defense. What steps are you taking now to ensure that progress made so far doesn't end when the civilian leadership turns over at the Pentagon?
DEPUTY UNDER SECRETARY BELL: Thank you, Chairman Akaka. Several important steps we have underway. Number one, as a team here, we are focusing in our overall supply chain management efforts to institutionalize all of the key elements of the improvement program and you've heard different elements of that described today.
On a personal basis, within my shop, I have identified and designated a principal deputy, assistant deputy under secretary of defense, who is well known to you, Alan Estevez, who has been up and reported to you frequently, who will have the responsibility for managing the transition on the carry-through on all of the items that we have in implementation. And Alan, as you know, has been intimately involved in the whole supply chain improvement program during this period.
We are also working with the other commands to make sure that the elements that we need to have in place get sufficiently documented so that when there is a transition occurring in administrations, our plan is to have a transition handover book available for the new administration that identifies all the new initiatives and all of the key points of contact within the Department of Defense that are working on these initiatives.
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