By Debra ValineJune 24, 2019
When Gen. Gus Perna, commander of Army Materiel Command (AMC), visited Security Assistance Command March 18, he emphasized that foreign military sales should not negatively impact the Army's supply chain.
The meeting at USASAC's headquarters continued an AMC effort - formally known as the Demand-Planning Integrated Planning Team - to improve the way AMC plans for and executes surges in sustainment support for training or major deployments. Although foreign military sales usually aren't part of these exercises, any unanticipated foreign military sales demands could stress the logistics support process.
As a result of this meeting, Perna tasked USASAC, a subordinate command of AMC, with finding ways to avoid impacts to Army readiness from foreign military sales requirements.
"USASAC found instances where foreign military sales demands may have been filled more on a first-in, first-out basis instead of accurately following the existing Army regulatory guidance," John Neil, director of the Performance and Process Management Office at USASAC's site in New Cumberland, Pennsylvania, said. "We can help Army prepare for FMS (foreign military sales) cases without impacting the supply chain."
The goal is to provide maximum flexibility to the item managers at each of the life cycle management commands to appropriately plan, acquire and fill foreign military sales demands, without affecting Army readiness. (The item manager is the person within each DOD service who manages all aspects of the materiel that is assigned to them.)
Army foreign military sales is a six-step process:
• Allies and partners submit a letter of request to USASAC for arms, defense equipment, defense services and military training.
• These requests are coordinated with the geographic combatant commands and the U.S. Department of State.
• The case is developed, which includes defining requirements, quantities, delivery, payment schedules, etc.
• A letter of offer and acceptance is submitted to DOD's Defense Security Cooperation Agency. After it is approved, it is sent to the requesting country.
• In some cases, congressional notification and approval may be required.
• After the U.S. government and the ally or partner sign the letter of offer and acceptance, the ally or partner must provide initial funds for the case to officially begin.
USASAC personnel oversee all cases from cradle to grave.
A USASAC working group, led by Neil, developed eight initiatives that will achieve Perna's goal. The working group includes supply source
management personnel from the security assistance management directorates, the life cycle management commands and the Defense Logistics Agency.
Initiative 1 encourages FMS customers to use the Cooperative Logistics Supply Support Arrangement Program. This program is an agreement between a military department and a purchaser that sets forth the terms and conditions under which DOD will supply spares for common weapon systems on an equal basis with U.S. forces.
Initiative 2 developed a dashboard that allows life cycle management commands to analyze current and past demand to facilitate corrective actions and interventions. The dashboard compares Army supply availability and readiness drivers (identified by National Item Identification Numbers, or NIINs) provided by AMC to past foreign military sales shipments and current open requisitions. Readiness drivers are those items that are in short supply but critical to the operation of a weapon system - rotor blades for a helicopter, for example. A NIIN is a nine-digit code that identifies each item.
"The dashboard will be used by Army demand planners to review the historic release of FMS requirements to determine if they were planned for properly and whether they were released properly," Neil said. "The purpose is to determine whether the current regulation is being followed for the release of FMS requirements."
Although both of these initiatives have been completed, Neil said it will take a couple of months of tracking data to see what effect these may have on the foreign military sales customer or the overall readiness posture of the Army.
Initiatives 3 and 4 establish edits within the Army's database for foreign military sales, to allow more of the AMC critical materiel demands to be processed against a case that authorizes the materiel item managers to forecast the demands.
"The central case management team will determine if the requisitioning country has a cooperative logistics supply support arrangement case that could be used to requisition the materiel," Neil said. "If the answer is yes and the country agrees to the change, the team would advise the country to requisition against their logistics support agreement case. This allows the item manager to fill the requisition and also include that demand in the Army's planning and forecasting process, which should, over time, allow for additional stocks to be on hand to fill future requirements."
Initiative 5 establishes a process to assign an Army-coordinated lead time to each requisition for the NIINs defined by AMC to be problematic. This makes it possible for the item manager to acquire sufficient stock to meet the demand over time, rather than taking stock from existing inventory. According to Neil, this will allow the item manager the normal acquisition time to plan for, acquire the stock and fill the requisition without taking stock from on-hand inventory.
Neil said the remaining three initiatives are based on actions that could be taken by AMC leadership to provide weapon system spares to FMS customers.
Initiative 6 creates a "by exception" process to use alternative sources of supply to support new weapon system sales.
Initiative 7 creates a "by exception" process to require the use of Cooperative Logistics Supply Support Arrangement Program cases for sustainment on the sale of some new weapon systems. This will build better demand history for the systems as it is the only program allowed by U.S. law where the foreign customer's requisition history can be used to forecast demand.
Initiative 8 creates a "by exception" process to require contractor spares for the sale of some systems, to be determined by AMC.
Training is underway for country case manager teams on the new edits and processes for handling the specifics of the eight initiatives.
Foreign military sales may not be a large percentage of the overall spare parts requirements, but they can impact Army readiness nonetheless. The initiatives spelled out above illustrate that the AMC security assistance enterprise is leading the effort across the Army and the Defense Logistics Agency to minimize the impact of foreign military sales on the Army supply chain management process to support U.S. forces, allies and partners.
For more information, call John Neil at 717-770-4123 or email email@example.com.
Editor's note: This article was originally posted on the AL&T news blog at https://asc.army.mil/web/news-alt-jas19-tightening-the-supply-chain.