Navy Tackles Service & Support Chain

Deploys Manugistics' solution in bid to improve inventory management, improve supply chain responsiveness

Rockville, MD  January 17, 2003  The United States Naval Supply Systems Command (NAVSUP) has deployed a service and parts management solution from Manugistics Group in a bid to improve its inventory management and reduce its inventory-related costs by as much as $100 million annually.

As part of NAVSUP's Supply Maintenance Aviation Re-engineering Team  Enterprise Resource Planning (SMART ERP) project, the Navy has implemented Manugistics' Service and Parts Management solution, which the provider said can help optimize asset performance and lifecycle, improving forecasting and reducing inventory and helping the Navy remain within its budget.

A joint venture between NAVSUP and the Naval Air Systems Command (NAVAIR), SMART ERP is a pilot program intended to replace outdated supply, maintenance and financial management systems with a modern, responsive, accurate and integrated system. SMART ERP is intended to improve parts management by providing total asset visibility, increasing inventory modeling capability and facilitating data sharing among commands. The project is replacing 1960s-vintage legacy supply, financial and maintenance systems.

In addition to Manugistics, NAVSUP and NAVAIR are working with technology consultants EDS and Deloitte on the project. Initial pilot participants include approximately 400 users at the Naval Inventory Control Point, Mechanicsburg and Philadelphia, Pa., the Fleet and Industrial Supply Center (FISC) in San Diego, and the Aircraft Aviation Intermediate Maintenance Detachment and Regional Supply Office (RSO) in Norfolk, Va. The Defense Finance and Accounting Service, Norfolk, is providing accounting support.

The SMART ERP team worked with Manugistics and the consulting team to design an optimized service and parts management plan based on a constrained budget. NAVSUP is now live with a demand forecasting and buy/repair solution, providing a single sign-on environment within which Navy item managers have access to a variety of data necessary to carry out their jobs.

The Navy first put the SMART system to the test on January 3, when aviation storekeepers from Helicopter Combat Support Squadron Eight (HC8), Norfolk, placed two orders into the SMART system for four shear bolts from RSO Norfolk. Within minutes of the order being initiated by the squadron, the SMART ERP system responded, the location of the parts was identified, a picking ticket was printed, and the proper financial and inventory transactions were performed real-time and all within a single, integrated system. Moreover, the HC8 technicians received the bolts within 30 minutes.

"Improving supply chain efficiency and responsiveness is a critical priority for our operations and is especially challenging given NAVSUP's complexity and large scale," commented U.S. Naval Commander Michele Burk of NAVSUP, who oversaw the Manugistics selection and implementation. "Our supply chain operations keep the U.S. Navy well-equipped, squadron by squadron. The advanced planning and scheduling capabilities provided by Manugistics can help ensure efficient, reliable service to meet unique squadron requirements and help us reach critical goals of reducing inventory, all within our budget parameters."

Burk said that when fully implemented, the SMART ERP project could reduce inventory costs and lower inventory management-related infrastructure expenses by an estimated $100 million annually.

The system can process requisitions (customer orders) through the Navy's supply chain, including issue decisions and capable-to-promise (CTP) information; provide a five-year time-phased buy/repair plan constrained by optimized fiscal year budget dollars; provide item-level repair lead times, procurement lead times and survival rates based on historical observations; and optimize statistical safety stock/sparing level to meet specified performance goals.

NAVSUP is counting on the solution to allow it to provide its leadership with real-time data to support better-informed decisions and establish new levels of accountability.

"This pilot program is a significant milestone and the beginning of a revolutionary change in Department of Navy business practices," said Kevin Fitzpatrick, SMART ERP's program executive at NAVSUP. "SMART ERP will allow our leadership to make better decisions based on real-time data and achieve a level of accountability we have never had before with our current legacy software."

The SMART ERP team was established to work continually to improve its business with the benefits of technology while reducing the cost of products developed internally. "We recognized that by selecting Manugistics' S&PM solution, we would be able to capitalize on the product development and maintenance infrastructure already in place and driven by the many private and public sector clients who use Manugistics software, rather than devoting valuable internal resources to software development and maintenance," continued Burk.

For more information on how the U.S. federal government is using technology to streamline its acquisition processes, see "e-Pluribus Unum: Uncle Sam Wants 'e,' Or Does He?" in the June/July issue of iSource Business.

For more information on solutions for the service and support chain, see "In the Field and All Grown Up," the "Net Best Thing" column in the June/July 2002 of iSource Business.

To learn more about how the private sector is using service and support chain solutions, read "At Your Service," the "Links" column in the April/May 2002 issue of iSource Business.