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Clients challenge
The United States Transportation Command (USTRANSCOM) coordinates the logistics of
moving people and cargo from all around the world in support of military operations. It
has the huge and daunting task of synchronizing and coordinating end-to-end
distribution for the Department of Defenses (DoD) massive supply chain, and it strives to
make that supply chain as effective and efficient as possible for the two million people it
serves globally.
USTRANSCOM continuously strives to improve its performance in terms of both speed
and cost, but its a challenge. Implementing any improvement requires working with the
multiple organizations that have a stake in the supply chain and aligning all their
interests with the desired performance outcomes. The scale of the task is immense. When
the agency wanted to further reduce its costs while improving its effectiveness, it sought
expert advice.
PwCs solution
USTRANSCOM engaged PWC to identify opportunities to support its logistics and
strategy initiatives. The agency knew that PwC has had success in transforming large-
scale supply chain processes and asked us to analyze USTRANSCOMs supply chain and
then advise and support it on its mission to make it more efficient. There was no time to
waste; USTRANSCOM wanted actionable ideas within months, not years.
We assembled a balanced team that included experts who had commercial supply chain
backgrounds or had done commercial consulting before, as well as advisors who had
military supply chain experience. Knowledge of commercial leading practices was vital,
but adapting that insight into the militarys way of doing things was crucial because we
knew that simply trying to impose successful commercial processes in the military arena
A Logistics Overhaul
Yields a Billion Dollars
in Savings
The Department of Defense achieved both better
performance and remarkable cost savings when it
transformed its multi-billion-dollar supply chain.
Management Consulting
Public Sector
October 2013
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with professional advisors.
would never work. Instead, we focused on embracing the relevant commercial processes
in ways that would mesh with the militarys unique needs.
After working with USTRANSCOM to identify several strategic opportunities to improve
efficiency, PwC formulated almost 30 specific initiatives, two thirds of which focused on
cost savings, one third on performance. On the cost side, we took a hard look at
optimizing air and surface transportation, the cost of which represents 60 to 80 percent
of the entire DoD logistics budget. We identified where transportation could be improved,
primarily by analyzing how USTRANSCOMs logistics processes operated compared to
the commercial standards we understood well. We utilized relevant leading practices
from the commercial world and adapted them to the military environment, thusly finding
huge savings in improving utilization of transportation assets, making sure that every
plane or ship in transit was loaded optimally, and thereby cutting back on the total
number of shipments needed.
We also identified savings opportunities by analyzing the blend of transportation
conducted by military organic assets with commercial transportation assets. By reducing
overlap, USTRANSCOM was able to save hundreds of millions of dollars.
When it came to lean process improvements designed to speed up the supply chain, we
turned our attention to the countless requisitions that USTRANSCOM must constantly
process. We isolated groups of requisitions that were either moving slower than other
groups, or groups that were moving slower than requisitions would move in the
commercial environment. We used standard process analysis to see why requisitions
werent moving fast enough and then worked with the stakeholders to identify and
implement the necessary process changes.
Impact on clients business
Since we began collaborating with USTRANSCOM on designing and implementing
improvements to its processes and supply chain, we have achieved 10 to 30 percent
service-level improvements while simultaneously achieving nearly a billion dollars of
savings to date. Our ability to identify and deliver huge savings and significant
performance improvements has helped USTRANSCOM achieve its mission and serve the
Department of Defense more effectively than ever.
For more information, please visit
www.pwc.com/us/publicsector
Or contact
Phil Tombaugh
Principal
(860) 241-7522
phil.tombaugh@us.pwc.com