Supply Chain Solution for

Agility to feed US Army in Iraq

Tarun Talwar
Ravi Parmar
Ravi Sinha
Background
• Around 1,50,000 US troops in Iraq.
• 100+ Dining facilities All across Iraq managed by another vendor.
• Dining Facilities have 21 day menu and place order Online every Week
using US Military systems.
• Agility receives orders, reviews and finalizes the order with the customer.
• Lead time given to Agility is 2 weeks and substitutes can be delivered if an
item is not available but 98% of the time compliance must be met.
• After finalizing, Agililty creates shipment orders for suppliers and the
operations of Agility receives and assembles the shipments.
• Agility delivers shipments every week on a particular day to the dining
facilities.
• The delivery is done through a convoy of trucks from Kuwait – Iraq border
under US military protection.
• The lead time for trucks to return to base in Kuwait is two weeks.
• Many a times trucks go missing, are bombed or held by the military.
• On receipt of delivery, the authorized person in dining facility matches and
signs the delivery receipt.
Background Cont….
• Agility raises invoices to US Military on the basis of the signed delivery
receipt.
• Agility can invoice at Cost (Material Cost) + 15%.
• US Military compensates for lost shipments lost in Iraq due to bombing or
abduction.
• Two types of Items are delivered, perishable (10%) and Regular (90%) .
• Fresh Fruits & Vegetables (FFV) to be LP (Locally Purchased).
• All have expiry dates. If expiry of regular items is less than 3 months, it will
not be accepted by US Military.
• When buying from suppliers, the minimum expiry date should be at least 6
months further.
• Approved list of 40 suppliers spread across US and they ship only in Full
Palates or Full Containers.
• Agility has the below technologies.
• Oracle ERP
• WMS
• Need to deal with EDI of US Military.
Issues in the business
Supplier End
 Lead time with suppliers is unreliable
 Problems with expiry date
 Damaged items
 Documentation issues
 No tracking of shipments
 Lack of Coordination

Customer End
 98% compliance must be met
 On Special occasions like 4th of July 100% compliance must be met.
 Unable to trace location of trucks in Iraq.
 Delays in trucks returning back to base.
Strategic Fit for Agility in US
Facilities :
• Higher Efficiency model.
• Construction of centralized very big size warehouses at 3-different locations (East,
West & South US) near ports.
• Freezing and cooling facilities.
Transportation :
• Higher responsiveness model.
• Use of company owned trailers and state owned railroads
• Freezing and cooling facility.
Inventory :
• Higher efficiency model.
• Low inventory concept with 15-day safety stock.
• FIFO
• Inventory based upon 80 / 20 Rule.
• Demand forecasting to specify min and max demand for 3- month.
Strategic Fit for Agility in US
Suppliers:
• Higher responsiveness model.
• Contracts to be revisited regularly.
• Regular supplier response meeting.
• Performance based contracts. Contract Revoke provision in contracts.
• Deputation of Agility trained employees at suppliers end (for avoiding defective
products, documentation, item code verification etc..)

Pricing:
• Higher responsive model.
• Re-negotiate prices with clause for quantity, quality and responsiveness.
Strategic Fit for Agility in Iraq
Facilities :
• Higher Responsiveness model.
• Construction of centralized very big size warehouses at 2-different locations (Jordan &
Kuwait) near ports and a small size warehouse at Turkey-Iraq border.
• Freezing and cooling facilities.
Transportation :
• Higher responsiveness model.
• Use of company owned transport vehicles.
• Freezing and cooling facility.
• Outsourcing to third party for custom clearance.
• Own Security arrangements for trucks.
Inventory :
• Higher responsive model.
• 21-day safety stock inventory concept.
• FIFO
• Inventory based upon 80 / 20 Rule.
Strategic Fit for Agility in Iraq
Suppliers:
• Higher responsiveness model.
• Local suppliers for perishable goods from Turkey, Kuwait , Jordan and Dubai.
• Contracts to be revisited regularly.
• Regular supplier response meeting.
• Performance based contracts. Contract Revoke provision in contracts.

Pricing:
• Higher responsive model.
• Re-negotiate prices with clause for quantity, quality and responsiveness.
Technologies
Integrated Supply Chain Management System
 Order & Procurement Management System
 Electronic Data Interchange (EDI)
 Exchange order information electronically.

Allows business transaction to occur in less time with fewer errors.
 Reduction in inventory by closely tying supply with actual demand.

Increased efficiency and Cost savings.

 Warehouse Management System (WMS)


Reduces inventory levels.

Increases labor productivity.
 Improves shipping and inventory accuracy.

Boost perfect order rates.
 Reduce direct operating costs and increase overall revenue.
 Radio Frequency Identifier (RFID)
 With uniform standards for international adaptability to complement the
Warehousing & Transportation.

Enables every member in SCM to have access to operational information in
time for better productivity and reduction in error rate.
Technologies Cont…
 Automated Vehicle Locator
 Uses Global Positioning System (GPS).
 Enhances Productivity- more trips, capital savings due to the
ability to better utilize vehicles, maintenance costs reduced and
thus general reduction of cost per vehicle.
 Better adherence to schedule, accuracy in monitoring and
coordination.
 Improved ability to control operations and driver performance
 Communications between drivers, supervisors, operators and
other staff improves.
 Enables faster location of vehicles and response to accidents.
 Better operational decisions towards detours due to sudden
developments like bad weather and accidents.
THANK YOU