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TESTIMONY OF
MAJOR GENERAL ROBERT T. DAIL
DIRECTOR OF OPERATIONS
UNITED STATES TRANSPORTATION COMMAND

BEFORE THE
HOUSE ARMED SERVICES COMMITTEE
SUBCOMMITTEE ON READINESS
UNITED STATES HOUSE OF REPRESENTATIVES

REGARDING
LOGISTIC TRANSFORMATION

 March 30, 2004 

Mr. Chairman, Mr. Ortiz, and Members of the House Armed Services Committee, I appreciate the opportunity to testify on the designation of the Commander, United States Transportation Command as the Distribution Process Owner (DPO) for the Department of Defense (DOD).

On September 16, 2003, the Secretary of Defense (SECDEF) designated Commander United States Transportation Command (USTRANSCOM), as DOD's Distribution Process Owner, charged with improving the overall efficiency and interoperability of distribution-related activities: deployment, sustainment, and redeployment support during peace and war.  In addition, the DPO serves as the single entity to direct and supervise execution of the strategic distribution system.

Prior to this designation, end-to-end distribution support to the warfighter was marked by a multitude of process and information technology (IT) challenges as identified in studies such as GAO report #GAO-040305R: Defense Logistics: Preliminary Observations on the Effectiveness of Logistics Activities during Operation Iraqi Freedom.  Essentially, DOD distribution was a series of stove-piped processes and information systems managed by several owners.  Such segmentation caused inefficiencies and drove DPO designation in order to promote enterprise solutions.  We feel that by naming a Combatant Commander to oversee the distribution system, the SECDEF sent a clear message: he does not want a bureaucracy trying to solve this problem.  General Handy has a clear mandate and is engineering transformational improvements to the distribution process.

As a Department, we're bringing our collective talents and ongoing initiatives together to forecast distribution requirements, synchronize the movement of cargo from a source of supply to a designated customer, and expeditiously respond to warfighter requirements.  The intention is to provide a "factory to foxhole" distribution system, linking the entire global DOD supply chain.

The DPO's focus area extends from the source of supply to a point forward in a theater as defined by the regional combatant commander.  Our focus is on improving the strategic and operational processes in order to improve support to the warfighter.  The DPO is not focused on research & development or the acquisition process, and we do not intend to get involved in the Service's traditional acquisition roles and responsibilities.  We plan to designate one enterprise architecture for the end-to-end process, establishing business rules to link sustainment and distribution systems into a data warehouse where supply requisitions and movement requirements are visible to distribution system customers.

To drive consistent change, we've established a supporting collaborative structure to aid in transforming DOD distribution.  The Distribution Transformation Task Force, as the name implies, crosses Service, combatant command, and agency borders, and extends from flag officer to action officer level.  This group will aid the CDR, USTRANSCOM in developing process and technology solutions that will transform DOD's end-to-end distribution system.  In conjunction with our partners, we've already started the process of transforming the distribution system.  We examined lessons learned and after-action reports from previous operations, solicited ideas and active support of the Office of the Secretary of Defense, the Joint Staff, Combatant Commanders, Services, and the Defense Logistics Agency in determining the road ahead.  All Department of Defense stakeholders have embraced the DPO designation with enthusiasm.  We've collaboratively determined the key issues, identified appropriate leads, and have begun work through a series of joint service teams to drive distribution process improvements. 

We responded to the combatant commanders' needs by focusing immediately on shattering the barrier between strategic and theater distribution.  Eliminating this distribution barrier will ensure the synchronized flow of resources to the foxhole, thereby eliminating previously identified inefficiencies.  We specifically targeted this because of the documented challenges with theater (not strategic or CONUS) distribution - it presents our greatest challenge.  The supply system in theater was weakened by significant problems:  the distribution system was fragmented with a lack of synchronization, multiple feeds of sustainment cargo came into the pipeline without an overall owner, and the system had to cope with non-interoperable information systems.  In other words, distribution lacked integration, prioritization of sustainment cargo, and effective end-to-end in-transit visibility.  To address these shortcomings, we fielded the CENTCOM Deployment/Distribution Operations Center (CDDOC), which deployed logistics specialists from multiple commands and agencies to Southwest Asia in mid-Jan 04.  The CDDOC mission is to help the United States Central Command (USCENTCOM) command and control theater distribution during the current rotation, which is scheduled to move 240,000 troops and over 1 million short tons of cargo by summer 2004.  This deployment and redeployment is the largest troop movement since World War II.

We deployed this first-ever joint Service distribution command and control function at the approval of the CDR, USCENTCOM to his area of responsibility (AOR) within 90 days of determining there was a need.  We'll use the lessons learned from this pilot to form the basis for an enterprise approach to manage strategic and theater distribution requirements and assets.  This forward-deployed operations center will confirm USCENTCOM's deployment and distribution priorities, validate and direct intra-theater airlift requirement support, monitor and direct intra-theater surface distribution support, adjudicate identified USCENTCOM distribution and intra-theater shortfalls, coordinate for additional USTRANSCOM support, provide total asset visibility and in-transit visibility for inter and intra-theater forces and materiel, and ensure effective theater retrograde.  The CDDOC has achieved considerable success during its pilot deployment, and I'd be happy to share some of these with you upon request.  As you will hear during the course of this testimony, we also have other initiatives underway to improve the distribution process.

While we certainly have more work to do in transforming DOD distribution, I must emphasize that we achieved incredible success during Operation Enduring Freedom and Operation Iraqi Freedom.  We're very proud that to date, the personnel of USTRANSCOM and our commercial partners have airlifted over 1,400,000 passengers and 903,000 short tons of cargo.  We've also managed the sealift of 2,500,000 short tons of cargo.  This generated a massive demand for in-transit visibility information from the Global Transportation Network (GTN).  During OIF, GTN processed an average of 1.5 million transactions a day more than the 2 million transactions we expected - this was also half a million more transactions than the anticipated peak demand.  With rapid enhancements, we were able to manage the unprecedented demand that approached 6 million transactions per day. 

The sheer magnitude of these movement requirements necessitates that we aggressively develop improved interoperable tools and processes to track our shipments from origin to destination.  In order to meet this demand, we now require detailed asset visibility on sustainment shipments before they sail via ocean liner.  DOD shippers have supported this rule and have provided over 90 percent visibility of container contents before vessel sailing, a 50 percent improvement over the visibility rate prior to enactment.  Air shipments consistently maintain an in-transit visibility rate of over 98 percent.  We use this information to successfully identify and inform the Regional Combatant Commander of high priority items en route to the area of operations.

To meet USCENTCOM requirements, we tracked containers en route to the area of operations using DOD automated systems (e.g., GTN, Worldwide Port System).  We also tracked high visibility shipments (e.g., Meals Ready to Eat, Unitized Group Rations, holiday meals) en route to the AOR through a process involving both shippers and ocean carriers.  This process provides timely and accurate (over 90 percent) visibility in tracking high visibility commodities from the United States to Kuwaiti ports.  However, we still have a lot of work to do in the area of asset visibility.  IT improvements will be crucial to success in this area once we've fully mapped out the process architecture we plan to follow.

Major logistics improvements can be made in the distribution system through the development of an interoperable IT backbone across the entire end-to-end distribution architecture from source of supply through intratheater distribution.  This would provide what we don't have today, where 200+ systems related to distribution contribute to the inefficiencies I described earlier.  This improvement will allow the warfighter greater reliability and predictability for sustainment. 

Because of the IT initiative's breadth and depth, we are looking at this incrementally.  We've begun by focusing on the movement of a single class of supply as a model to develop a standard methodology for examining the end-to-end distribution architecture.

We also recognize the need to work closely with Joint Forces Command, DOD's designated Joint Deployment Process Owner (JDPO).  As their title suggests, their area of emphasis is the call-up, sourcing, mobilization, and movement of unit personnel and their associated equipment, while the distribution process involves the movement of non-unit assigned sustainment supplies.  While there is a clear difference between the deployment and distribution processes, there are also numerous areas of mutual concern.  These processes can appear quite similar, but they are actually unique.  The commonality they share is that they both generally move using the same assets and the same movement pipeline.  Close collaboration between the two process owners is crucial.  Knowing this, we have begun a combined process owners' review of almost 700 activities and information exchange requirements between the two processes.  We'll then delineate all tasks that fall along the DPO-JDPO seam, identify linkages where we share task responsibilities and establish lead partner responsibilities in shared tasks with command interest.  The goal is to eliminate duplications and streamline activities between the two processes wherever possible.

Our objective is to improve customer confidence, so he knows he will receive the right item at the right place at the requested time.  This will preclude multiple orders of the same items which further congests the pipeline.  This confidence, coupled with the IT improvements I mentioned and the establishment of mutually agreed upon time definite delivery (TDD) standards, will reduce cargo delivery variance and build trust in the distribution system.  We're also working to gain control of the direct vendor delivery (DVD) processes that allow shippers to bypass the DOD distribution system and ship directly via other means into an area of operations.  While a decision to bypass the distribution system often seems efficient and effective at first glance, it actually further exacerbates the problem and many of these DVDs end up as frustrated cargo.  Although a DVD may be moving on the same aircraft as items moving within the Defense Transportation System, we do not have visibility of such items and they are impossible to prioritize and track.  They are (along with many other untracked shipments) moving independently and competing for the same airspace, clearances, and road space in theater.

The supply and transportation priority systems we use are archaic.  They had their genesis in the military of 50 years ago.  There are literally dozens of combinations by which any particular item can be ordered and shipped.  By streamlining this myriad of combinations, we can greatly reduce handling and processing times.  Every time our present system interrupts an item's movement to check priority or change mode, we've lost velocity.  Redesign of the priority code system would reduce the potential stoppages in movement required to adjust shipping mode or sequence.  Today's IT and transportation capabilities allow far greater velocity than was possible a half-century ago.  By designing a well-thought-out and unified ordering and shipment priority system, we can take advantages of our tremendous potential.

Over the past few minutes, I've mentioned just a few of the many immediate improvements we've made to DOD's distribution system since SECDEF named Commander USTRANSCOM as the department's Distribution Process Owner.  Although we are pleased with improvements to date, we still have much work to do.  In closing, please allow me to stress that we have a unique opportunity to use the capabilities and peer influence that a combatant commander brings to the table to transform our strategic distribution system into a single-faced, reliable, visible, and simplified strategic distribution system.  Our warfighters deserve no less.

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