BENS Releases Defense Logisitics Agency Report
It is a time of shrinking budgets in the United States government; all agencies must learn to do more with less. Each year, nearly $20 billion dollars is expended by the Department of Defense for fuel related purchases and operations. The Defense Logistics Agency (DLA) approached BENS in 2012 for assistance in determining where improvements could be made in this fuel acquisition and provisioning process.
Over the course of six months, BENS members studied each aspect of defense-related fuel acquisition, storage, and distribution, drawing on their experience in industry and enterprise management. They analyzed previous sets of recommendations and pooled their knowledge to offer additional proposals of their own. In February 2013, BENS presented DLA with an extensive report aimed at improving the fuel procurement process.
BENS determined that DLA should, wherever feasible, switch from military-grade fuels to their civilian equivalents. This will increase the number of available suppliers and immediately cut costs. Furthermore, DLA should act faster to award its fuel contracts and work harder to maintain strong supplier relationships once these connections are made. Senior DLA leadership should also establish close ties with CEOs who have had previous experience in adapting their businesses to tighter, dwindling resource environments.
However, truly significant savings will only come after revisiting the fuel consumption of the individual Armed Services. The Services must be incentivized to make more efficient use of DLA’s vast distribution network – spanning more than 600 depots and storage points. Most importantly, the Services must reassess and reduce their total fuel requirements. These demand-side reforms are the only way DLA will achieve substantial savings above $100 million dollars.
BENS extends its thanks to Vice Admiral Mark Harnitchek, Director of DLA, for his interest and sustained involvement in this project. It also thanks DLA’s military and civilian staff, who worked tirelessly to educate BENS members about each element of their daily operations. Finally, BENS extends a warm thanks to its member participants, whose time and support made this project possible.
To read the entire report, click here.