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DoD Should Combine Logistics Agencies: Panel

Jul. 28, 2011 - 03:45AM   |  
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The Pentagon should consider creating an organization that would oversee supply, maintenance and transportation across the military in an effort to save money and garner greater efficiency, according to an influential advisory panel.

Standing up Defense Logistics Organization (DLO) - comprised of the Defense Logistics Agency, U.S. Transportation Command, and military materiel and maintenance shops - is the best of three options developed by a Defense Business Board task group after a review of the U.S. Defense Department's global logistics management.

"A single DLO would have the authority to undertake the actions necessary to rapidly increase logistics efficiency and effectiveness," a briefing on the plan said.

A "phased, sequenced effort" could be used to pull the organization together, Philip Odeen - chairman of the study and the non-executive chairman of AES, an international energy company and Convergys - said during a July 21 Defense Business Board meeting at the Pentagon.

The panel recommends a four-star general lead the organization.

DoD spends about $210 billion per year on logistics, including $112 billion in maintenance, $74 billion in supply and $24 billion in transportation, according to the briefing.

The DLO would not play a role in logistics policy, which would remain within the Office of the Secretary of Defense, Joint Staff and service logistics directorates. Design and acquisition of weapons would also remain separate.

DoD would need to address a number of critical issues to "implement a change of this magnitude," the briefing said. This includes legislative action, developing an integration plan and transition planning.

The DLO would provide a single point of responsibility, authority and accountability, according to the briefing. It would also maximize operational benefits and cost efficiencies in the shortest time once the structure is established and funded.

"In light of operational and budgetary pressures, the Task Group recommends the creation of a single Defense Logistics Organization to rapidly increase supply chain efficiency," the briefing states.

The other two less favorable options reviewed by the panel include the "virtual integration" of the current structure, and combining the Defense Logistics Agency and U.S. Transportation Command.

The options developed by the board would make the logistics system more efficient, in addition to saving money, Odeen said.

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