Supply Chain Management is a set of approaches utilized to efficiently integrate suppliers, manufacturers, warehouses, and stores so that merchandise is produced and distributed in the right quantities, to the right location, and at the right time, in order to minimize system-wide cost while satisfying service level requirements. [1]

 

Website: DoD Manual 4140.01 “DoD Supply Chain Materiel Management Procedures”

 

In the acquisition process, supply chain management requires Program Managers to collaborate with users (e.g., the force providers, the Combatant Commands, and the DoD Components of those commands) to determine optimal logistics strategies tailored to meet the users’ needs and expectations and should produce a Performance-Based Agreement codifying the negotiated user requirements and performance expectations. [2]

 

A few topics in the Acquisition Process that address supply chain management are:

• Analysis of Alternatives (AoA): It is important that the alternatives considered in the AoA should address alternative concepts for maintenance, training, supply chain management.
• Engineering, Manufacturing and Design (EMD) phase: addressing the manufacturing maturity is a key in achieving program objectives. Part of this assessment is understanding a contractors supply chain management and any issues that it might have.
• Milestone C:  Addresses key manufacturing readiness considerations include Supply Chain Management.
• Full Rate Production Decision Review:  Acquisition Strategy update, the Program should identify remaining supply chain management risks prior to a production go-ahead decision.
• Acquisition Strategy: Logistics and support requirements to include supply chain management as part of the Life-cycle sustainment plan.
• Life-Cycle Cost Estimates: Should incorporate supply chain management activities.
• Life-Cycle Sustainment Plan: Product support implementation status
• Supportability Analysis: Goes into the Life-Cycle Sustainment Plan
• Request for Proposal (RFP): Evaluation evidence for Supply Chain Quality Management is located in Defense Acquisition Guidebook (DAG) Chapter 11.3.3.1.2

 

Note: The May 23, 2003 DoD 4140.1R DoD Supply Chain Materiel Management Regulation was recently canceled and replaced by a new eleven-volume (11) series of DoD manuals entitled “DoD Manual 4140.01 DoD Supply Chain Materiel Management Procedures”.

 

Note: On Sept. 19, 2018, the U.S. Department of Defense (DoD) issued a corrected Class Deviation 2018-O0020, to remove the sunset provision in DFARS 239.73, “Requirements for Information Relating to Supply Chain Risk,” that was due to expire on Sept. 30, 2018. The deviation is effective immediately. This new deviation implements Section 881 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019. Section 881 made the requirements for supply chain risk management under DFARS 239.73 permanent by placing its authority under a statute (10 U.S.C. § 2239a). This reauthorization reflects the continual efforts by Congress and the DoD to increase oversight on contractors’ supply chain and use risk management as a metric for contract performance.

 

AcqLinks and References:

• [2] DoD Directive 5000.01 “The Defense Acquisition System”
• [1] Simchi-Levi and Kaminsky (2008) “Designing and Managing Supply Chain”, McGraw-Hill/Irwin 3rd edition
• DoD Directive 4140.1 “Supply Chain Management Policy” – 22 April 04
• DoD 4140.1R “Supply Chain Materiel Management Regulation” – 23 May 03

Updated: 10/5/2018