9 April 2008

1. Base Realignment and Closure 2005 Supply and Storage Supply Process Review Committee (SPRC) Meeting 9 April 2008

2. DLA Director’s Focus • Extend the Enterprise • DLA employees, inventories, and logistic capabilities will be located forward • Connect Warfighter Demand with Supply • DLA will establish and manage seamless business process links between the Services’ materiel requirements and the source of the materiel – the American industrial base • Deliver Supply Chain Excellence • DLA will exercise responsible leadership by proactively collaborating with national supply chain partners in developing solutions that best support the warfighter BRAC drives us closer to end to end supply support for CLIX

3. BRAC 2005 Supply & Storageand DoD Logistics Base Realignment and Closure 2005 (BRAC 2005) Supply and Storage recommendations achieve economies and efficiencies that enhance the effectiveness of logistics support to operational joint and expeditionary forces They reconfigure the Department of Defense logistics infrastructure to improve support to the future force, whether home-based or deployed

4. BRAC 2005 Supply and Storage Overview Today BRAC Became Law 2010 2009 2008 2004 2007 2011 2003 2006 2005 Business Plans to OSD DoD Data Call Analysis Recommendations Implementation Supply Storage and Distribution CONOP Commission Study and Recommendation To President Implementation Depot Level Reparables Implementation Planning Implementation Complete Implementation Consumable Item Transfer DLA/ MRPO Established Presidential Review Congressional Review Implementation Privatization DLA J-39 Established

5. Supply and Storage Governance DLA –Business Manager Joint Oversight Corporate Board (Brief As Required) Supply & Storage Joint Cross Service Group Director, DLA Vice Director, DLA OEB (Brief As required) Materiel Readiness Component Advisory Group J-3/4 (COO) BRAC Implementation Group (Meet monthly) J-39/ MRPO MRPO - MRCAG Advisor

6. BRAC 2005 Supply and Storage Decisions Decision 35 (Recommendation 176): Depot Level Reparable (DLR) Procurement Management Consolidation Decision 43 (Recommendation 175): Commodity Management Privatization Decision 51 (Recommendation 177): Supply, Storage, and Distribution Management Reconfiguration DLR Procurement Pillar: Transfer procurement management and related support functions for the procurement of DLRs from the Military Services to the Defense Logistics Agency (DLA). Commodity Management Privatization Pillar: Transfer supply contracting functions for tires, packaged petroleum products, and compressed gasses from the Military Services to DLA. Disestablish (privatize) all other supply, storage, and distribution functions for these commodities. Strategic Distribution Pillar: Designate 2 DLA Distribution Depots as Strategic Distribution Platforms (SDPs), mirroring the 2 existing SDPs. Designate remaining DLA Defense Depots (DDs) as Forward Distribution Points (FDPs), focused on local customers. Consumable Item Transfer (CIT) Pillar: Transfer of function related to the management of consumable items from the Military Services to DLA. Maintenance Depot Supply and Storage (Retail Supply Operations) Pillar: Transfer all supply, storage, and distribution functions and associated inventories in the Military Service Maintenance Depots from the Military Services to DLA.

7. DLR Procurement Management Consolidation The Decision  • …realigns or relocates the procurement management and related support functions for the procurement of depot-level reparables (DLR) to the Defense Logistics Agency.... Post-BRAC Business Model • A Single, Integrated new DLR procurement management provider supporting all Service requirements by FY 11:  • A single face to industry for all new DLR procurement • DoD fully leveraging its DLR buying power • Reduced inventory • Commercial partners maintaining a single procurement management strategic partnership Saves DOD $ by leveraging all procurement buys and managing them within a single agency!

8. DLR Way AheadDetachment Stand-up Actions Completed Site Plan Drafted & in Coordination As of 7 April 08

9. Consumable Item Transfer (CIT)BRAC Language The Decision Services relocate consumable item budgeting/funding, contracting, cataloging, requisition processing, customer services, item management, stock control, weapon system secondary item support, requirements determination and integrated materiel management Inventory Control Point function to the Defense Logistics Agency • Updates long standing CIT initiative • Mission consolidation – reduces excess capacity A single, integrated consumable items manager supporting all Service requirements by FY ’11

10. Commodity Management Privatization • The Decision • Transfer supply contracting functions for tires, packaged petroleum products, and compressed gasses from the Military Services to DLA. Disestablish (privatize) all other supply, storage, and distribution functions for these commodities. • Saves management costs by transferring contracting functions to a single procurement agency-DLA • Saves facilities costs by eliminating storage function at CONUS facilities • Saves labor costs by eliminating receipt, store, issue functions at Distribution Depots • Reduces inventory investment Target of opportunity; reduce excess capacity; saves money!

11. Privatization and CIT Functions, Inventory, NSN Transfer As of 7 April 08

12. Supply, Storage & Distribution Reconfiguration Decision Reconfigure wholesale storage and distribution around four regional Strategic Distribution Platforms (SDPs). Realign remaining DDs as Forward Distribution Points (FDPs) and consolidate their supply, storage, and distribution functions, and associated inventories with those supporting industrial activities such as maintenance depots and shipyards • Strategic Distribution Platforms • Distributes workload on a regional basis • Satisfies wait time requirements • Improves strategic flexibility and surge options • Maintenance Depot Supply and Storage • Consolidates all supply and storage functions at maintenance depots and shipyards • DLA responsible from receipt of requirements to delivery to mechanic • Reduces unnecessary duplication – functions & inventory Enhances expeditionary force deployment and sustainment readiness Reduces excess capacity Eliminates unnecessary redundancy

13. Vision • Extend DLA’s core capability of managing supply chain processes closer to war fighter • Focus on weapon system support • Implement integrated demand and supply planning, sourcing, delivery, and disposal to produce point of consumption effects DLA / ICP’s Suppliers DLA, USTC, DTCI and Distribution providers Joint Forces / COCOMS Provide Service Support Meeting Time-Based Obligations

14. Stock Positioning StrategyDLA Forward • Provide direct logistical support to depot production: • Provides supply, storage, and distribution support directly to industrial customers • Provides prepositioning of stocks as required by the industrial customers…based on production driven demand plan • Part request routed to closest hierarchical location and filled • DLA Supply Chain Owner (SCO) is responsible for support • DLA Site Commander: • Reports to the SCO • Responsible for day-to-day site operations • Provides single face to the customer

15. Stock Positioning StrategyAlignment of CONUS Customers Susquehanna Puget Sound Columbus Tobyhanna Hill Richmond San Joaquin Norfolk Cherry Point Barstow Warner Robins San Diego Albany Oklahoma City Anniston SDP Corpus Christi Jacksonville FDP Network locations are stocked independently based on customer defined requirements

16. Military Service SS&D Functions and Inventory Transfer As of 2 April 2008 Actions Completed

17. Mitigating Implementation Risk • Where is-As is -- provides a trained/ready workforce upon transfer • Revised DLA policies -- account for many of depot current practices… protection of stocks, materiel returns; minimum necessary, etc. • Single face to customer – DLA Site Commander has access to all DLA activities for immediate customer support • Providing more tools/data to forward positioned DLA employees -- rapid response to customer needs • Implementation IPTs co-lead by Military Service and DLA • Implementation -- rolling out AF, then Navy, MC and Army. Lessons learned captured and applied as implementation continues • DLA Director, as well as direct reports (staff and field commanders) personally involved in successful BRAC law implementation Weapon system and readiness based requirements determination

18. Way Ahead • Demonstrate DLA Spirit – Forward Presence • Standardization/synergy across all ALCs • Decisions made at point of effect • Metrics will evolve as we continue to track • “When performance is measured, reported, compared and rewarded…it becomes exceptional” • EBS Forward • Process Improvement…transition to new personnel • Interface with Service ERPs (continue to partner on their blueprinting efforts) • Emphasis on cross-Military Service collaboration Implement Enterprise Solutions