Pentagon targets supply chain for savings

on Thursday, June 28, 2012

Pentagon targets supply chain for savingsAccording to a report released by Deloitte Consulting LLP, military spending on maintenance of equipment, supplies and transportation is estimated to be close to $150 billion, causing some to research how those costs could be cut and the money reallocated for other areas.

Vice Admiral Mark Harnitchek, director of the Defense Logistics Agency in Fort Belvoir, Virginia, stated that saving money spent on military operations is tough, according to National Defense magazine.

“Our theme for the [fiscal year 2014] program budget review is to reduce cost and improve support,” Harnitchek told reporters on June 27 at a breakfast meeting, adding that bloated inventories will be cut before they target cutting staff for savings.

Over the next five years, Harnitchek has directed the Defense Logistics Agency to cut $10 billion in costs, which he says will be a challenge, National Defense stated.

Military deployments will not be figured into the cost savings.

According to a poll recently conducted by business consultancy Oliver Wight, a market-driven supply chain is a significant concern for businesses. The Pentagon may not have to be responsive to a consumer base in the way a retail operation might, but it faces many of the same challenges confronted by businesses. Overbuy of supplies and overspending on fuel could be two issues addressed to achieve the ambitious agenda, according to the write-up in National Defense.

0 comments:

Post a Comment