The Strategic Distribution Management Initiative and its effects on inventory levels and readiness

Abstract

Until just a few years ago, no organization was tasked with measuring overall effectiveness, design, or optimization of DOD's global supply chain management system. As a result, the Strategic Distribution Management Initiative (SDMI) was created as a joint venture between Defense Logistics Agency (DLA) and the United States Transportation Command (USTRANSCOM) charged with enterprise level redesign, streamlining, and optimization of the DOD global supply chain. This thesis examines the affects of the SDMI implementation on the Army's two maneuver divisions stationed in the Europe. Specifically, it analyzes affects of SDMI implementation on the eight supply support activities located within the two maneuver divisions in USAREUR. This thesis studies SDMI impacts on inventory levels; inventory turbulence in the SSAs during SDMI implementation; SDMI improvements with respect to readiness; and existing barriers to improving velocity. The research indicates that: (1) expected inventory reductions were not realized following SDMI implementation, (2) inventory turbulence consumes limited resources and is a lucrative target for further improvement, (3) there is no evidence that SDMI increased fleet readiness, and (4) backorder rates and time, along with sub-optimization of pieces of the DOD supply chain, are significant barriers to velocity that still must be broken through.