Logistics system starts operational tests

'We are in essence test-driving the system before we fully implement it throughout the entire enterprise.'

'David Falvey, Program Executive Officer, Defense Logistics Agency

Henrik G. de Gyor

The Defense Logistics Agency will finally phase out the first of its two antiquated systems later this year, removing what auditors saw as a major obstacle to the military's modernized model for doing business.

In October, DLA plans to pull the plug on the Defense Integrated Subsistence Management Systems, one of its two 1960s-era, Cobol mainframe systems. The upgraded hardware and software of DLA's Business Systems Modernization project will run in its stead.

The next step will be to phase out the Standard Automated Materiel Management System, scheduled for 2007. The replacement will complete the agency's transition to BSM, which has struggled in recent years to meet the vision of warfighting laid out in the Joint Chiefs of Staff's Joint Visions 2020 plan.

A June 2001 report by the Government Accountability Office, formerly the General Accounting Office, said DLA's modernization lacked a guiding enterprise architecture, which would keep the blueprint from meeting the Joint Chiefs' goals of cross-service interoperability, computer network defense and improved logistics.

DLA responded by making significant changes to BSM. Today, there are new processes for the $741 million program, according to David Falvey, the agency's program executive officer within the Information Operations directorate.

In August 2000, DLA awarded a five-year contract for systems integration then valued at $390 million to Accenture LLP of Reston, Va. The agency also inked a deal for enterprise resource planning software from SAP America Inc. of Newtown Square, Pa., advanced planning and scheduling software from Manugistics Group Inc. of Rockville, Md., and Procurement Desktop Defense applications from American Management Systems Inc. of Fairfax, Va.

'All of the GAO recommendations were enacted, including establishment of an Enterprise Architecture Office and development of a DLA enterprise architecture aligned with the Defense Department's Business Enterprise Architecture,' Falvey said.

Gregory Kutz, GAO's director of financial management and assurance, strongly disagreed. In a report issued in May, he called BSM a flawed system with inadequate asset visibility over billions of dollars of Defense inventory. He said BSM's interfaces still are not operating properly.

'Users experienced difficulties in processing orders, resulting in incorrect information on customer orders, customer orders never being sent and vendor invoices not being paid on time,' Kutz said recently.

DLA response

GAO's comments primarily reflect problems during the concept demonstration phase that began two years ago, Falvey said. 'In any program as complex as BSM such issues will arise, and they were effectively dealt with under the existing requirements management and testing processes,' he said.

The Joint Vision 2020 plan requires agencies to use the Web to handle transactions. With its modernization, DLA wanted a system that would let clerks throughout DOD make supply queries and place orders online, improve delivery time and give commanders immediate access to stock information. The system is expected to cut costs, eliminate mistakes and reduce the time it takes to fill orders.

Since July 2002, the modernization program has been deployed to 390 users at DLA supply centers in Columbus, Ohio; Fort Belvoir, Va.; New Cumberland, Pa.; Philadelphia; and Richmond, Va.

Some of the functions users are being trained on during the limited deployment include financial management, procurement, order fulfillment, product data, and supply and demand planning. The users are managing 250,000 items for customers, and the annual sales of materiel processed through BSM for the demonstration are projected to be more than $300 million, Falvey said. When BSM is fully deployed, it is projected to handle $16 billion and 4.6 million items annually.

'We are in essence test-driving the system before we fully implement it throughout the entire enterprise,' Falvey said. BSM will eventually have more than 5,000 users.

Program officials originally targeted January 2006 for full operational capability of BSM, but moved the schedule back to the original date approved by the Office of the Secretary of Defense, September 2006.

Falvey said DLA is on target for its next major milestone: independent operational testing beginning in late July. After that, the agency will seek OSD approval to begin rolling out BSM in January 2005.

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