Transforming Material Management for Marine Corps Organic Repair Depots
Introduction
Aminad helped the Marine Corps dramatically improve the effectiveness of its organic repair operations. Through a rigorous, data-driven business case analysis, Aminad provided a level of visibility into on-the-ground operations and enterprise cost drivers never before seen by executive leadership. During the initial implementation, the Marine Corps booked $11M in annual savings and it expects to capture an additional $13M after implementation is complete.
Challenge
In 2017, Marine Corps Logistics Command faced growing pressure in how it managed material supply functions at Production Plants Albany and Barstow. The Marine Corps had yet to shift forecasting and stock control responsibilities to DLA as directed by BRAC 2005 and a later GAO review found the Marine Corps out of compliance. At the time, the bill for storage and distribution was rising rapidly from $9M to a projected $25M by FY20.
At the operational level, material moved through too many handoffs from wholesale storage to local retail operations to the artisan. This created inefficiency and excess touches before parts reached the shop floor. Leadership also lacked a single source of truth on dormant retail inventory, making it difficult to determine which inventory they could divest without impacting depot production.
Figure 1.—The bill that LOGCOM paid to DLA for storage and distribution functions was expanding rapidly.
Approach
Aminad led a disciplined business case analysis to replace anecdote and institutional judgment with fact-based decision support. Working closely with LOGCOM financial leadership, DLA J3, and DLA J6, the team defined DLA’s cost structure for supply, storage, and distribution, identified the primary and secondary cost drivers behind each function, and quantified where charges were not aligned to actual workload.
The analysis revealed that storage and distribution bills were being driven by the number of FTEs in co-located retail warehouses, even as depot workload and depot personnel had declined. That insight supported nine operational improvement areas and a recommendation to follow BRAC legislation by integrating LOGCOM’s supply function with DLA.
Aminad then supported a five-year implementation extending well beyond the initial analysis. The work included inventory rationalization, repair bill-of-materials improvements, depot IT transformation, standardized material management processes across both production plants, human capital strategy, workforce planning, financial modeling, and facilities planning.
Figure 2.—Over the three year period period to Aminad’s BCA, DLA increased staffing levels modestly, even as depot workload and depot personnel declined
Aminad’s Unique Value to the Marine Corps
Ability to drive a fast-paced, data-driven business case analysis and support long-term implementation
Subject matter expertise across the broad range of functional areas necessary for implementation
Integrated program management and change management throughout all phases of work
Impact
The analysis and implementation delivered significant measurable results. LOGCOM negotiated changes to how storage and distribution charges are developed and booked leading to an $11M annual reduction in costs. Aminad’s inventory analysis resulted in the disposal of nearly $75M of dormant inventory and the capture of millions in cash credits through DLA’s material returns program.
As implementation continues, LOGCOM expects to realize an additional $13M in cost reductions once supply functions are fully integrated with DLA, along with nearly $90M more in planned inventory disposal and capitalization. The Marine Corps will also move into full BRAC 2005 compliance and make a major step forward in Defense Department auditability requirements. Overall, the full program is projected to generate an 11x ROI five years after completion.
