Why the Navy supply chain needs an end-to-end visibility strategy now

The Navy supply chain urgently needs digital transformation to create better end-to-end visibility and prevent bottlenecks.

Three questions to ask

• How can the Navy achieve greater end-to-end supply chain resiliency?
• How can the Navy adapt its operating model to better sustain forces in a contested environment?
• What lessons can Department of Defense (DoD) leaders learn from the private sector to improve end-to-end supply chain management?

Fleet commanders do not have the visibility they need into the US Navy supply chain for munitions, food and other essential classes of supply. This lack of visibility creates a critical readiness gap and ultimately prevents commanders from making agile decisions with knowledge of the end-to-end supply chain.

As geopolitical and cybersecurity threats mount, Navy leaders need supply chain processes and information to operate with speed and scale. Currently, supply chain information is isolated in individual, stove-piped systems across ships, suppliers and fleet supply depots. As a result, nobody in this network has the complete, end-to-end view of critical logistics information to answer basic questions: How much do we have? Where is it? And when can we get it?

Data isolation prevents broader network analysis to create actionable information, insights and predictions about supply flow and bottlenecks. An enterprise-level approach is foundational to securely manage data and analytics for end-to-end supply chain visibility that supports warfighting in a contested logistics setting. Without end-to-end visibility to the supply chain, risk rapidly expands. With time, as adversary capabilities advance, battles could be lost.

The Navy needs two main things now to achieve the supply chain performance necessary to win in contested logistics scenarios: resiliency and culture change.

How the Navy can achieve greater end-to-end supply chain resiliency

Resiliency, in a Navy supply chain decision-making context, means having the agility and visibility to plan for scenarios and then mitigate challenges in real time, resulting in better decisions.

To achieve this resiliency, leaders must have access to real-time data with visibility of current supply chain performance to understand and anticipate developing problems and bottlenecks. The challenge for the Navy is that many entities own individual parts of the supply chain, and there is no central command and control function that identifies and communicates end-to-end supply and demand needs. After a mission is executed, leaders often are forced to wait for correct, up-to-date information due to the lack of real-time supply and logistics data. These frustrating delays can have serious military consequences.

However, delays can be reduced significantly by having a better understanding of the data that the Navy already owns. If the data is appropriately integrated, demand and supply scenarios can model critical risks and enable proactive action. Leaders can gain insights into potential disruptions before they even occur. The Navy should start this journey of supply chain transformation by implementing modern supply chain technologies with advanced analytics capabilities, such as a control tower and digital twins, and create the visibility that fleet commanders require. This is crucial given the likelihood of an increasingly contested operating environment for the Navy, making it urgent to move quickly.

Moving beyond manual process with a supply chain control tower

Today, visibility is created manually by fusing information from different sources into spreadsheets and slide decks, which is reactive and outdated by the time the commander is briefed. Instead, the Navy supply chain control tower could capture and use real-time operational data across the supply chain ecosystem to provide enhanced visibility and improve decision-making.

The supply chain control tower would also provide a secure data gateway to transfer on-premises data sources to cloud-based storage and perform data transformation. To improve the Navy’s supply chain operations, it’s essential to understand the available existing data, transition offline data sources to widely visible information repositories, and automate tasks to reduce the manual effort of high-impact tasks.

Enable scenario planning with digital twins

Another crucial capability for end-to-end visibility is the supply chain digital twin, which enables scenario planning, predictive analysis, and visualizations of potential supply chain disruptions around the globe.

The digital twin is built on real-time data, supported by advanced analytics and machine learning. Together with the supply chain control tower, it forms the foundation for future Navy end-to-end visibility.

How can Navy culture adapt to sustain afloat forces for longer periods?

Unlike most of commercial industry, which has more singular and direct authority over its suppliers and supply chain, the Navy supply chain is broken into functional components where the command and control (C2) structure and authority shifts according to each functional step of the supply chain. This creates massive inefficiencies and gaps that form break points in terms of authority, data and control. To develop a truly resilient end-to-end supply chain, the Navy needs significant cultural change that starts with C2 alignment across the supply chain.

The driver of this change should be a central military supply chain management decision-maker, a Chief Supply Chain Officer (CSCO), with access to the necessary information to keep the supply chain running smoothly while also ensuring that the Navy can operate forward and widely distributed. It wasn’t that long ago that organizations including the DoD did not have a Chief Information Officer (CIO), but then recognized the critical need for executive oversight of information technology strategy. It is time for DoD and the military departments to consider adding a new CSCO position to address the gaps and inefficiencies in the supply chain at an enterprise level. Commercial CSCOs face many demands to confirm that sourcing practices are secure, sustainable and diverse. Within the Navy, a CSCO would be charged with:

• Embedding end-to end visibility, simulation and risk monitoring in the Navy supply chain
• Bringing together the right people to design a more agile data network
• Securing alternative sources of supply for key items
• Developing a trusted and secure supply chain network and environment
• Introducing Industry 4.0 and digital capabilities and then scaling across the enterprise
• Removing costs by more efficiently utilizing inventory and suppliers
• Ensuring sustainable and diverse sourcing that can reduce Navy consumption and unburden supply chain and logistics; this can include recycling, upcycling and waste reduction without sacrificing mission readiness

With a central decision-maker driving these efforts, the Navy can securely expand end-to-end supply chain visibility, enhance the resilience needed in the face of crucial geopolitical crises, remove costs, and reduce waste.

Case study: What the Navy can learn from the commercial supply chain

There are urgent commercial lessons in culture change and adoption of end-to-end supply chain technology that military decision-makers can use to address supply chain and logistics challenges in global trade lanes. One example comes from DuPont, the global leader in the chemicals, plastics and materials industry that built its reputation over 200 years in part by anticipating what was to come next.

In summer 2020, as the global pandemic worsened, DuPont budgets were in flux and supply chain planning was a mounting challenge. The company needed a rapid, low-cost solution to equip planners with scenario-based insight into the business impacts of materials availability, demand fulfillment capacity, inventory and cost. “With the unpredictable changes in the global market, our planners were basically flying blind,” said Jared Guckenberger, DuPont Integrated Operations Continuous Improvement Director. “The systems we had relied on to anticipate what’s ahead were suddenly falling behind our business needs.”

A culture shift was needed to leave behind legacy tools and disconnected methods and adopt a customized digital platform that would support global, long-term aggregate supply plan generation, along with inventory and financial projections, for one of DuPont’s divisions. The new supply chain planning solution resulted in a digital platform that could facilitate “what-if” scenario modeling to save planning time and effort and build efficiency, consistency and predictability – all of which improve DuPont’s ability to produce and distribute its products.