St. Louis Post-Dispatch
November 5, 2003
Pg. B1

By Rachel Melcer, Post-Dispatch

The U.S. military's transportation command is taking a page from the playbook of Wal-Mart, adding lessons learned by the likes of FedEx, and driving efficiency into the nation's most critical supply chain.

The command, based at Scott Air Force Base near Belleville, is responsible for moving the military's every bullet, blanket and battalion around the globe.

It oversees 1,365 aircraft, 131 ships and 2,216 railroad cars and related equipment. Its customers are scores of very demanding, high-ranking officers.

So the command, known as TransCom, is rolling out a new information-technology system - based on those used by private industry - to manage everything.

The $40 million, four-year initiative is known as Agile Transportation for the for the 21st Century, or AT21. Northrop Grumman Corp. of Herndon, Va., is the primary contractor.

The military's goal is similar to that of any shipping or distribution business: Move things faster, store less, save money and make the process transparent to earn customers' trust.

"The U.S. taxpayers want us operating lean and lethal," said Navy Capt. Stephen Honda, TransCom's chief of public affairs.

But the stakes are higher for the military than for industry, he noted.

"I've heard people say we're like a FedEx on steroids. But I don't think FedEx flies into Afghanistan (or) the South Pole. ... People don't shoot at FedEx," he said.

If TransCom fails to get a weapon or plane in place, people can die. Fighting an effective war, or keeping peace in hostile territory, requires soldiers who are fortified with rations and stocked with appropriate gear.

"We're effective today, but not always efficient," said Keith Seaman, the civilian chief of the operations integration division. "We want to be equal to or better than (business). ... We want to take their best ways of doing this" and adapt them to military demands.

The military traditionally stocked lots of things, just in case. It can't risk missing a shipment of bullets or planes, so it may never get to the industry standard of acquiring and delivering items just in time. But it needs to be "just right," Seaman said.

Every day, TransCom is the host of an Internet chat with about 75 commanders from around the world, each with his or her own transportation requirements. TransCom must balance their needs with its capacity on land, sea and in the air.

AT21 is adding to the forum an interactive, computerized system using CoMotion software designed by a Pittsburgh-based company, Maya Viz.

The system analyzes and prioritizes orders, alerting TransCom when capacity on a given shipping day is reached. Participants will be able to click on icons to see what's on each ship or in each plane, where it must go and by what date.

They then can decide to take a crucial item by air, which is more expensive but faster than by sea. Or they can divide an order into parts moved by separate modes and on different dates, sure that the shipments will come together again as needed. They also can choose to augment the system with private-industry partners, such as shipping companies and commercial airlines.

Eventually, the software will suggest alternatives, Seaman said. "We're trying to make the right tradeoffs ... without making a lot of people come together (and do calculations) on the back of envelopes. We don't want envelopes anymore."

The system is being tested this month. The goal is to try it out in one global region in May, followed by a worldwide rollout.

It will feed off other AT21 initiatives, which include tagging items with radio-frequency ID chips for tracking.

And it will support TransCom's expanding role: In September, Secretary of Defense Donald Rumsfeld put the command in charge of the supply chain, from factory to foxhole. Since its 1987 charter, it had managed movement only from port to port.

"What ties all of this together and helps us get our job done is information technology," Honda said. "We're an IT organization."

So it is turning to the logistics and supply-chain software that have helped businesses for years.

Wal-Mart Stores Inc. pioneered IT initiatives that helped make it the world's top retailer. United Parcel Service Inc. has spent more than $11 billion over a decade on IT with a 10-fold return on investment; FedEx Corp. gets an 8-to-1 return, Seaman said.

TransCom doesn't work for profit. But if it can manage a 7 percent cost avoidance with AT21 - a modest goal compared with the 15 percent to 20 percent typical for industry - then the project will have paid for itself, he said.

Northrop Grumman is being paid $9.6 million in the first year, with the potential to earn $25 million over three years. It has a team dedicated to AT21 at the office it opened in June in O'Fallon, Ill. It also will use subcontractors - including St. Louis-based Asynchrony Solutions Inc., which provides network security.

Other contractors will bring the total bill up to $40 million. Experts say AT21 should be worth it.

The ultimate result should be "better service and lower cost," said James Campbell, professor of management science and information systems in the College of Business Administration at University of Missouri at St. Louis. He works with the campus' new Center for Transportation Studies.

"The good companies, the successful companies are doing it," he said. "The fundamental issues" are similar for the military.

Unlike years ago, when the focus was on a single, large enemy and identifiable threats, the military is dealing now with multiple challenges dispersed around the globe, Campbell said. That lengthens the supply chain and increases the need for good management.

Since Sept. 11, 2001, TransCom has supported the war on terrorism by moving 930,477 people, and cargo weighing 2.68 million tons - and those numbers increase daily, said Army Lt. Col. Scott Ross, chief of media.

"We have to be ready to go to anyplace and to more than one place," he said. "It's moving from a Cold War mentality to a go anywhere, any time mentality."

U.S. Transportation Command

Based at Scott Air Force Base, TransCom manages $1.4 billion worth of infrastructure, plus $54.6 billion in assets: 1,365 aircraft, 131 ships, 2,216 railroad cars and related equipment

Its total work force: 51,130 active military, 15,703 civilians, 85,980 guardsmen and reservists

On its busiest days, it handles: 544 air missions, 129 ships under way, 10,000 ground shipments

It spends $7.5 billion a year in peacetime services. The global war on terrorism added an estimated $5.8 billion in fiscal 2003.