Material Flows And Inventory Policy During Military Scm

1484 Words May 1st, 2016 6 Pages
Material Flows and Inventory Policy in Military SCM
According to Major Joshua M. Lenzini in his article Anticipatory Logistics: The Army’s Answer to Supply Chain Management, “Supply chain management is similar for both corporate and military organizations. However, some significant differences are evident in these models. The first is the absence of maintenance on the corporate model. Another is that transportation, distribution, and warehousing are unidirectional in the corporate model but dual directional in the military model (see Figure 3, Lenzini, 2002)).” This backward flow is called reverse logistics, and although it is not unique to military supply networks it is uniquely critical.

Figure 3: Schematic of differences for
…show more content…
militaries. However, for both military and commercial entities supply chain management provides tools to maintain and improve operations relative to the underlying objectives.
In the private sector, the objective for the companies in a supply chain is to maximize profit, with the various organizations both competing for shares of this profit and collaborating to maximize total supply chain profit. Maximal profit comes from the combination of service that produces the best combination of revenue (sales and price) and cost to serve. Consequently, the management of material flows and inventory for a commercial supply chain can be conducted with the objective of maximizing profit. For militaries, the objective is to find the right combination of creating/maintaining capability (or readiness) at given cost levels. There are three forms of a possible objective function flowing from this general form: maximize defense capability given a budget, iteratively adjust the budget until the perceived value of capability equals the cost, or minimize the budget to provide a defined level of capability. In this objective statement, readiness is the constraint, with the goal of minimizing total cost subject to this constraint. The risk element
Open Document