Case in Point: Business Systems Modernization (BSM)

Why BSM?  DLA’s Standard Automated Materiel Management System (SAMMS) and Defense Integrated Subsistence Management System (DISMs) were legacy, vintage mainframe applications that lacked the modernized robust interoperability, functionality, and technical capabilities required to support the warfighter going forward.

What Is BSM? BSM is the core of DLA’s enterprise transformation and fully supports the DoD BEA and the Joint Vision 2020 Concept of “Focused Logistics” – an Agile Infrastructure for Logistics. BSM is DLA’s major acquisition program for re-engineering its business processes to adopt best business practices with COTS software. BSM incorporates best supply chain practices, creating process integration with customers and suppliers while re-shaping its internal structure to better focus on warfighter needs. It is a successful Enterprise Resource Plan (ERP) and Supply Chain Management system linking the entire supply chain from warfighter order through delivery.

BSM customers include:

• Military Services and other Government Agencies
• Approximately 20,000 DLA workforce users
• 30,000 registered commercial suppliers

With an investment of approximately $750M, BSM is delivering:

• A major re-engineering effort crossing multiple DoD supply chains (e.g., subsistence, construction, medical, etc.) to provide greatly improved end-to-end materiel, financial, and procurement management)
• The first DoD ERP implementation replacing DoD Agency-wide core business processes
• An operationally effective system supporting the warfighter

How does BSM Support DoD Business Transformation?

• Improved Processes/Mission Impact - DLA re-engineered business processes and created a new organizational structure:
  • Material Release Order (MRO) processing time improvement -- Receipt of requisition to release of MRO:  +/- 275 minutes in BSM vice 12 hours in legacy system
  • Enhanced customer and supplier support by establishing customer-facing and supplier-facing organizations
  • Employees are trained for new jobs and placed in the new organization with focus on customers and suppliers
  • Enormous cultural shift managed with a robust change management program to prepare employees and assess organizational change readiness at various stages of BSM implementation
• Benefit to a Broad User-base - BSM successfully used in DLA core business processes since July 2002
  • Order Fulfillment - Over 8.1 million customer orders processed/nearly $10B in annual sales
  • Procurement - Over 2,458,000 purchasing requests processed in SAP/nearly 2,052,000 purchases
  • Finance - 9.1 million customer billing documents Issued/~211,000 vendor payments/~ $7.5B paid to vendors
  • Inventory value being managed within BSM is over $10B
• Cost Avoidance/Savings – BSM inventory and operational savings are projected as:
  • $764M in future inventory reductions
  • 15% improved forecast accuracy and reductions in administrative lead time
  • Automating manual tasks allows DLA to reduce its workforce by 500 FTE’s resulting in $500M in savings
  • BSM operations costs are expected to be $393M less than legacy operations costs over a 10-year period
  • DLA will improve its financial accountability and achieve, for the first time, an unqualified audit assertion
• Net-Centricity/Information Delivery - BSM incorporates all DoD requirements for interoperability, Information Assurance, and compliance with the Global Information Grid and the Net-Centric Data Strategy