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Defense Logistics Agency Clothing and Textile Supply Chain

Update

March 16, 2007

Defense Logistics Agency

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Agenda

• Overview of Clothing and Textiles (C&T) Supply Chain

• Make up of the Industrial Base

• Investment Plan for FY 07

• Recent Outreach Efforts

• Virtual Vendor Management

• ACU Update

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The Big Picture

Customers / ItemsCustomers: 14,000 Orders: 3,600,000 / year Items: 31,000

SalesFY 01 - $1.0BFY 02 - $1.3BFY 03 - $1.7BFY 04 - $2.2BFY 05 - $2.2BFY 06 - $1.9B

ObligationsFY 01 - $1.1BFY 02 - $1.6BFY 03 - $2.8BFY 04 - $2.0BFY 05 - $2.0BFY 06 - $1.6B

PersonnelEmployees: 302 civilian

+ 8 Military + 2 Europe

+ 50 internsSuppliers: 858

Clothing & Textiles Supply Chain

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Sized items Example, Combat Boot – 133 sizes Men’s Army Dress Coat – 65 sizes Airman Battle Uniform – 155 sizes

Military unique Most clothing on a specification Service driven requirements Simple garments to complex protective clothing (Chem Suits)

Industrial Base – Strategic Supplier Issues Small Business driven Mandatory Sources

National Industry for the Blind (NIB) National Industry for the Severely Handicapped (NISH) Federal Prisons (UNICOR)

Socioeconomic Obligations (Hub Zones, 8(a), Set-Asides) Best Value Long Term Contracts

During peacetime, over 95% of our contracts are long term / best value contracts

Clothing & TextilesA Unique Commodity

Small Business $1011.24M

Large $386.69M

NIB $51.9M

UNICOR $93.3M

NISH $143.7M

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C&T Investment Plan FY07By Major Grouping

• Expenditure History– FY 05 = $2.088B– FY 06 = $1.613B– FY 07 = $1.70 B (planned)

– Anticipated that expenditures will level at $1.4B-$1.5B over the next 5 years

• Plan adjustments:– Based on actual sales– Customer collaborative

forecasts– New item introductions

FY07

Plan

Dress Clothing $165.1M

Field Clothing $492.9M

Individual Equipment

$581.6M

Organizational Clothing

$481.8M

Total $1,721.4M

Adjustments made thru the use of automated demand and supply tools

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C&T Investment Plan FY 07By Minor Grouping

• Dress Uniforms– Shirts & Headwear $29.0M– Outerwear $76.5M– Dress Uniforms $59.9M

• Field Uniforms– Accessories $126.1M– Camo uniforms $239.6M– Footwear $127.2M

• Individual Equipment– Heraldics $9.4M– Equipment Items $305.9M– Safety Items $127.9M– Tentage $138.4M

• Organizational Clothing– Chemical Protective $189.8M– Cold Weather Gear $117.6M– Gloves $69.7M– Special Purpose $104.6M

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• Meeting with Member Military Liaison Assistants 12 February 2007

• Working Group partnering with American Apparel & Footwear Association (AAFA)– Recurring Meeting approximately every 60 days. – Objectives of the effort:

• An assessment of specific C&T industry skill sets in jeopardy• The impact of those diminishing skills sets on the readiness • Once assessments complete, a timeline and a path forward

for preserving domestic production capability

• Summit with Industry and the Services to discuss requirements will convene in the next 60 days.

Recent Outreach Efforts

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Continuing the Dialogue

• Potential topics include:– Timeliness of contract awards & delivery orders– Protection against uncontrollable cost increase in

multiyear contract– IDIQ Min-Max ranges– Providing forecasts to Industry– Source Sampling and Shade Evaluation– Use of Supply Chain Manager– Review System for Better and Prompt Payment

Options– Continued support of domestic manufacturing laws

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Virtual Prime Vendor (VPV)• VPV is a logistics management system

• In operation since 1998 - excellent track record• Establishing a new Virtual Vendor Manager (VVM) at each Recruit Center

VPV Site

RTC/CIIP

Usechart

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1 MC San Diego2 MC Parris Island3 NTC Great Lakes4 Lackland AFB5 Ft. Jackson6 Ft. Sill7 Ft. Len Wood8 Ft. Knox9 Ft. Benning

1 Lion Vallen – All Army2 Travis NIB – AF& MC3 Peckham NISH – Navy

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2

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2

3

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7 8

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On Time99.2%

Late0.8%Not shipped

On time = No pay!

* Chart Represents 35.5 Months Of Operation

Travis VPV

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DLA continues to manage contracts with C&T Industrial Base

VPV Objective: Linking Supply and Demand