Defense Logistics Agency initiative on packaging supplies saves agency $33 million

As the Department of Defense and the Defense Logistics Agency continue to evaluate opportunities to decrease costs, DLA Distribution, a field activity, has found a way to do its part.

A joint team across DLA Distribution, made up of experts in packaging and packing policies, base supply, contracting and finance, was established to consider how costs could be reduced and standardization could be introduced in the area of packing supplies. Armed with a goal to reduce the DLA Distribution supply budget by 10%, the team evaluated the processes associated with ordering and inventory management and identified areas where processes could be standardized across the network. Along with cost reductions, the team focused on reducing variances and standardizing supplies, including pallets, fiberboard boxes, packing list envelopes and tape.

As a result of the effort, and because they can be ordered in greater quantities, the price of pallets was reduced by $12 each. Packing list envelope types were reduced from 17 to three, an 82% reduction. Box types were also reduced, from more than 250 down to 115, and five types of tape for standard packing were selected.

The price reduction for pallets, which was the first supply the team standardized, saved $3 million in fiscal 2014. Overall, the team had a goal of saving $3.9 million from all of the packaging supply initiatives, but will exceed that goal and save almost $34 million in fiscal 2014.

“It has been a great experience being involved in a process where there are such immediate results, involving the whole DLA Distribution enterprise,” said Julie Callahan, DLA Distribution’s continuous process improvement coordinator. “Our savings are a definite result of great teamwork and continuous participation.”

This project did not impact any specialized supplies needed to meet mission requirements in specific packing areas such as hazardous materials. The team is continuing to work on standardizing gloves and tri-walls, focusing on the necessary types for different work areas.

“This particular project will provide consistency and efficiency in what is purchased to support our distribution mission, enabling DLA Distribution to produce cost savings and cost avoidances as we continue to meet the demands for budget reductions,” said Rose Snavely-Howe, chief of the Acquisition Management Division.

As a Department of Defense combat support agency, DLA provides the Army, Navy, Air Force, Marine Corps, other federal agencies, and joint and allied forces with a variety of logistics, acquisition and technical services. The agency sources and provides nearly 100% of the consumable items America’s military forces need to operate, from food, fuel and energy, to uniforms, medical supplies, and construction and barrier equipment. DLA also supplies more than 85% of the military’s spare parts.

Headquartered at Fort Belvoir, Va., DLA has about 25,000 employees worldwide and supports more than 2,440 weapon systems.