Defending America by saving big bucks

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REDSTONE ARSENAL, Ala. - Private industry does a lot of things well, and the U. S. Army understands that.  "We did a lot of research with civilian companies, AmazonCaterpillar, Hewlett-Packard, and we looked at how they managed their supply chain," says Jim Dwyer, the Deputy Chief of Staff for logistics at the Army Materiel Command.

The Army needed to find out how to manage its spare parts supply chain. Coming off two wars, the Army Materiel Command had an inventory of some $24 billion in spare parts, and having such an abundance was too expensive.  AMC started  Sales and Operation planning. The idea was to trim inventory, but in a careful manner.

"We understand that we have a lot of soldiers' lives in our hands if we don't buy the right parts and have them at the right place at the right time," said Dwyer.

We're talking spare parts for equipment spread around the world.  That's where another mention of private industry comes in.

"It's like having the parts at all the dealers for Chrysler, Ford and General Motors at all of their different locations so that when a car comes in to the shop, they have the parts to fix it," said Dwyer.

The men and women involved in logistics at AMC changed how they did things. They cut inventory where possible, and saved money where feasible.  Taxpayers will smile.

"They should be very proud of what we're doing. We've returned well over $300 million so far. We've avoided spending about a billion dollars in avoiding parts that we wouldn't have needed," said Dwyer.

The program at AMC is less than two years old, but it has been successful. Now, it's business that asks AMC how to manage a huge parts supply, and still save money.  "And I told them what we did. You just have to trust your people. You have to get them trained and then you've got to look at it every day," said Dwyer.

He adds that looking at it happens 24 hours a day, seven days a week.  "AMC never sleeps," he added.