DLA shares strategy for change, demand projections with industry

FORT BELVOIR, Va. -

Solving military supply challenges requires transparency, collaboration and data sharing between the Defense Logistics Agency and industry, DLA's director said during a Demand Forecast and Industry Association Leadership Meeting at the McNamara Headquarters Complex Nov. 18.

"We will always work closely with the services and the combatant commands to craft solutions, but we'll never be able to do it with sufficient precision without your actions, your capabilities and your innovation," he told leaders of 14 industry associations representing about 5,000 businesses.

Simerly said change is imperative as he described DLA's new strategy for ensuring troops have the best possible logistics support for future fights.

"What we've done in the past, what's been sufficient - especially in the past years of support to the global war on terror - is not sufficient in this contested logistics environment against the pacing threats that we see in the current era of great power competition," he said, noting that threats exist across air, sea, space, cyber and ground domains.

The agency has spent decades solidifying its success in efficiency and cost-consciousness and is now targeting logistics support that is agile, adaptive and resilient. A vital part of that is providing accurate, data-backed demand forecasts that enable industry to lessen lead times, Simerly added.

"You are indispensable to our ability to meet the mission and new challenges. Everything we do is going to be executed by, with and through you and the firms that you represent," he said, asking those present to share ideas on policies and procedures that need to be addressed to support industry capabilities.

DLA has long used state-of-the-art tools like machine learning and robotics to forecast demands and is now looking to artificial intelligence to speed the process and improve accuracy.

The agency also expects to launch dashboards depicting industrial base health in various market sectors, DLA Acquisition Director Matt Beebe said. The dashboards may eventually share progress toward specific readiness goals.

"There might be opportunities for you all to help populate some aspects of those dashboards with your understanding of industry risks and changes," Beebe said, adding that such data would be used to identify threats to industry health.

Assessments of which raw materials are available domestically versus overseas would also help identify areas of fragility as the Defense Department continues posturing for potential conflict.

Sharing recent business performance, Beebe said DLA had over $52 billion in contract obligations in fiscal 2024 - the highest ever - with a record $20 billion going toward small businesses. The agency's number of suppliers has stabilized at around 8,500.

"We're very proud of that," Beebe continued. "We had been declining for many years along with the rest of the department and federal government."

Supply chains that have grown in sales include hardware or spare parts, mainly for weapons systems being used to support European Command missions, and construction equipment, he added.

In demand projections for fiscal 2025, DLA Logistics Operations Deputy Director Kristin French said sales are expected to be 1.7% higher for spare parts, 4.1% lower for medical items and 5.5% higher for energy.

"Of course, there is the unknown, the uncertainties of the environment we're working under and what could happen as time goes on," she said.

Molly Pearson, executive vice president of the Armed Forces Communications and Electronics Association, noted that DLA's ability to create flexible contracts will be critical as DLA works to incorporate new technology to address contested logistics challenges.

While making the most of emerging technology, industry must also think about obsolete equipment in different ways, Simerly added.

"Things we expected would be divested are being reinvested in and sometimes given to our partners with the responsibility on us to sustain it," he said, pointing to the M113 armored personnel carrier being used by Ukraine as an example. The U.S. is also modernizing rather than replacing the B-52 fleet.

Industry and DLA representatives agreed that increasing the use of additive manufacturing can help improve readiness. The agency is working with the services to incorporate additive manufacturing in service-owned industrial sites and through competitive contracts. Additive manufacturing may also help industry produce better-designed parts quicker and at better prices, Simerly said. One industry rep noted that vendors will need DLA's help getting the services to share engineering data such as 3D drawings and printing files so industry can produce parts that match quality specifications.

Representatives from the clothing and textiles industries voiced appreciation for a recent wargame that explored potential supply-chain vulnerabilities during a future conflict and allowed industry to help brainstorm possible solutions.

Attendees were encouraged to participate in the 2024 DLA Supplier Survey that measures suppliers' experience doing business with DLA in four areas: communications, effectiveness, supplier relationships, and growth and profit. The survey, now in its fourth iteration, was emailed Oct. 18 to about 12,000 vendors. It includes 32 questions with a section for written comments and should take 10-15 minutes to complete.

Industry associations attending the meeting included the American Apparel and Footwear Association, Professional Services Council, and National Defense Transportation Association. The slides are available on the DLA Demand Forecast for Industry website.

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