Operations Research (OR) is a toolset utilizing disciplines including mathematics, computer science, and data analysis to find optimal solutions given a set of constraints. The NAVSUP WSS OR team uses these skills to help develop optimal supply chain solutions that inform the requirements various program offices use in their budget submissions. The latest goal of the team is to develop a multi-echelon, multi-indenture RBS model allowing simultaneous modeling of the wholesale and retail levels for multiple iterations of a given weapon system, thus supporting the targeted operational availability of that weapon system for the minimum inventory investment.
“A lot of our modeling has traditionally looked at, ‘what do I need on the shelf on the ship?’ That’s what we call retail allowancing. There is also wholesale allowancing. The NAVSUP Enterprise and DLA (Defense Logistics Agency) are the wholesale entities that support all of the warfighters,” said Cdr. Jeremy Taylor, NAVSUP WSS Director, Operations Research Analysis.
Traditional modeling approaches didn’t always lead to the most cost-effective way of allocating limited resources.
“Let’s say you have one ship and you’ve got two spares for a given system and in the wholesale you need one spare. Now you bring another ship on-line. The retail allowance will probably be the same for that ship too, it’ll have its two spares. Do you need another one in the wholesale?” asked Taylor.
That answer depends on a number of factors according to Taylor, such as the length of time it takes to contract and order a part (administrative lead time), and the time it takes the manufacturer to make the part (procurement lead time) or repair the broken part (repair lead time). Other factors include the usage rate for that particular part.
“You may need another part in the wholesale inventory, but you may not,” said Taylor. “We’ve never really had a model that could do that.”
With advances in technology and computing power, the operations research team has the tools to do the multi-echelon RBS modeling and simulation to run through all the possibilities to figure out the right balance.
“Through multi-echelon we mean wholesale and retail,” said Taylor. “It can be multiple retail points, multiple wholesale points and figuring out the right balance for those. We’re developing a model that will support that.”
The NAVSUP WSS OR team is working hand-in-hand with their counterparts at NAVSUP Headquarters to develop the model through their Center of Operations Research Excellence (CORE) initiative.
The OR teams are using data derived from the SLQ-32 radar system to develop the model. The SLQ-32 is on dozens of ships, so there is a lot of existing data. Using historical data, the OR team can run the model and see how the output compares to what actually happened.
“We are working together to build this out. The end result will be the proper level of support to the warfighters, supporting the various ships with what they need and having the right amount in wholesale without over purchasing,” said Taylor. “Basically, we are finding a way to meet our operational readiness goals for the minimum cost investment.”
Each weapon system developed in the Navy has certain key performance parameters. Two of those parameters for sustainment are Operational Availability (AO) and Material Availability (AM). AO is the amount of time a weapon system is available for use, while AM is how many of the given weapon system are available at a point in time. Supply Material Availability (SMA) is a metric used by suppliers to measure how well the supply system is supporting the weapon system in terms of parts.
“Both NAVSUP WSS and DLA use SMA as a key metric because that’s what we can control. It’s a critical part for supporting AO and AM for various weapons systems but it’s not the only part,” said Taylor. “There are a number of elements that make up the Integrated Logistics System. All these factors come together to keep a weapon system functioning.”
Multi-echelon RBS modeling will take all of these factors into account.
“To this point, because the modeling has been different, we can end up buying too little and SMA or AO is not at that 85-percent level that you want, or you end up buying too much and having it sit on the shelf,” said Taylor. “We’re hoping to be able to do some ‘what if’ analysis. Say it’s a system like our ballistic missile defense, maybe 85-percent SMA is not high enough. Maybe you need 90 or even 95-percent. Maybe it’s a system where you can take a little more risk.”
While the model is still being developed, the OR team can see the potential dividends of gathering and analyzing data across multiple echelons.
“By coming up with a model that isn’t making assumptions but is actually modeling both echelons and their interactions, we’re hoping to deliver a more tailored approach for a given weapon system, determining the right amount of stock in the retail units and in the wholesale that will increase our effectiveness.”
NAVSUP WSS is one of 11 commands under Commander, NAVSUP. Headquartered in Mechanicsburg, Pennsylvania, NAVSUP employs a diverse, worldwide workforce of more than 22,500 military and civilian personnel. NAVSUP and the Navy Supply Corps conduct and enable supply chain, acquisition, operational logistics, and sailor and family care activities with our mission partners to generate readiness and sustain naval forces worldwide to prevent and decisively win wars. Learn more at www.navsup.navy.mil, www.facebook.com/navsupwss, and https://twitter.com/navsupsyscom.