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DTCI - One year after initial 'go-live' activity

The Defense Transportation Coordination Initiative went "live" a year ago when operations began in Puget Sound, Washington State. The "go-live" activities of March 31, 2008, marked the first time government shippers used DTCI to ship freight and began the first of three initial phases aimed at managing Department of Defense freight movements in the continental United States.

On this anniversary of DTCI operations, Gen. Duncan J. McNabb, commander, U.S. Transportation Command and Lt. Col. Ronald L. Jackson Jr., DTCI program manager, Program Management Office, discuss the program with the editors of The DPO Update and The Transporter.


GEN McNABB: It is a third party logistics, or 3PL, freight management program designed to improve the reliability, predictability and efficiency of DOD materiel moving within CONUS. The transformational aspect of DTCI was its approach - the use of an industry partnership (the third party) to capitalize on commercial capabilities and proven best practices.

EDITORS: How did DTCI start?

GEN McNABB: Major corporations such as Dell, Target and Walmart were using 3PLs to manage their supply and distribution chains. Our (DOD) freight transportation requirements were locally managed at almost 700 shipper sites with no central oversight. So, the idea for DTCI started as a way to gain efficiencies and effectiveness already being realized in the commercial world.

LT COL JACKSON: We set out to do this by improving operational effectiveness, reducing cycle times, increasing efficiencies, increased visibility enabling process improvements, achieving cost savings, and improving predictability through increased use of scheduled (dedicated) trucks, and refined cross docking operations as well as better mode selection and load optimization.

GEN McNABB: DTCI began as a DOD initiative to integrate logistics and improve efficiencies. The initiative was transferred from OSD to USTRANSCOM as the Distribution Process Owner for acquisition and program management in 2004.

LT COL JACKSON: The contract was awarded in 2007 to Menlo Worldwide Government Services.

EDITORS: General, you said the impetus was to gain efficiencies. After one year of activity, how close is DTCI to meeting expectations? Is DTCI saving money?

GEN McNABB: DTCI is avoiding the need to spend money on less efficient transportation solutions. The Menlo Team, Lt Col Jackson's folks, and the professionals at Defense Logistics Agency Distribution Centers make up the major muscle movements in the implementation schedule. Their hard work has allowed the Department to avoid spending $17 million thus far.

EDITORS: How is the phased implementation plan going? Is it on schedule?

LT COL JACKSON: The schedule was initially set up to be implemented in phases. Phase I included DLA CONUS Defense Distribution Centers and was scheduled to be completed 22 months after contract award. Phase II started before the completion of Phase I to incorporate activities within close proximity of DLA/DDC, selected aerial ports and DOD shippers. The phased approach has been very successful. To date, 24 of 67 sites have gone live. Phase I & II are on schedule and will complete by September.

Our joint military and contractor team continues to meet, and some cases, exceed our challenging implementation schedule. Lessons learned have been applied for every new site activation to enhance DTCI's ability to support the warfighter's requirements. As you know our joint PMO/DDC team already has plans in place to press forward with an aggressive implementation schedule. We see surprisingly good results with rate-savings; however, we want to seize the opportunity for further commercial optimization practices which could drive cost savings well past even our most optimistic estimates. Of course, this needs to be done in a measured way with impacts to current processes considered. With the Menlo team, we feel we are already on the right track.

EDITORS: What other metrics are you and your team using to measure DTCI, and how is DTCI progressing with regard to those objectives?

LT COL JACKSON: Our key metrics include On-Time Delivery, On-Time Pickup, IT Systems Available for Use, Small Business Goals, Loss and Damage Free Shipment, Claims Cycle Time and Deliver Freight Savings. The program is currently exceeding objectives in most of the categories. In particular, our IT systems remain on-line over 99 percent of the time enabling cargo to move in an efficient and effective manner. Another point of interest is our Small Business metric. Our goal is 23 percent - we are surpassing our goal with 53 percent small business participation in the program.

EDITORS: Are these metrics available, or are they posted anywhere for those that are interested?

LT COL JACKSON: Yes. The DTCI has a public Website. It's easiest if users start by going to the USTRANSCOM site at www.transcom.mil; click on the "DTCI Portal" link on the right, and then users can find a link to our metrics on the left. All slides are updated monthly with metrics information.

EDITORS: When DTCI went live a year ago, neither of you were in your current positions. What, if anything, have you found to be the greatest surprise about DTCI?

GEN McNABB: DTCI has been a huge success thus far, and there is no reason to think that it won't continue. For me to say I was surprised, would imply I had doubts. Such an impression could not be further from the truth...DTCI was nothing new to me when I took command. I was well informed of the program's concept, its purpose, and even some of its challenges from my time as the Director of Logistics on the Joint Staff. Instead of surprise, I'd characterize my emotion as excitement (for the future of DTCI).

LT COL JACKSON: As the new program manager, I was pleasantly surprised. I did not expect the whole DTCI enterprise, from the various government entities to the Menlo Team to have so many of the kinks worked out. Sure we have run into some issues, but the business rules, and the processes established and operational when I got here in February have proven to be right on target. From the outset, DTCI was about forming a world-class partnership with a third party logistics provider...and that's exactly what we have done!

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