Strategy and analysis for logistics resources the vrio framework cp. Inbound logistics is one of the most overlooked aspects in logistics management. Although pbl initially arose from efforts to reduce. Pdf defining and implementing performancebased logistics. The program will be initiated in the next few months.
The key strategy dod has identified to transform weapon system support is performance based logistics pbl see figure 4. Pdf evaluation of performance based logistics researchgate. Performance based logistics derisking implementation through. Target affordability and control cost growth incentivize productivity and innovation in industry. In these strategies, often referred to as power by the hour,5 the customer pays the product support provider psp for a specified target level system, subsystem, or component of availability. Whtra pe formance based logistics is and what it is not and. The vrio framework is the core piece of a resource based compa. Pdf defining and implementing performancebased logistics in. Therefore, a firm should develop logistics strategy on its core competencies in order to reduce costs and.
Performancebased logistics is a strategy that optimizes total system availability while minimizing cost and logistics footprint. Oct 15, 2015 this report examines the history, results, and prospects of the defense logistics agencys dla effective use of performancebased logistics pbl, in order to improve dlas use of pbl in its operations. Pms shall develop and implement performance based logistics strategies that optimize total system availability while minimizing cost and logistics footprint. Performance management in the transportation and logistics. According to the resource based theory, firm resources and capabilities determine firm performance and sustainable competitive advantage penrose, 1959. Key to the success of these arrangements are the incentives. However, the more challenging issue is the decreasing number of male citizens inducted for national service ns, as depicted in. Pbl was designed to optimise system readiness and meet performance goals for a weapon system 1 by taking a new approach to the contracts for. Performance based logistics and the emerging defence. Additionally, this research unveils key differences in business sectors use of pbl strategies.
Casespecific policy analysis logistics strategy and performance measurement mexicos national observatory for transport and logistics. Performance based logistics derisking implementation through shared information performance based logistics pbl rewards the contractor for delivering agreed levels of equipment output performance. A defensewide performancebased logistics contract for common components used by multiple services will generate efficiencies in accordance with dod acquisition efficiency initiatives. Pbl is an outcome based support strategy that provides an integrated support solution that balances warfighter readiness and affordability. The interview data shows that the issues emerged from. Sep 27, 2017 performancebased logistics is a strategy that optimizes total system availability while minimizing cost and logistics footprint. Logisticssupply chain strategy and planning if you dont know where you want to go, any path will do. Lack holistic approach to transport logistics chain analysis government and industry need ability to. Based on proven success, performancebased logistics pbl is included within.
Policy makers are interested in logistics performance indicators primarily because of the potential for improved transport services to promote economic development. In 2001, the department of defense dod identified performance based logistics pbl as the preferred weapon system support strategy. Although performance based logistics pbl sustainment strategies. Performance based logistics pbl co ntracts provide services or support where the provider is held to customeroriented performance requirements. On average, companies can potentially save between 20 58% on inbound freight spend. Based on the findings from the interviews, it was found that despite the positive growth of the logistics industry in malaysia, there is still a lack of research evaluating the performance of the malaysia logistics industry ali et al. Pdf the national defense strategy of the united states of america nds establishes a set of overarching defense objectives that guide dods security. Transforming logistics through performancebased logistics. But this brings additional challenges for asset and supply chain management. Pdf performancebased logistics pbl is a mechanism to integrate the acquisition. Rather than contracting for the acquisition of goods and services, the product support manager identifies product support integrator s psi to deliver. Performance based logistics pbl is the dod product support strategy to deliver weapon system readiness. Sustainment strategies shall include the best use of public and private sector capabilities through governmentindustry partnering. Performancebased logistics pbl strategyapproach all acat i and ii systems newlegacy andor subsystems where pbl is proven to be economically and operationally feasible acat iii may apply pbl at the discretion of the peopm, with hqda approval pbl must be tailored to individual systemcomponent needs decision to be based.
Use of incentives in performancebased logistics contracting. Performance based logistics if the department of defense is to stay prepared for the security challenges of the 21st century, we must transform not just our defense strategies, not just our military capabilities, not just the way we deter and defend but we must also. There is sufficient data on the effectiveness of pbl at reducing cost and improving support performance to conclude that if it is. The troop support division of the defense logistics agency held a meeting last month in philadelphia to understand how blockchain could have helped its already successful efforts assisting in puerto rico after the devastating hurricane maria in 2017. The under secretary of defense for acquisition, technology, and logistics better buying power bbp initiatives identify seven focus areas to achieve greater efficiency and productivity in defense spending. Most companies focus on outbound logistics as this is a lowhanging fruit. Performancebased logistics pbl is the preferred department of defense product support strategy to improve weapon system readiness by procuring performance, which capitalizes on integrated logistics chains and publicprivate partnerships. Availability of male citizens for ns to balance each years budget between new acquisitions and sustaining existing systems. The key strategy dod has identified to transform weapon system support is performance.
These contracts are not necessarily designed to save money, but rather to maintain or improve current system or platform performance in a cost constrained world. Explaining the effectiveness of performancebased logistics. Tradeoff decisions involving cost, useful service, and effectiveness shall consider corrosion prevention and mitigation. Strategy formulation begins with defining a corporate strategy. Performance based logistics pbl is a mechanism to integrate the acquisition and sustainment of various systems in the department of defense. Based on proven success, performancebased logistics pbl is included.
Keywords logistics management, leadership, performancebased. Performance based logistics pbl guidebook preface the 2016 release of the pbl guidebook includes additional lessons learned and implementation guidance intended to support a program management team through the development and execution of pbl arrangements. Sustainment strategies shall include the best use of public and private sector capabilities. Within dod, pbl is the purchase of performance outcomes, such as system availability, rather than the purchase of individual elements of logistics support such as parts, repairs, and engineering support.
Benchmark performance relative to historic performance and global standards. There is sufficient data on the effectiveness of pbl at reducing cost and improving support performance to conclude that if. Performance based logistic pbl contracting seeks to base contractor incentives on ongoing performance measures to achieve reliability and cost savings. Defence writer domhnall macinnes caught up with graham grose, director of the ifs aerospace and defense center of excellence, to discuss how the industry is changing through the spread of pbl. A conceptual framework of reverse logistics impact on firm. Gao was asked to compare industry practices for activities using complex and costly equipment with lifecycle management issues similar to.
Increase effective use of performancebased logistics. Apr 09, 2018 download the report purchase a print version traditional contracting is primarily transactional, rewarding contractors when deliveries are made or certain process milestones are met. Dod has settled on performancebased logistics pbl as the most desirable way. Asset performance, especially in uncertain market conditions important to cfos delivery performance flexibility important to customers an optimised supply chain balances cost against these other attributes to support your overall business strategy, as illustrated in the earlier pepsico example. A potential weapon system support strategy for the saf figure 1.
Department of defense says blockchain technology has enormous potential in helping improve disaster relief efforts. A guide to developing performance based arrangements. Performance based logistics is an emerging global defence procurement strategy, undertaken to carry out costeffective lifecycle product support. Performancebased logistics center for strategic and. Sustainment strategies shall include the best use of public and continue reading. Aug 16, 2004 the department of defense dod is pursuing a policy that promotes performance based logistics at the platform level as the preferred product support strategy for its weapon systems, based in part on dods perception that this is an industry best practice. Performance based logistics pbl contract s to provide the best value, longterm support solution for all fa18 a through f a nd ea18g. Vast majority of logistics software devoted to supply chain planning and management most assessment tools devoted to single mode or node.
What performance based logistics is and what it is not dtic. Employ effective performancebased planning, development, implementation, and management in developing a systems product support arrangements. Using performancebased logistics pbl for us defence. Maximizing supply chain performance in the transportation and logistics industry cognizant white paper executive summary managing transportation and logistics has been a critical focus area for manufacturers, distributors and thirdparty logistics players in their pursuit of developing a lean, agile and efficient customeroriented supply chain. Performance based logistics pbl, also known as performance based lifecycle product support or performance based contracting, is a strategy for costeffective weapon system support.
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