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Defense Logistics Agency Clothing and Textile Supply Chain Update March 16, 2007 Defense Logistics Agency 1 Agenda • Overview of Clothing and Textiles (C&T) Supply Chain • Make up of the Industrial Base • Investment Plan for FY 07 • Recent Outreach Efforts • Virtual Vendor Management • ACU Update 2 Clothing & Textiles Supply Chain Sales FY 01 - $1.0B FY 02 - $1.3B FY 03 - $1.7B FY 04 - $2.2B FY 05 - $2.2B FY 06 - $1.9B Customers / Items Customers: 14,000 Orders: 3,600,000 / year Items: 31,000 The Big Picture Obligations FY 01 - $1.1B FY 02 - $1.6B FY 03 - $2.8B FY 04 - $2.0B FY 05 - $2.0B FY 06 - $1.6B Personnel Employees: 302 civilian + 8 Military + 2 Europe + 50 interns Suppliers: 858 3 Clothing & Textiles A Unique Commodity Large $386.69M UNICOR $93.3M Sized items NIB $51.9M Example, Combat Boot – 133 sizes Men’s Army Dress Coat – 65 sizes Airman Battle Uniform – 155 sizes Military unique Small Business NISH $143.7M Most clothing on a specification $1011.24M Service driven requirements Simple garments to complex protective clothing (Chem Suits) Industrial Base – Strategic Supplier Issues Small Business driven Mandatory Sources National Industry for the Blind (NIB) National Industry for the Severely Handicapped (NISH) Federal Prisons (UNICOR) Socioeconomic Obligations (Hub Zones, 8(a), Set-Asides) Best Value Long Term Contracts During peacetime, over 95% of our contracts are long term / best value contracts 4 C&T Investment Plan FY07 By Major Grouping FY07 Plan Dress Clothing $165.1M Field Clothing $492.9M Individual Equipment $581.6M Organizational Clothing $481.8M Total $1,721.4M • Expenditure History – FY 05 = $2.088B – FY 06 = $1.613B – FY 07 = $1.70 B (planned) – Anticipated that expenditures will level at $1.4B-$1.5B over the next 5 years • Plan adjustments: – Based on actual sales – Customer collaborative forecasts – New item introductions Adjustments made thru the use of automated demand and supply tools 5 C&T Investment Plan FY 07 By Minor Grouping • Dress Uniforms – Shirts & Headwear – Outerwear – Dress Uniforms • Individual Equipment $29.0M $76.5M $59.9M • Field Uniforms – Accessories – Camo uniforms – Footwear – – – – Heraldics Equipment Items Safety Items Tentage $9.4M $305.9M $127.9M $138.4M • Organizational Clothing $126.1M $239.6M $127.2M – – – – Chemical Protective Cold Weather Gear Gloves Special Purpose $189.8M $117.6M $69.7M $104.6M 6 Recent Outreach Efforts • Meeting with Member Military Liaison Assistants 12 February 2007 • Working Group partnering with American Apparel & Footwear Association (AAFA) – Recurring Meeting approximately every 60 days. – Objectives of the effort: • An assessment of specific C&T industry skill sets in jeopardy • The impact of those diminishing skills sets on the readiness • Once assessments complete, a timeline and a path forward for preserving domestic production capability • Summit with Industry and the Services to discuss requirements will convene in the next 60 days. 7 Continuing the Dialogue • Potential topics include: – Timeliness of contract awards & delivery orders – Protection against uncontrollable cost increase in multiyear contract – IDIQ Min-Max ranges – Providing forecasts to Industry – Source Sampling and Shade Evaluation – Use of Supply Chain Manager – Review System for Better and Prompt Payment Options – Continued support of domestic manufacturing laws 8 Virtual Prime Vendor (VPV) • VPV is a logistics management system Travis VPV • In operation since 1998 - excellent track record Not shipped On time = No pay! Late 0.8% Use chart • Establishing a new Virtual Vendor Manager (VVM) at each Recruit Center On Time 99.2% * Chart Represents 35.5 Months Of Operation DLA continues to manage contracts with C&T Industrial Base 3 7 1 MC San Diego MC Parris Island NTC Great Lakes Lackland AFB Ft. Jackson Ft. Sill Ft. Len Wood Ft. Knox Ft. Benning 1 8 5 6 RTC/CIIP 1 2 3 4 5 6 7 8 9 3 2 VPV Site 1 2 3 9 4 Lion Vallen – All Army Travis NIB – AF& MC Peckham NISH – Navy VPV Objective: Linking Supply and Demand 2 9 8