Business & Technology Nexus

Dave Stephens on technology and business trends

Centralization and the DLA

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This post returns Procurement Central to the Procurement topic & offers an historical perspective on the U.S. Defense Logistics Agency, otherwise known as the DLA. I find the history of this agency fascinating, as it offers over the span of almost 60 years a glimpse into how the pursuit of incremental efficiency gains can result in massive centralization in large, complex organizations.

But first some facts and figures. The DLA is a gigantic procurement & logistics management organization consisting of over 21,000 employees. In the government fiscal year 2005, DLA provided nearly "$32B in goods and services to all military services worldwide." It manages the majority of U.S. Defense contracts. It is responsible for not only acquisition of goods and services but in many cases storage and transport. It also acts as a central liquidation center.

The DLA primarily handles food, clothing, medical supplies, and weapon systems repair parts (See DLA at a Glance). It manages 5.2MM items, processes 54,000 requisitions per day, and holds an inventory of around $90B.

The DLA was established in 1961 by then Secretary of Defense Robert McNamara. But its roots go back much further, to 1947. And lucky for us, the DLA itself has a few historical web pages chronicling its growth from idea to behemoth.

DLA's vision could very well work for most central Procurement groups I've come across – "Right Item, Right Time, Right Price, Every Time."

I think there's a lot to be learned from the DLA's evolution as an organization. I've captured a graphical summary for your perusal (click on it for a large, readable version). And I encourage those with the time and interest to read a more complete historical account straight from the DLA website here and here.

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Written by Dave Stephens

06/11/06 5:24 PM at 5:24 pm

Posted in Historical, Opinion

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  1. I track the originating Google searches that click-thru to posts on my site from time to tme. One thing I’ve noticed about the searches that wind their way to this post is their negativity. The most straightforward Google hit was “Tell me why the DLA sucks so bad”. So you’ve definitely all piqued my curiousity. I’d love to hear more about your experiences with the DLA – feel free to send ’em my way at drstephe at gmail dot com.

    Dave Stephens

    06/23/06 8:27 PM at 8:27 pm


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