June 27, 2008
Florida Institute of Technology
Basics of supply chain organization6
Overview of IT technologies10
Advantages and problems identified15
Possibilities to use RFID for small supply chain owners20
The Information technology is undergoing a fundamental shift from personal computers on business and in the home (platform-centric computing) to network computing. Information “content” now can be created across extremely heterogeneous global computing environment. Because of increase in the information the potential market is not limited anymore by distances, whereas the former safe home markets is open to everyone. Because of that networked and extremely fast flow of information the producers have to fight for survival with uncertain demands of market, customer individualization, with new market entrants and competitors. On the other hand, due to network computing capabilities producers are able much faster to offer new products and satisfy those demands in order to withstand mass-customization trends in the market.
Defense organizations are facing the same challenges as civilian business do. The armed forces were designed to fight against potently known opposite forces (competitors) in potentially known environment and territory (market), sustaining predesigned war scenarios with fairly predicted consumption rates of supplies (market demand) for predesigned size of forces (customer). However, today forces are facing with increasing trend of global terrorism instead of conventional opposite forces which decreases demand certainty. The areas of operations lies far beyond of national or even NATO’s conventional boundaries. Asymmetric conflicts, unknown environment of operations, increased need for responsiveness and agility, different size of units with different demands (customization) and extremely long lines of supply are the new “standards” rather than exceptions. Moreover, after the end of Cold War era, the so called “peace dividends” reduced the military budgets in European states and the main credo for the Defense organizations has become “more with less”.
In 2005 when Lithuania, one of the smallest and youngest NATO member decided to participate in worldwide war against terrorism in Afghanistan it was a first time in the state’s history when troops were deployed outside the national borders. To deploy about 170 troops with individual and crew equipment and build up a field camp from a scratch in the one of the most austere region of the Afghanistan required to use about 20 military cargo aircrafts C-17 with load capacity of 170,900 lb (77,519 kg) each. Even for such a small amount of supplies in comparison with other NATO nations, during the deployment and initial operational capabilities building phase there was a complete blindness over supply chain. If the tracking of cargo more or less was controlled from home base airport of embarkation to the centralized airport port of debarkation in Afghanistan (staging area), then the visibility was lost when those cargo pallets were unpacked and newly prepared for the last leg of journey with smaller cargo aircraft that was only able to transport them to the end user. The cargo was shipped either not according to commander’s priority list, or instead of wanted items on the pallet different items were received. The invisibility of supply chain brought to the situation that troops began reordering supplies and home base distribution center sent them repeatedly, although those supplies where somewhere in the Afghanistan or on the way from home base. Due to lack of visibility on supply chain the budget of the operation dramatically increased, accountability on supplies was lost...