There is sufficient data on the effectiveness of pbl at reducing cost and improving support performance to conclude that if. Vast majority of logistics software devoted to supply chain planning and management most assessment tools devoted to single mode or node. Department of defense says blockchain technology has enormous potential in helping improve disaster relief efforts. There is sufficient data on the effectiveness of pbl at reducing cost and improving support performance to conclude that if it is. Policy makers are interested in logistics performance indicators primarily because of the potential for improved transport services to promote economic development. Performance based logistics derisking implementation through. Additionally, this research unveils key differences in business sectors use of pbl strategies. Although performance based logistics pbl sustainment strategies. Sustainment strategies shall include the best use of public and private sector capabilities. A potential weapon system support strategy for the saf figure 1.
But this brings additional challenges for asset and supply chain management. 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. Performance based logistics pbl is the dod product support strategy to deliver weapon system readiness. Performance based logistics is an emerging global defence procurement strategy, undertaken to carry out costeffective lifecycle product support. Casespecific policy analysis logistics strategy and performance measurement mexicos national observatory for transport and logistics. Pms shall develop and implement performance based logistics strategies that optimize total system availability while minimizing cost and logistics footprint. Pdf performancebased logistics pbl is a mechanism to integrate the acquisition. Performance based logistic pbl contracting seeks to base contractor incentives on ongoing performance measures to achieve reliability and cost savings. Performance based logistics and the implications of. The program will be initiated in the next few months. On average, companies can potentially save between 20 58% on inbound freight spend. Based on proven success, performancebased logistics pbl is included within. A conceptual framework of reverse logistics impact on firm.
In 2001, the department of defense dod identified performance based logistics pbl as the preferred weapon system support strategy. Pbl is an outcome based support strategy that provides an integrated support solution that balances warfighter readiness and affordability. 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. Employ effective performancebased planning, development, implementation, and management in developing a systems product support arrangements. Benchmark performance relative to historic performance and global standards. Tradeoff decisions involving cost, useful service, and effectiveness shall consider corrosion prevention and mitigation. Dod has settled on performancebased logistics pbl as the most desirable way. Sustainment strategies shall include the best use of public and private sector capabilities through governmentindustry partnering. Performancebased logistics strategy defines performance outcome. Performance based logistics pbl, also known as performance based lifecycle product support or performance based contracting, is a strategy for costeffective weapon system support. 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.
Therefore, a firm should develop logistics strategy on its core competencies in order to reduce costs and. Performance management in the transportation and logistics. Pdf the national defense strategy of the united states of america nds establishes a set of overarching defense objectives that guide dods security. A guide to developing performance based arrangements. Keywords logistics management, leadership, performancebased. Using performancebased logistics pbl for us defence. Although pbl initially arose from efforts to reduce. 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. 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. Use of incentives in performancebased logistics contracting. The interview data shows that the issues emerged from. Inbound logistics is one of the most overlooked aspects in logistics management.
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. Key to the success of these arrangements are the incentives. Logisticssupply chain strategy and planning if you dont know where you want to go, any path will do. Explaining the effectiveness of performancebased logistics. Increase effective use of performancebased logistics.
Performancebased logistics center for strategic and. Sep 27, 2017 performancebased logistics is a strategy that optimizes total system availability while minimizing cost and logistics footprint. However, the more challenging issue is the decreasing number of male citizens inducted for national service ns, as depicted in. The key strategy dod has identified to transform weapon system support is performance. The key strategy dod has identified to transform weapon system support is performance based logistics pbl see figure 4. Rather than contracting for the acquisition of goods and services, the product support manager identifies product support integrator s psi to deliver. A defensewide performancebased logistics contract for common components used by multiple services will generate efficiencies in accordance with dod acquisition efficiency initiatives. Performance based logistics and the emerging defence. 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. According to the resource based theory, firm resources and capabilities determine firm performance and sustainable competitive advantage penrose, 1959. 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. 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. Sustainment strategies shall include the best use of public and continue reading.
Gao was asked to compare industry practices for activities using complex and costly equipment with lifecycle management issues similar to. Pdf defining and implementing performancebased logistics. Performance based logistics pbl contract s to provide the best value, longterm support solution for all fa18 a through f a nd ea18g. Performance based logistics derisking implementation through shared information performance based logistics pbl rewards the contractor for delivering agreed levels of equipment output performance. What performance based logistics is and what it is not dtic.
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. Target affordability and control cost growth incentivize productivity and innovation in industry. Availability of male citizens for ns to balance each years budget between new acquisitions and sustaining existing systems. 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. Performancebased logistics is a strategy that optimizes total system availability while minimizing cost and logistics footprint. Performance based logistics pbl guidebook history of pbl pbl in commercial industry system and subsystem4 pbl strategies have been around for many years in commercial aviation. 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. 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. Strategy formulation begins with defining a corporate strategy.
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. Lack holistic approach to transport logistics chain analysis government and industry need ability to. The vrio framework is the core piece of a resource based compa. 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. Strategy and analysis for logistics resources the vrio framework cp. Pdf evaluation of performance based logistics researchgate. Based on proven success, performancebased logistics pbl is included. Performance based logistics pbl co ntracts provide services or support where the provider is held to customeroriented performance requirements. Most companies focus on outbound logistics as this is a lowhanging fruit. Performance based logistics pbl is a mechanism to integrate the acquisition and sustainment of various systems in the department of defense. 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. Transforming logistics through performancebased logistics.