Aviation Supply and Demand Chain Overview Richmond Chapter of APICS Monthly Meeting April 17, 2008 Col Ron Barto, USMCR Director, BRAC Implementation & Transition Defense Supply Center Richmond

The DLA Enterprise as of 30 September 2007 FY02 Sales/Services: $21.5B FY03 Sales/Services: $25B FY04 Sales/Services: $28B FY05 Sales/Services: $31.8B FY06 Sales/Services: $35.5B FY07 Sales/Services: $34.8B Scope of Business 54,000 Requisitions/Day 8,200 Contracts/Day #64 Fortune 500 – Above Walt Disney #3 in Top 50 Distribution Warehouses 26 Distribution Depots 5.2 Million Items – eight supply chains 25M Annual Receipts and Issues 1411 Weapon Systems Supported 132.8M Barrels Fuel Sold $14.6B Annual Reutilizations/Disposals Land/Maritime: $3.1B Aviation: $3.4B Troop Support: $12.4B Energy: $13.4B Distribution: $1.3B Other: $1.2B ~95% of Services’ repair parts 100% of Services’ subsistence, fuels, medical, clothing & textile, construction & barrier materiel Only left side completely updated with sales data Right side – Only update for Fortune 500 FY06 Sales L/M 3.2B Avn 3.3B T/S 11.6B Enregy 13.5B Dist 1.5B Other 1.2B FMS 1.02B People 20,805 Civilians 519 Active Duty Military 754 Reserve Military Located in 48 States/28 Countries Foreign Military Sales Sales: $1.18B Shipments: 535K Supporting 124 Nations

Supply Chain Enterprise… 3 Supply Chain Enterprise… Land & Maritime Supply Chain Lead Center for Distribution 26 Distribution Depots Worldwide Worldwide Reuse, Recycle & Disposal Solutions DOD Manager for Printing & Duplicating, Automated Information Products & Service Defense Supply Center Columbus Defense Distribution Center Defense Reutilization & Marketing Service Defense Logistics Information Service Creation, Management & Dissemination of Logistics Information Defense Supply Center Philadelphia Defense Supply Center Richmond Headquarters Defense Logistics Agency Defense Energy Support Center Fort Belvoir 7 OCONUS Depots Troop Support Supply Chain Aviation Supply Chain Headquarters J-Codes Defense National Stockpile Center DLA Europe DLA Central DLA Pacific …Part of the DOD Logistics Enterprise

Contingency Support Teams Direct Support to the Warfighter DSCR DCST Deployments: DSCR personnel are deployed in the following locations: IRAQ KUWAIT AFGHANISTAN 4

The Aviation Enterprise as of 30 Sep 07 Aviation Supply Chain: FY07 Sales: $3.4B FY08 Projection: $3.4B Scope of Business 13,096 Requisitions/Day 1534 PR Awards/Day 1300 Weapon Systems Supported Land/Maritime: $3.1B Aviation: $3.4B Troop Support: $12.4B Energy: $13.4B Distribution: $1.3B Other: $1.2B People 2138 Civilians 55 Active Duty Military 27 Reserve Military FY06 Sales L/M 3.2B Avn 3.3B T/S 11.6B Energy 13.1B Dist 1.5B Other 1.6B FMS 140M FY06 Requisitions/Day – 12,416 FY06 PR Awards/Day - 1355 Foreign Military Sales Sales: $337M

Aviation Supply Chain Customer Profile FY07 Requisitions Marines (2.1%) $70.2M Navy (24.0%) $807.7M Other (7.7%) $260.4M Air Force (36.6%) $1,230.0M Army (19.6%) $659.2M (35.5%) 1,697,496 Marine Corps 98,434 (1.5%) 74,177 (22.5%) 1,074,452 (35%) 1,672,657 By Sales Sales : $3,364.7M Requisitions: 4,780,063 By Requisitions Sales @ standard FMS (3.4%) 162,847 Sales Rich – 1,801,870 Col – 531,490 Phil – 2,446,703 Rich –$2,315.4M Col – $ 515.7M Phil – $ 533.6M FMS (10.0%) $337.2M Prior year: FY06 Sales were $3,254.5M FY06 Requisitions were 4,469,885

Aviation Expertise In DLA Brig Gen Andrew E. Busch USAF Commander Kim Huntley SES Deputy Commander Yvette Burke SES Acquisition Executive Col Gary Wiest, USMC Deputy Commander Operations Engine Components Air Frames Landing Gear Flight Safety Equipment Propeller Systems 7

Aviation Supply Chain Product Lines D S C R . . . D L A ’ s A V I A T I O N S U P P L Y C H A I N Richmond Commodities Environmental Products Maps Industrial Plant Equipment ASC Columbus Detachment ASC Philadelphia Detachment Packaged POL Chemicals Electrical Hardware Instruments /Gages Engine and Airframe Re-refined Oil Ozone Depleting Substance Reserve Chemical Prime Vendor Program Topographic, hydrographic, aeronautical maps/charts, in both hard copy and digital format, for all DoD Activities More than 87,000 products Lathes Milling Machines Boring Machines Grinding Machines Relocation New Procurement Overhaul Power Trans Components Guided Missile Components Misc Engine & Components Torque Converters Communication Equipment Threaded and Non-Threaded Fasteners IPV Program We manage 840,000 items that support 1,300 Major Weapon Systems. Over 444,000 of the items are aviation parts – spares for engines that go on fighters, bombers, cargo aircraft and helos. As well as airframe/landing gear parts, flight safety equipment and propeller systems. We also manage a variety of other items, such as, bearing, chemicals, batteries, instruments/gages, re-refined oil, maps, and industrial plant equipment. FROM VNDIA: Denny Morris emphasized that Ozone Depleting Substances are critical asset based on their attorneys. No other installation has or can create that capability Who does Mapping report to? DDC Commander Who are our primary maps distribution carriers? UPS, USPS, and FEDEX IPE is a fee for service contract 8

DSCR/Aviation Supply and Demand Chain Profile DSCR Site Facts Total Population 2255 Avg Age 48.8 Yrs Avg Service Time 19.4 Yrs Avg Education Level Two Years of College Avg Grade GS-10.8 Avg Salary $64,751 Columbus, Ohio Mechanicsburg Industrial Machinery Repair Facility Philadelphia, Pennsylvania ASC Detachments/SS&D Sites Philadelphia Personnel: 279 Columbus Personnel: 188 Mechanicsburg Personnel: 68 Warner Robins SS&D Personnel: 240 Tinker SS&D Personnel: 367 DSCR/Aviation Supply and Demand Chain Profile: Here is a look at the workforce profile for the Aviation Demand and Supply Chain. Richmond Aviation Supply Chain DSCR Diversity Facts Male – 47% Female – 53% White – 55% African-American – 40% Other – 5% Veterans – 34.10% Oklahoma City SS&D Warner Robins SS&D

General Physical Description of DSCR Over 600 Acres Over 7 Million Square Feet of Covered and Uncovered Storage Area Approximately 120 Warehousing, Utility and Administrative Buildings

History 3500 – 1500 BC - American Indian Trading Area 1619, One of the Earliest Settled Sites in U.S 1887, James Bellwood was the Last Private Owner of the Property. He Turned it into a Model of Agriculture for VA, and Introduced Elk to the Farm. 1941 - The Army Purchased the Property. One of oldest inhabited parcels of land in the US, linking back to the original Jamestown settlers. 1619 Thomas Sheffield received 2,300 acres as a land grant from Queen of England. He and his settlers were part of the Jamestown settlement and came upriver to settle here. 1622 Indian raiders killed Sheffield, his family, and 10 other settlers. Land was idle until 1634 when the region was organized into counties the land became part of Chesterfield Country. The Sheffield tract passed into the hands of Seth Ward, In 1797 Richard Gregory bought approximately 1,000 acres from Ward. Gregory and his family built a manor house on the property between 1797 and 1804. Gregory left the bulk of his estate to his son, who in turn passed it to Major Augustus Drewry and his wife, Lavinia, Gregory’s granddaughter. The land passed between Ward, Gregory and Drewry,. Drewry family owned the property during the Civil War. Confederate troops erected a fort, known as Drewry’s Bluff or Fort Darling, on the property to the east on the James River. The fort was used to defend Richmond from attacks by Union gunboats. In May 186i4, Confederate Gen. P.G.T. Beauregard made the manor house his headquarters. Confederate President Jefferson Davis met with Beauregard in the house on May 12 of that year to confer on a plan for halting the Union advance on Richmond. After the war, Drewry traded the farm to Capt James B. Jones, a fellow officer in the Confederate army, who had held man the guns at Fort Darling. Jones lived on the property until the mid=-1880s, but wasn’t able to make a go of farming after the war, since the land was worn out from constant tobacco and cotton farming. The war had also exacted a heavy toll on the area. IN 1887 the property was sold to James Bellwood, a Canadian agriculturist who was seeking a more temperate climate because of health concerns. Bellwood , and his three sons, transformed the 2,400 acre farm into a model of agriculture. He also imported a pair fo mated elk to the farm from his native home, which flourished and became known as the Bellwood Elk. Model of Agriculture – purchased for $18.50 an acre, value increased to $150.00 at the time of Bellwood’s death. Agricultural awards from 1914 Panama-Pacific International Exposition held in San Francisco on display in bldg 34. Army purchased the land from Bellwood on June 6, 1941. The elk herd passed along with the property as part of a “gentleman’s agreement”. Descendents of that orginal elk herd remain on the property to this day and are cared for the the center’s employees. Clearing and grading of the land for construction began in August of that year, with the Richmond Quartermast Depot being activated in January, 1942. In its first two decades, the mission of the Richmond Quartermaster Deport was on the traditional logistics support to the US Army with an emphasis on Quartermaster items.

History 1942 -The installation was Activated as the Richmond General Depot 1962 – Absorbed by the Defense Supply Agency 1977 – Name Changed to Defense Logistics Agency 1980s - 1990s Reorganization and Restructuring Throughout DLA and Another Name Change - Defense Supply Center Richmond By March, supplies were rolling in and out of the depot. More than 8,450 employees worked on the installation during the peak years of World War II. On a single day, more than 850 rail cars were dispatched and received, providing supplies for the war effort. During the depot's first 30 months of operation, the tonnage shipped, if converted to a solid freight train, would stretch over 1,000 miles. Throughout World War II, the Korean conflict and Vietnam, the installation thrived with activity. The installation, its tenants and their missions, has transformed throughout its five decades of service to adapt to the needs of the nation’s military. The Richmond Quartermaster Depot was renamed the Richmond Armed Service Forces Depot in 1943. The U.S. Army Quartermaster Branch Depot was established on the site in 1949, followed by the U.S. Army General Supply Center in 1958. In 1962, DLA began overseeing operations and the installation became known as the Defense General Supply Center. In 1962, the Secretary of Defense consolidated the single-manager agencies operated by each of the service branches into the Defense Supply Agency. This resulted in an expanded mission for the depot, which included supply management of more than 30,000 general supply items for the military services and certain civilian agencies worldwide. In 1977, the Defense Supply Agency name changed to the Defense Logistics Agency. The installation name changed to the Defense General Supply Center to match its new logistical mission. Another major change occurred in 1986, when depot operations were separated from inventory control point functions and a separate command--the Defense Distribution Depot Richmond--was established on the site. In 1991, DGSC marked its 50th anniversary of service to the military. In 1996, the installation name changed from the Defense General Supply Center to the Defense Supply Center Richmond. Today, DSCR serves as the aviation supply and demand chain manager for the Defense Logistics Agency and serves within the DoD as the primary source of supply for more than 1.25 million repair parts and operating supply items.  DSCR’s mission is to provide best value aviation weapon systems and environmental logistics support to America’s armed forces—on land, at sea and in the air.

Transformation & Growth… Changing Warfighting & Strategic Environment Adaptable & Agile Linking Supply & Demand TODAY 2008 – Post BRAC & Beyond 2007 – Joint Regional Inventory Material Management 2007 – National Inventory Management Strategy 2005 – Base Realignment & Closure (BRAC) 2003 – Distribution Process Owner Created 2002 – Business Systems Modernization Deployed 1997 – Prime Vendor Implemented 1992 – Distribution Command Consolidation Completed 1990 – Supply Chain Consolidation 1988 – GSA Transfers Strategic Stockpile 1977 – DSA renamed Defense Logistics Agency 1962 – Defense Supply Agency Begins Operations 1961 – LTG McNamara Appointed Head of New Common Supply Agency Managing Suppliers Managing Supplies Strengthening Supply Chain Excellence 13

We Are Transforming to … Single Touch Point to Warfighters & Suppliers EBS CRM SRM Customer Supplier DSCP DSCC DSCR Service DoDAAC Weapon System 14

Demand and Supply Chain Organization Model Customer Operations Supplier Operations Strategic Material Sourcing Group Customer Support Supplier Support CRM Cells/Support Teams Item Planning Teams Integrated Supply Teams Keep focus on accountability for obtaining customers’ requirements Keep focus on accountability for planning customers’ requirements In most cases, single face to the customer (OF, customer DP) regardless of what the customer is buying Item-level planning for the items managed by the Supply Chain Shared services (e.g., Finance) for Customer Operations units Supply planning, procurement, and tech/quality for items managed by the Supply Chain Strategic sourcing for items managed by the Supply Chain Shared services (e.g., Finance, T/Q for Supplier Operations units Customer Operations - accountable for understanding the needs of customers and providing customer service. CRM Cell/Support Team – CRM Cells perform customer touch, order fulfillment, and customer based demand planning. Support Teams provide commodity-specific support to certain customers who consume products from multiple Supply Chains. (Job examples: CAS, Demand Planner, Planning Data Maintainer) Integrated Planning Team (IPT) – perform item based demand planning. (Job examples: Demand Planner, Planning Data Maintainer) Customer Support – accountable for support to customer operations teams as required, and Finance functions. (Job examples: Business Analyst, Financial Customer Liaison, Planning Data Maintainer) Supplier Operations - accountable for meeting customer expectations by performing inventory planning, performing procurement activities, and effectively managing suppliers. Integrated Supply Team (IST) – performs supply planning, procurement and Tech/Quality functions. (Job examples: Supply Planner, Product Specialist, Acquisition Specialist) Strategic Material Sourcing Group – performs supplier relationship management for suppliers working under strategic supplier alliances, major corporate suppliers or a group of suppliers representing a defined major industrial, service or product segment, and analysis and definition of strategic long term contracts. (Job examples: Strategic Sourcing Specialist, Supplier Relationship Manager, Acquisition Specialist, Industrial Specialist) Supplier Support - accountable for support to supplier operations teams as required, as well as shared Tech/Quality and Finance functions. (Job examples: Business Analyst, Resolution Specialist, Acquisition Specialist, Product Specialist) Direction of IPTs planning this Supply Chain’s items at other locations Item Planning Teams Detachments Integrated Supply Teams Direction of ISTs managing this Supply Chain’s items at other locations 15

Aviation Supply & Demand Chain Forward Presence Scott AFB, IL (1) Ogden,UT (4) NAVICP, (1) Philly, PA Mechanicsburg, PA (68) Langley AFB, Oceana, Norfolk,(1 ea) VA North Island (4), LeMoore (1), San Diego (1), CA Alternate Duty Locations of assigned DSCR/ASC employees are: Redstone Arsenal, AL-4, Ft. Rucker, AL-1 North Island, CA – 4, LeMoore, CA – 1,San Diego, CA – 1 Jacksonville, FL – 3 Warner Robins, GA-7 Scott AFB, IL-1 Cherry Point, NC – 3 Tinker AFB, OK-9 Philly NAVICP – PA – 1 Langley AFB, VA-1, Norfolk, VA – 1, Oceana, VA – 1 Corpus Christi AD (CCAD), TX – 2 Ogden, UT-4 Wiesbaden, Germany-1 Mechanicsburg, PA (68) Total -45 forward presence + 68 IPE-Mechanicsburg, PA Total 113 (As of July 06, 2007)---at alternate duty locations (11 states and 2 countries) All GS now, but will be adding WG once we add the BRAC locations beginning in October 2007 Redstone Arsenal (4) & Fort Rucker, AL (1) Tinker AFB, OK, (9) Cherry Pt., NC (3) Warner Robins, GA (7) Wiesbaden, Germany (1) Jacksonville, FL (3) CCAD, TX (2)

Overview of the BRAC 2005 Supply and Storage Decisions Fully Implemented By Fiscal Year 2011 Supply Storage & Distribution Consolidation of Wholesale and Industrial Retail Supply Support Depot Level Reparable DLR Procurement Management Consolidation By Supply Chain Commodity Privatization Disestablishes the Wholesale ICP Functions For Tires, POL/Chemicals & Cylinders/Gases Asset Transfers & Inventory Management Of Consumable Items Consumable Item Transfer THIS IS ANOTHER REPRESENTATION OF THE SLIDE THAT BG BUSCH PRESENTED ON THE BRAC 2005 SUPPLY AND STORAGE DECISIONS. SAVINGS – DLR/CIT ($1.6B) SSD ($1.3B) PRIVATIZATION ($1.7B) OVER 20 YEARS DECISION 51 - SUPPLY, STORAGE, AND DISTRIBUTION MANAGEMENT IS THE CONSOLIDATION OF WHOLESALE AND INDUSTRIAL RETAIL SUPPLY SUPPORT. ASC SITES ARE: ROBINS AFB – STOOD UP 14 OCT 07 TINKER AFB – ESTIMATED FEB 2008 HILL AFB – EST APRIL 2008 CORPUS CHRISTI ARMY DEPOT – TBD JACKSONVILLE FRC (Fleet Readiness Center) SE NORTH ISLAND FRC SW CHERRY POINT FRC E NAVY FRC WILL FOLLOW A PHASED APPROACH BEGINNING OCT 2008 FOR PHASE I AND OCT 09 FOR PHASE II. DECISION 43 - PRIVATIZTION CONTRACTS FOR PACKAGED PETOLEUM PRODUCTS AND TIRES HAVE BEEN AWARDED CHEMICAL, PETROLEUM, OILS, LUBRICANTS (AWARDED TO SAIC (SCIENCE APPLICATION INTERNATIONAL CORP) ON 2 MAY 07) – 5400 NSNs GASES & CYLINDERS (AWARDED TO HAAS ON 30 APR 07) – OVER 700 NSNs A THIRD CONTRACT WAS AWARDED BY DSCC FOR THE PRIVATIZATION OF TIRES – (29 DEC 06 TO MICHELIN AIRCRAFT TIRE CO.) DECISION 35 – COMBINATION OF CONSUMABLE ITEM TRANSFER AND THE TRANSFER OF “NEW” DLRS TO DLA. PLEASE NOTE THAT FOR CIT NSN MANAGEMENT WILL TRANSFER TO DLA. HOWEVER FOR DLRS, NSN MANAGEMENT WILL BE RETAINED BY THE SERVICES. CIT – THE TRANSFER OF ASSETS AND INVENTORY MANAGEMENT OF CONSUMABLE ITEMS. TOTAL ENTERPRISE GAINS ARE: NAVY (JUNE 2007) – 7684 NSNs AIR FORCE (JULY AND AUGUST 2007) – 6032 NSNs ARMY – TRANSFERS WILL TAKE PLACE BETWEEN JUL 08 AND APRIL 2011. TOTAL NSN GAIN TBD. SERVICE EXCLUDED ITEMS ARE NUCLEAR, SUBSAFE, SPECIAL PROGRAM AND DESIGN UNSTABLE. DLRS – THE REMAINDER OF THIS PRESENTATION WILL COVER THE DLR IMPLEMENTATION/EXECUTION. Moving Forward to Transform DoD

Naval Inventory Control Point BRAC Impacts To DLA Aviation Support Naval Inventory Control Point DLR Ogden ALC SS&D/DLR Cherry Point NADEP SS&D North Island NADEP SS&D Oklahoma City ALC SS&D/DLR Army Aviation & Missile Command DLR Jacksonville NADEP SS&D Corpus Christi Army Depot SS&D Warner Robins ALC SS&D/DLR 18

DSCR … Aviation Center of Excellence Diverse & Specialized Workforce Critical & Unique Missions An Integral Part of DoD . . . Focused on the WarFighter!