RL Magazine
Logistical Counter March: An Analysis of Reverse Logistics in the U.S. Marine Corps
by Dave Wikler, Marine Corps

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In his 2001 article, In Through the Out Door, Jim Whalen wrote his often quoted statement, “In an ideal world, reverse logistics would not exist”, which is to say, in a perfect logistics and supply chain scenario, we would not have to worry about reverse logistics operations because there would be no returns, defects, or waste. The reality is that we do not live in an ideal world and, contrastingly, defective and unwanted material abounds. As the need for lean, expeditious, and fiscally conservative sustainment support moves to the logistics forefront, effective reverse logistics management has become paramount in practically all organizations that use forward logistics; the U.S. Marine Corps is no exception.

In the last eighteen years reverse logistics has evolved very rapidly within the Marine Corps to the point that its reverse logistics chain contains an average of approximately $300 thousand per day more in principle end-items (PEI) and material than the forward supply chain that supplies repair parts and other items to its operational units (Scharfen, 1994). Furthermore, on any given day there is an average of over a thousand individual items of equipment and material in the Marine Corps reverse logistics chain (Swift & Chandler, 2003). Reverse logistics management in the Marine Corps is increasingly paramount to their fiscal savings relating to inventory, equipment availability, compliance with the Code of Federal Regulation (CFR), and overall mission readiness.

There has been a metamorphosis of the relationship between the military and civilian sectors shaped by a greater and more intimate technological collaboration, an increase in contracted logistics support (CLS), and the constraints of and lessons learned from the Global War on Terrorism (GWOT), which has ultimately level-set their relationship to the extent that their present-day shared knowledge is equivalent.

The Marine Corps’ definition of reverse logistics captures the essence of the civilian sector definition as “the science of planning and carrying out the reverse movement of equipment and material to support maintenance, re-acquisition, evacuation, and disposition thereof” (MCWP 4-12, 2002). This definition is intended to meld with the Marine Corps’ mission and function of providing power projection from the sea, using the mobility of the United States Navy to deliver combined-arms task forces rapidly, thus its reverse logistics processes are tailored to this end in breadth, depth, and efficiency alike. The Marine Corps’ in-depth perspective on reverse logistics centers on the sustainment, reconstitution, and redeployment of equipment and material as to support the expeditionary functions of its operational logistical processes. This has fostered the requirement for an integrated and embedded logistics capability (IELC) that allows for a reduction in repair cycle times, transportation, inventory, and defects, while eliminating the risk of over production and over processing (Swift & Chandler, 2003). Using business models from the civilian sector, specifically twenty-first century computer and telecommunications technology, the Marine Corps’ logistics integration reduces duplicative processes, while embedded support allows for expeditious response to shifts in asset posture and supply chain needs allowing for greater anticipatory capabilities and less contaminated reverse logistics channels.

In the later 1990s, the Marine Corps merged its two largest logistics support entities, the Marine Corps Logistics Bases, which dealt with mostly new acquisitions fielding and depot-level repair of principle end items, and the Marine Corps Material Command, which was tasked with provision of repair resources and management of secondary repairables (SECREPs), to form the Marine Corps Logistics Command (MARCORLOGCOM) (MCO 4790.19, 2001). This “one-stop-shop”, of sorts, provides a source of worldwide integrated logistics that includes operational logistics support, supply chain, distribution, depot-level maintenance management, and a world-wide strategic prepositioning capability in support of the operating forces and other supported units to maximize their mission readiness and sustainability (MCO 4000.58, 2005). A major tenant of this initiative is the support of enterprise level and program level total life cycle management (TLCM) through reverse logistics processes. Of these, the most prolific and beneficial are the Depot Level Maintenance (DLMP), Secondary Repair (SRP), Stock Rotation Management (SRMP), and the Enterprise Returns Management Programs (ERMP).

Depot level maintenance can be independent of the location at which the maintenance or repair is performed, the source of funds, or whether the personnel are government or commercial (government contractor) employees due to co-location and collaboration with key vendors and CLS providers. The organic workload is accomplished by Marine Corps Multi-Commodity Maintenance Centers (MC3) located in Albany, Georgia and Barstow, California and other secondary service depots throughout the world. The MC3s provide low cost, high quality overhaul, rebuild, depot-level repair, and modification of ground equipment, while maintaining a high rate of reliability, flexibility, and responsiveness (Winkle, 1996).

A critical component of the Marine Corps reverse logistics and self-sustainment capability is its ability to procure and repair components for its entire ground equipment stock. As part of the SRP, SECREPs consist of components that can be repaired, which generally proves more economical and timely than re-purchase, or recycled. The Marine Corps at one time maintained spare SECREPs at seven principal locations; each operating independently of the others, which resulted in excess inventory service-wide because of the isolation of the inventories and inherent mathematical flaws in the Marine Corps’ sparing methodology (Winkle, 1996). The Marine Corps reconfigured their SRP to form enterprise-wide centralized management of SECREPs, which included accountability, responsibility, and funding, thus reducing inventory cost from $41.6 to $25.9 million and increasing end-item availability from 72 to 89 percent (Scharfen, 1994).

The Marine Corps’ SRMP strives to enhance equipment readiness, prolong equipment and material service life, and to achieve full use of resources and assets prior to the end of their useful service life and eventual disposal (MCO 4400.194, 1997). Prepositioned equipment is periodically used for short periods in training exercises and real-world operations, but is used less than equipment in fleet units. Equipment in high operational tempo units that receive the most usage are rotated with available equipment which receives considerably less usage (i.e. administrative storage/deadlines, prepositioned stocks, etc.), thus achieving a more consistent maintenance history and dispersion of equipment wear.

Various programs in use throughout the Marine Corps to execute stock rotation throughout its inventory are the Replacement & Evacuation (R&E), Service Life Extension (SLEP), Mid-Life Rebuild, Product Improvement Program (PIP), and Weapons Exchange for major training commands. The Marine Corps’ ERMP gives thorough consideration to establishing criteria and implementing procedures and systems for managing defective materiel, excess materiel, and materiel requiring maintenance, repair, or overhaul. It uses in-transit asset visibility capabilities, whenever possible, as the basis for identification and selection of materiel to be returned from organizational echelons to wholesale locations in order to leverage various supply structure and the contribution of such returns to improve inventory performance (MCO 4440.31E, 1999). Two of the most prolific ERMP components are the Product Quality Deficiency Report (PQDR) and Warranty Administration programs.

The primary goals of the PQDR program are to maximize equipment and materiel readiness and operational effectiveness, prevent recurring materiel deficiencies, and improve user satisfaction with Marine Corps materiel (MCO 4855.10B, 1993). It provides a user-friendly product quality deficiency reporting and a data feedback system that facilitates appropriate documentation, action/resolution reporting, and specific points of contact for all phases of PQDR processing.

The Marine Corps Warranty Administration program works in close association with the PQDR program by providing a quick and efficient vehicle for the correction of material deficiencies and capture of subsequent data for future analysis. Since the beginning of 1985, the Marine Corps has been required by the Department of Defense (DoD) to obtain and include warranties in contracts for equipment with a unit cost of more than $100 thousand or a projected total procurement cost of more than $10 million (MCO 4105.2., 1987). The Marine Corps currently has 246 types of equipment, representing tens of thousands of individual items of equipment, manufactured by over 50 separate companies in 29 different states that fall under contractual warranty constraints (MARCORLOGCOM webpage, 2012). Reverse logistics, although at times referred to in the Marine Corps community as plainly “logistics” or by more specific element titles, is in many ways the life-blood of the Marine Corps and intrical to the success of its expeditious operations. In short, due to its need for resourcefulness in a constrained budgetary environment, the Marine Corps, since its inception, has been re-inventing, re-using, and re-furbishing practically everything it owns. The support of, and interest in, all reverse logistics efforts commence at the highest level within the organization, and thus have the full support of senior and intermediate managers and leadership. Through the use of cross-functional teams, collaborative educational relationships with manufactures and supply chain members, and the use of comprehensive resource planning solutions, the Marine Corps has been able to accurately assess the true value of its reverse logistics, created visibility and traceability throughout the reverse logistics channel, and instituted a continuous improvement mindset (Swift & Chandler, 2003).

The Marine Corps annual logistics budget is slightly over $10.3 billion, which does not include principle end-item procurement or Defense Logistics Agency (DLA) affiliated programs, but does include transportation, purchase of consumable materials, purchase of repair parts, and purchase and maintenance of SECREPs (U.S. GAO webpage, 2012). Comprising a little more than one third of the Marine Corps’ total budget and less than four percent of the total Defense Department budget for logistics (U.S. GAO webpage, 2012), it is logical that there is a scant chance for any tangible surplus. However, the Marine Corps consistently closes out the fiscal year under budget for logistics, which is directly attributable to its reverse logistics initiatives that yield a recurring savings of $2.9 to $3.4 million annually (U.S. GAO webpage, 2012). Through web-based IT solutions, such as the newly fielded Oracle-based Global Command Support System-Marine Corps (GCSS-MC), the Marine Corps has achieved an end-to-end visibility and traceability of its reverse logistics channels. For individuals who perform finance functions, this provides the capability to manage reverse logistics financials on a near real-time basis enabling them to avoid over- and double-obligation as well as seamlessly and rapidly divert recouped funds to new or alternate obligations. Maintenance personnel have the capability to see locations SECREPs need to be repaired, receive preventive maintenance, or be rotated, to include specific defects, as well as where equipment and material is in other entities maintenance cycles, or where repair parts are located locally, nationally, or globally to mitigate double-ordering and facilitate the shortest repair-cycle time possible. Finally, supply personnel can achieve more accurate and efficient inventories in a multi-location environment, project future requisitions of consumables and repairables to include warranty and general expiration dates, transfer surplus repair parts and material to entities that require them, and determine when and where supplies, purchase orders, and work orders, should be deployed within an extended reverse logistics chain.

The Marine Corps continuous process improvement (CPI) initiative has proven to be one of the more intrical reverse logistics best practices since gaining its momentum in the first half of 2004 (SecNav Memo, 2006). Through the methodology of Define, Measure, Analyze, Improve, and Control (DMAIC), this has enabled its workforce to achieve enterprise-wide reverse logistics and equipment readiness objectives through standardized business tools. Some of the most tangible results have been the elimination of waste through minimization of process steps, and reduction of re-work by controlling processes and quality, therefore cleansing reverse logistics channels allowing primary processes to engage more freely (SecNav Memo, 2006).

There are twenty-six major Marine Corps installations within the United States, each with a robust Environmental Management Division (EMD) that is charged with evaluating and continually improving environmental compliance and protection programs, with emphasis on carbon emission reduction, and training and education (MCO 5090.2A, 1998). Efforts center on carbon emission, hazardous waste and recycling, and environmental compliance management through the Marine Corps Environmental Management System (MCEMS) which is a framework of five interrelated components (policy, planning, implementation, inspection and correction/prevention, and management review) consisting of 18 elements ranging from risk mitigation/prioritization to funding and management. This framework is consistent with those used by other military services and Federal agencies and with International Organization for Standardization’s (ISO) 14001, an international standard for environmental management systems (EMS) (MCO 5090.2A, 1998). The Marine Corps’ EMS emphasizes continual improvement through effective policy, planning, implementation, checking and preventive or corrective action, and management review (MCO 5090.2A, 1998).

The Marine Corps embarked on the aggressive implementation and use of Combined Heat and Power (CHP) at four of its major installations in early 1999. The cogeneration power plant concept was adopted with combustion turbine generators that produce up to 7.5 MW of electricity and hot water, generated using waste heat from the turbine exhaust, for heat and domestic purposes in most buildings aboard these installations. Absorption chillers were implemented to produce chilled water from the CHP generated hot water for air conditioning systems. With an efficiency of over 64 percent, the plant uses 24 percent less fuel than a conventional energy-supply system. Based on this comparison, the CHP system avoids an estimated 19,700 metric tons per year of CO2 emissions, equal to that from the electricity used by more than 2,400 homes (Menassa, et al, 2012). The installations reported an average annual energy costs reduction of $5.8 million (EPA webpage, 2012). This gained the Marine Corps recognition by the Environmental Protection Agency (EPA) with the Energy Star Combined Heat and Power (CHP) award for taking an efficient, clean, and reliable approach to generating power and thermal energy from a single source. Over the past twelve years, the Marine Corps has capitalized on this successful program to employ CMPs at practically all of its installations, and improvements are being made continually.

The Marine Corps’ reverse logistics movement of equipment and material to support maintenance, re-acquisition, evacuation, and disposition thereof, has proven vital to its modern day mission and function of providing combat power through combined-arms task forces in an expeditious manner. The IELC and use of twenty-first century IT and telecommunications technology are tailored in breadth, depth, and efficiency alike to facilitate the sustainment, reconstitution, and redeployment of equipment and material in support of the Marine Corps’ expeditionary operational logistics functions and processes. End-to-end visibility and traceability has been achieved through the use of IT solutions such as GCSS-MC and its commitment to CPI to reduced process cycle times, improved safety, provide affordability and flexibility to elevate their ability to meet emergent requirements, and improved customer satisfaction. Additionally, the Marine Corps has achieved the cultural shift and transition to green and carbon credit supportive practices through the establishment of EMDs to manage the MCEMS, and hazardous waste minimization and reutilization and recycling programs.

It has been said that the ultimate goal of a successful reverse logistics program should be to phase itself out over time through systematic process improvements (Whalen, 2001). The Marine Corps will most likely never reach this goal as it will undoubtedly become more reliant on its reverse logistics programs in the future, and as it continues to realize the utility and value they hold. As the nation requires the Marine Corps to be more versatile, expeditious, and engage in operations on multiple fronts; as conservation of the environment and non-replenishable natural resources becomes increasingly paramount, and federal regulations respond with greater restrictions, so does reverse logistics management in the Marine Corps become increasingly intrical to their fiscal savings relating to inventory, equipment availability, compliance with the CFR, and their overall mission readiness.

A twenty-five year Marine Corps veteran of logistics and ground equipment maintenance management, Dave Wikler currently works for Headquarters Marine Corps, Installations & Logistics as a civilian Logistics Management Specialist and Supply & Maintenance Analyst.

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