Defense Logistics Agency must change to survive, official says

The Defense Logistics Agency must change the way it operates or it will go out of business, according to Deputy Director Rear Adm. Ray Archer. Archer repeatedly stressed the need for the agency to adopt commercial practices for managing its $19 billion in annual sales in a speech Tuesday at an Armed Forces Communications and Electronics Association luncheon. He said the agency has been internally focused rather than customer-focused and, as result, its services and supplies are more expensive than those offered by many private sector companies. "I'm telling everyone at DLA that their job is at risk if we don't change," said Archer. DLA has more than 45,000 employees who supply all common items to the armed forces, such as food and pharmaceuticals. A cornerstone of the agency's new management strategy is the ongoing modernization of business systems. Archer said. The agency will spend hundreds of millions of dollars over the next several years to replace decades-old computers with agency-wide information technology systems that will make it easier to manage its product lines. The first of the new systems will be online in August, he added. Archer said new systems are only part of the solution for keeping DLA alive. He said the key is changing an agency culture that has traditionally only talked to customers when problems arose to one that asks customers what it can do to offer better products and services. Additionally, the agency will organize its distribution centers based on customer needs, not geography. DLA will also begin "negotiating with its customers" to find out where the agency should make investments to better meet their needs, Archer said.