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Future Freight Networks : Yearbook 2013
50 FORUM 2013 David McGahey CSC, Program Director of the Defence Logistics Transformation Program, Joint Logistic Command, outlined the five-year logistics program being run by Defence to gain efficiency and save public money. The aim of the program is to find $350 million in efficiencies without affecting war fighters. It involves an inventory of 1.2 million items worth approximately $6.3 billion. These items span 200 warehouses across 24 major logistic nodes. These numbers, David said, need to reduce, as a lot of items are rarely used; but when needed, they are needed quickly. He estimated capital expenditure of around $800 million is needed to reduce the number of warehouses from 24 to 10 sites. The program has received $752 million for new facilities – eight sites: three greenfield and five redevelopments. Construction began in December 2012, and will be completed in 2016. McGahey said that failure is not an option. His customers have been at war for 15 years, and deserve the best equipment and supply chains. McGahey conceded that developments in the logistics industry have passed Defence by in the last 20 years, and that there is an urgent need to change. The facilities are outdated, and there is a lack of automation. For example, Defence has only just started using barcoding, and it does not have pallet identification. Until now, Defence has been concentrating on working out what is best done in-house, and what is best outsourced. The focus will now be on delivery, and rationalising our wholesale warehousing and distribution. McGahey said that having 24 sites and more than 200 warehouses was due to processes driven by Defence operation requirements and rules, and internal requirements that are not industry best practice. What is needed is improved collaboration and knowledge sharing between industry and Defence personnel. Defence also needs improved commercial skills and experience. David McGahey CSC Defence Logistics Transformation Program Keynote address continued from page 48 1880_Future Freight 2013.indd 50 10/05/13 1:53 PM