DLA Inventory ‘Rightsizing’ Efforts Boosted by LMI’s PNG Tool

MCLEAN, Va., Jan. 29 -- The Logistics Management Institute issued the following news release:

The Defense Logistics Agency (DLA) is highlighting the positive impacts of LMI's acclaimed PNG tool as the agency works to "rightsize" the amount of inventory it has stored at depots around the world, lauding the tool for its ability to manage inventories with items whose demand is difficult to forecast.

PNG (identified in the January/February 2014Loglines Magazine article (http://www.dla.mil/Loglines/Pages/LoglinesND2013Story03.aspx) as Peak and NextGen) is a suite of groundbreaking inventory models that bypass demand planning and forecasting, incorporating risk management to provide inventory managers with a flexible integrated hedging strategy solution that simultaneously balances the risks of tying up money in inventory, having too little inventory to serve the customer, and increasing buyer workload.

PNG was implemented by DLA in January 2013, and, in its first year alone, has helped the agency make significant progress in achieving its goal of reducing inventory by $4 billion by the end of FY2014. With PNG expected to allow DLA to drive down its inventory costs by $180 million, Bob Carroll, chief of the DLA Logistics Operations' Planning Division, is reporting strong results to date.

"After about six months of use, [PNG is] performing as they were expected to and should start to deliver tangible benefits within the year," Carroll is quoted in the article.

PNG, a finalist for the Council of Supply Chain Management Professionals' 2013 Supply Chain Innovation Award, was highlighted in a front page article (http://www.federaltimes.com/article/20130825/AGENCY01/308250002/DLA-director-calls-13B-budget-cuts) in the print version of Federal Times, detailing LMI's role in helping DLA manage its front-end purchasing of items with infrequent demand levels and highly variable demand, en route to significant reductions in the number of unfilled orders from DLA customers and procurement workload.

For more information on PNG, visit http://www.lmi.org/png.

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