Defining and Measuring the Success of Service Contracts

Abstract

The purpose of this study is to examine and compare the cost and time-to-reliably-replenish (TRR) constraints of commercial and military modes of shipment to the main three (of 13) annual joint USPACOM exercises conducted in three distinct allied countries. In this study, we estimate potential cost savings if commercial shipment becomes the primary means. Using a business case analysis (BCA), we compare the estimated costs of current methods for providing logistical support in USPACOM and provide recommendations to improve the system as a whole. The utilization of commercial companies as the primary means of shipment of aircraft parts in U.S. Pacific Command (USPACOM) is a national and military strategic imperative. Specifically, the current costs of operating KC-130J aircraft as the primary means of shipment far exceed costs if the primary mode of shipment became employment of commercial agencies. Equally important is improving upon joint multinational relationships and joint logistics best business practices that would facilitate optimal asset throughput in the customs departments of our allied nations. In considering and analyzing these dynamics, this study provides a cost-based analysis and qualitative evaluation regarding the use of commercial agencies (i.e., FedEx and DHL) and/or the United States Marine Corps (USMC) KC-130J heavy-lift aircraft in the shipment of F/A-18 aircraft parts within the USPACOM area of responsibility (AOR) of Southeast Asia, to include Australia. Based on our analysis, commercial shipment of aircraft parts is the most attractive option to current alternatives in USPACOM. These findings led to our conclusion of the ever-present necessity of an operational shift in mindset where more planning and negotiation resources attempt to influence increased commercial shipment throughput in the customs departments of USPACOM allied countries.