Air Force cancels failed logistics system after spending $1 billion

On November 8th 2012, U.S. Air Force officials announced that they were scrapping $1 billion investment in “The Expeditionary Combat Support System (ECSS) program, also known as the next-generation logistics management system. Since 2005, the Air Force has developed ECSS program to save billions of dollars by streamlining supply chain and providing an integrated approach for buying, moving, and managing equipment. It was supposed to retire more than 400 legacy information systems, and support 250,000 users, managing $33 billion in assets at over 600 locations globally, according to CSC.

According to the Air Force spokesman, Ed Gulick, the program is no longer a viable option for meeting a fiscal 2017 deadline for having auditable books. The cancellation of the program will cost up to 115 contract employees their jobs and require the realignment of 55 military personnel and government civilian employees.

Continuing the program would cost an estimated $1.1 billion for about one quarter of the original scope, with fielding delayed until 2020. Meanwhile, Air Force will rely on its existing and modified logistics systems to meet the 2017 auditability goals.

It is particularly surprising that even U.S. Air Force failed to successfully implement the logistics management system. Although logistics management systems, such as WMS, TMS and YMS, seem like viable options for significant cost reductions, it may sometimes be more beneficial to not choose to implement such system at all. In many cases, the implementation process may take too long that companies can fail to collect the initial investment back within a reasonable period of time.

Reference:
1. http://www.airforcetimes.com/news/2012/11/fed-air-force-cancels-failed-logistics-system-110812w/
2. http://www.federaltimes.com/article/20121108/AGENCY05/311080003/1032/IT
3. http://washingtontechnology.com/articles/2012/11/09/air-force-logistics-contract-csc.aspx

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