Drivers of fulfillment performance in mission critical logistics systems: An empirical analysis

Abstract

Logistics systems that involve truncated timelines, where failure to meet such a timeline results in a substantial loss to business, have been coined ‘mission critical logistics’ systems, and their management is quite different from their ‘traditional’ counterparts. Yet, much of the research in this space has operated under the assumption that the methods, approaches, and tactics are equally applicable to both mission critical, and traditional logistics systems. Is this necessarily so? Most literature addresses functional issues such as inventory or process management but does not provide an understanding of the drivers of fulfillment performance in mission critical systems. This is a critical gap in the literature. Partnering with the Defense Logistics Agency (DLA) and the United States Navy, we studied a mission critical logistics system in order to understand the drivers of these logistics systems and their performance. We utilize a unique dataset consisting of inventory fulfillment and ordering, as well as part criticality and location. Overall the results indicate that inventory management is a much more dynamic process in mission critical logistics systems, whereby flexibility is crucial, and designation of part categories and essentiality can be the determining factor for whether or not the mission fails.