Dollars and Sense: A Process Improvement Approach to Logistics Financial Management [Illustrated] [Paperback]

Brauner Bondanella Pint Relles Steinberg (Author)

Book Description

Publication Date: December 19, 2000

As the Army has implemented initiatives to improve its basic logistics processes, it has found that these processes are hampered by a financial management system that is slow and inaccurate and that creates errors and delays. This report documents analysis supporting the Army's effort to improve its logistics financial management (FM) processes using Velocity Management's Define-Measure-Improve methodology. In defining the FM process, researchers developed process maps that showed that the delivery of conflicting information from the supply and finance systems forces units to create time-consuming, manual reconciliation processes to determine their remaining budgets. Researchers identified metrics to measure performance. To improve the quality of price and credit information and eliminate the need for manual reconciliation, the researchers recommended that when a transaction is first undertaken the prices and credits should be used for all records of the transaction.

Editorial Reviews

From the Publisher

In applying Velocity Management (VM) to improve such key logisticsprocesses as order and ship, repair, and stockage determination, theArmy has uncovered anecdotal evidence that some delays and errorsin these processes can be traced to the performance of the logisticsfinancial management process. Improvements to the speed andaccuracy of basic logistics processes should not be hampered by afinancial management system that is slow and inaccurate, that createserrors and delays, and that places obstacles in the path of efficiencyand effectiveness. Recognizing the need to improve the performanceof the logistics financial management process, the Velocity Group(VG) formed a Financial Management Process Improvement Team(FM PIT). This report documents analysis conducted in support of theFM PIT. Following the VM methodology of Define-Measure-Improve(D-M-I), the research to date has focused on defining the process,conducting exploratory measurements to test the utility of somecandidate metrics, and suggesting improvements to financialmanagement processes.A second RAND report by Ellen M. Pint et al., Right Price, Fair Credit:Criteria to Improve Incentives for Army Logistics Decisions (forthcoming),documents research on improving financial incentives to useresources wisely. It develops criteria for evaluating financial policiesand draws implications for financial management policy.The research documented here is being conducted in the MilitaryLogistics Program of the RAND Arroyo Center under the direction ofJohn Dumond. The Arroyo Center is a federally funded research anddevelopment center sponsored by the United States Army. TheDeputy Chief of Staff for Logistics, U.S. Army, sponsored the research.The research should be of interest to logisticians and financialmanagement personnel in all the military departments and the Officeof the Secretary of Defense, especially those concerned with theservices' working capital funds and the pricing of their goods andservices.Related logistics research is documented in other RAND publicationslisted in the bibliography. Readers interested in RAND publicationslisted there should contact RAND Distribution Services, 310/451-7002[voice], 310/452-6915 [fax], or e-mail at [e-mail].

About the Author

DANIEL A. RELLES (Ph.D., Statistics, 1968, Yale University) is a Senior Statistician with the Research Staff Management Department at RAND.

Paul Steinberg (Ph.D., English, University of California, Berkeley) is a Communications Analyst at RAND.

Product Details

• Paperback: 106 pages
• Publisher: Rand Publishing (December 19, 2000)
• Language: English
• ISBN-10: 0833028545
• ISBN-13: 978-0833028549
• Product Dimensions: 8.8 x 6 x 0.4 inches
• Shipping Weight: 8.8 ounces
• Amazon Best Sellers Rank: #8,353,351 in Books (See Top 100 in Books)