Getting tires back on track

When the Navy put out an SOS on problems getting tires to aircraft around the world, engineers at Lockheed Martin Corp.'s big Moorestown complex saw an opportunity.

"Our strength is systems engineering, and logistics and supply-chain management are systems-engineering problems," said Robert J. Engel, director of lifetime support.

Six years later, after solving the Navy's problem, the company is taking on aircraft tire supply-chain management for the rest of the military, and preparing to expand its logistics business into other fields.

That is turning out to be a promising new area of business for Lockheed Martin's Moorestown operations, where 5,500 of the defense and aerospace company's 13,500-plus Philadelphia-area employees work.

Its primary mission is designing, manufacturing and updating the Aegis Ballistic Missile Defense System, now deployed on ships of the U.S. Navy and its allies worldwide. So it had experience with a global logistics network that it could leverage into dealing with a broader range of supply-chain management issues, Engel said.

The Navy's problem in 2000 was serious, said Michael E. Finley, the two-star admiral who at the time commanded the Northeast Philadelphia unit that handled global tire logistics.

"We could not afford to be without a tire. For want of a tire, a very expensive aircraft would not be able to operate," said Finley, who is now a director in Washington of PRTM Management Consultants L.L.C.

The Navy was experiencing shortages, he said, "and the reaction was to buy many tires and have large inventories. Often, the shelf life would run out before the tire was used."

Finley said he decided "there must be people who were able to manage tires more effectively, who would schedule production more effectively."

In competitive bidding, Michelin Aircraft Tire Co., a unit of the big tire-maker, and Lockheed Martin won the contract. It requires including products of rival tire-makers in the program.

Their success with the Navy led to a 10-year extension of the contract, valued at $700 million, from the Defense Supply Center, which added other branches of service to the program.

Tire logistics is a challenge.

The military requires 300 types, ranging from four-inch nose-wheel tires on small aircraft to 56-inch, 334-pound monsters for the eight-engine B-52 Stratofortress bombers.

Aircraft tires - particularly those for fighters that slam down hard on heaving aircraft carrier decks - have 21 to 22 plies, and are sophisticated and complex, Finley said.

And, unlike car and truck tires, where highly automated production lines turn out 30,000 tires a day, the demand is much smaller, said Brett L. Carnes, Michelin's director of military sales.

So anticipating needs avoids expensive emergency production runs. "We do an 18-month demand forecast each month," said Paul M. Bland, a retired Navy captain who is now a Lockheed Martin supply-chain program manager.

When the Navy managed its own tire purchases, 18 percent to 19 percent of orders were delayed. Now, inventories have been drastically reduced, and virtually all orders are filled faster than the Navy's requirement, which is 48 hours for domestic bases and 96 hours for overseas bases.

"Last month, 99.3 percent of our orders were filled on time," Bland said.

The military keeps equipment much longer than most private enterprises. Many of its aircraft are older than the pilots who fly them, and that adds to the logistical challenge.

But Lockheed Martin engineers deal with the mixture of old and new - and finding parts for the very old - all the time.

One section at Moorestown has a working 1970s-era missile-defense system taken from the USS Vincennes, a Ticonderoga-class Aegis cruiser, when it was decommissioned in 2005. Its components include computers and the old round yellow radar screens of another era.

That equipment still works, and remains in service on many warships. Engineers use it to test new equipment that upgrades its ability to meet new threats.

So they were on familiar turf engineering a supply chain to support the most modern aircraft and planes that first flew in Vietnam and are still in service.

Michelin teamed with Lockheed, said Carnes, its military sales director, because "they understood the whole system. We knew we would be only as good as our logistics provider."

In the Lifetime Support Command Center in Moorestown, one wall is covered by big screens displaying the status of orders in process. Nine logistics analysts at computer terminals facing the big screens solve problems that arise.

The process is so automated that "95 percent of the orders fly through here hands-free," Engel said.

Finley, the retired admiral, said: "From onset, they were able to do very well. Shops became so confident, they were able to reduce inventory. The program was, and continues to be, an overwhelming success."

Vincent M. Dothard, Lockheed Martin's director of supply-chain management programs, said his team was working to expand its military logistics programs to include fleet management, chemical and petroleum products - and into other areas he cannot yet disclose.

"What we've done so far," Dothard said, "has been good for the war fighters, and good for taxpayers, too."