Defense Logistics Agency chief calls DNA marking one of "the four big things" that agency is doing to fight counterfeits entering military supply -- Audio >>

Transcript of audio portion:

JM (host): The Defense Logistics Agency is always busy, of course. The man in charge of the operation, Vice Admiral Mark Harnitchek, talks about that in part two of his exclusive interview with Federal News Radio. He says one of the biggest challenges facing the supply chain is counterfeits, and he tells Federal News Radio executive Editor Jason Miller knowing whether or not the DLA is actually getting what it’s buying is more than just a performance issue.

MH: A lot of the hardware and electronic components we use, the little bits and pieces, ultimately could go in an airplane. So there’s some real, not just performance issues, of course which is a big concern, but there’s some safety issues as well. So, to the extent that’s a problem, it’s a big problem, we have scoped it, we are doing sort of four things.

Four Anti-counterfeiting Initiatives

The one thing we’re doing is testing the inventory we do have, to ensure that, you know, if it has slipped through, we’re going to catch it with testing. The second one is only buying from qualified, either manufacturers or distributors. Folks that are reputable, that we have some significant level of confidence that they’re going to sell us the right part. The third one is we have a software program here that is much like what it is your credit card company does, so if we see in a procurement that something that seems a little odd, it will flag to a human that the human needs to go check that out, because perhaps the address isn’t right, their delivery times are too fast, if somebody who is a fairly new company that we’ve never dealt with before. So like much like when you use your credit card, if your buying patterns appear sort of out of the norm, the credit card company will either stop that transaction or will actually call you on the phone. So we’re also implementing that.

DLA Mandate for Microcircuits

And then the fourth one is for microcircuits and probably some follow-on commodities, we’re applying DNA marking. So when you look at a microcircuit, on the outside of that microcircuit, it has markings that say exactly what it is. We are now requiring our contractors to mark that with DNA. I don’t understand how that works, it’s a fairly complex process, but a relatively inexpensive process. So what happens is you’ll get a microcircuit with the DNA marking, and you do nothing more than shine the little light on it that your average TSA person has at the airport, and if the light shines the right way it’s DNA-marked and it’s ready to go, and if it doesn’t there’s probably a problem with it. So those are the four big things we’re doing that we’ll not only catch stuff that’s in the system, but prevent stuff that’s coming in.

JM: And I think one of the ways they do that is a plant DNA, they take a specific type of plant and they brush it on. It’s a fascinating technology that I think is catching on. Are you guys finding that these four different steps that you’re taking to ensure your supply chain is working?

MH: Probably a little early, because some of the stuff we just started, our decision to start DNA marking is a fairly recent decision, we’re just on the cusp here of using this new software program, so I think a lot of the efforts we have now are more directed at catching the stuff that we think is in the system now, but we think these proactive measures will keep stuff from coming in, and I’m fairly confident that we have all four of those working in concert. We’ll both catch the stuff that’s in the system now that’s not good, and more importantly will keep new stuff from coming in. So I’m fairly confident that the combination of all four of those will really sort of answer the mail with regard to counterfeit parts.

JM: One thing that I think is on everyone’s mind is budget. We’re not going to bring up the big “S” word but, we know that DoD’s budget is shrinking, every agency is facing that reduction. And give me a sense of, you’ve challenged your workforce to save money. Give me a sense of that challenge and how are they going about it?

MH: Yes, we’ve asked folks to save up to ten percent, they don’t stop at ten percent, they’re certainly fully empowered to exceed that. But we’ve asked, we’ve challenged ourselves here to save ten percent in the material that we buy, and then ten percent in our cost of operations over the next five years, and that just happens to be in the neighborhood of ten billion dollars.

So some if it, it’s just common sense stuff. We have lived pretty well here over the past ten years with regard to funding so I think we need to reinvigorate our notion about being judicious with what it is that we spend. So I’ve asked my folks to… be much more mindful in terms of how much is good enough. So we just need to be a lot more judicious about the money we spend, and really treat it like it’s our own.

JM: Are there any specific steps you’re taking, for instance some people do contests, some people do, you’ve heard of the save award, do you do anything similar to that?

Contests, Awards

MH: Yes, we’re doing director’s awards every quarter, for folks that sort of you know, score the most touchdowns or the most home runs. And we’re not limiting it to numbers, so we’re going to do one here next month, this is the first quarter we’re going to do this, and I will recognize those folks across the agency with an appropriate recognition and some sort of award.

So we’re going to actually incentivize good behavior by recognizing it in a big way, or you can recognize it in little ways. Just thanking people for what they do, telling folks they’re fully empowered to do smart things, that I trust them, that nobody knows this stuff like they do. And I expect them to do smart things, that they don’t need someone’s permission to go do that, they can just go ahead and do it. So we’re doing that.

Working Closely With Suppliers

A different relationship with our suppliers, we’re having what we call captains of industry meetings, when we’re having all of our big dollar suppliers come in, and we sort of lay out the challenge the secretary has laid on us in terms of the defense planning guidance and how that trickles down to money and engaging them in the conversation of what it is that we do that incur extra costs. And there are quite a few things.

So we’re working very closely with our industry partners on how to become more efficient and how to be equally as effective as we are now. So there’s a whole host of strategies that we’re pursuing here to ensure that we’re not just spending less money, but achieving the same effect by…spending less money.