Lessons from Baghdad: the military has much to teach CEOs about supply chains and RFID

Chief Executive, The,  May, 2005  by Peter Galuszka

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Large plasma screens line a wall at the Joint Intelligence Operations Center (JIOC) at the U.S. Central Command headquarters in Tampa, Fla., which oversees military activities in Iraq and Afghanistan. Unmanned spy drones, firefights in progress or shipping containers on their way to remote spots can all be monitored in this hush-hush nerve center. But when a visitor enters, a crew-cut Marine colonel anxiously waves his hand. Screens showing top secret maps of Baghdad flip to CNN.

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A room like this might be the dream of any information-obsessed CEO. In fact, top executives have plenty to learn both from the U.S. military's successes and failures in seizing Afghanistan and Iraq, occupying them and hunting for the elusive Osama bin Laden and other terrorist operatives.

Besides fighting the war and chasing terrorists, Centcom generals must also be supply chain experts; they must ship enough food, fuel and ammunition to sustain 300,000 troops in 27 nations halfway around the world in climates ranging from hot deserts to frigid mountains. Supplying water "can be a huge challenge when it's 135 degrees outside," says Maj. Gen. William Mortensen, Centcom's logistics chief.

Centcom generals must come up with speedy solutions to poor planning decisions, such as one bad call to limit supplies of protective armor at the outset of the Iraqi invasion. Besides dealing with Defense Secretary Donald H. Rumsfeld's controversial and fast-changing military doctrines, they have to be diplomats and handle attaches from 65 coalition and other nations who occupy rows of mobile home-like structures next to the beige headquarters building in a concertina wire-enclosed part of Tampa's MacDill Air Force Base.

Inside Centcom's HQ, the buzzwords of the hour are "sense and respond" and "oodaloop," which means constantly reassessing tactics. Lessons learned include basics such as stating mission visions clearly and giving bright young officers room to make decisions on their own. The military is engaging in the first combat tests of radio frequency identification, or RFID, systems that, in the civilian world, are starting to replace ubiquitous bar coding and revolutionizing supply chains for companies such as Wal-Mart.

Thronged with intense troops armed with automatic pistols, Centcom doesn't seem like the headquarters of a multinational corporation. But it might as well be. Top commanders constantly jet back and forth to the forward HQ in the Persian Gulf nation of Qatar, to various Iraqi and Afghan cities, and to the Pentagon and Capitol Hill. While Centcom doesn't have its own combat force, it coordinates efforts of the other armed services assigned to it. Centcom officers don't get down to the tactical level managing battles, but they stay in regular, personal touch with the troops, trying to anticipate nasty surprises.

And there have been plenty of nasty surprises. Officers and troops have had to react quickly to unanticipated challenges with body armor shortages and the skill with which Iraqi, Syrian and other insurgents have deployed lethal "IEDs," or improvised electronic devices, also known in layman's terms as bombs. When the invasion of Iraq was launched in March 2003, logistical snafus and shortages made ammunition scarce, forcing troops to resort to using captured Iraqi lubricants and explosives. "Theater stocks of food barely met demand," according to a report last year by the Center for Army Lessons Learned, a military think tank at Fort Leavenworth, Kan.

Such problems beg a Centcom buzz-phrase. "If you cannot be an early adopter, then be a rapid adapter," says Brig. Gen. Mark Kimmitt, Centcom's planning chief. A 1984 Harvard Business School graduate, the tightly wired West Pointer appreciates how managerial issues resonate for both the business and military worlds. He also knows the differences between them. When CEOs err, they lose money. Generals can lose lives.

The body armor issue is a case in point. During the first Gulf War in the early 1990s, the Department of Defense amassed mountains of supplies in Saudi Arabia, Bahrain and Qatar before starting operations to kick Saddam Hussein out of Kuwait. Critics later complained that many supplies were never used. In any event, there never seemed to be shortages of body armor.

When the second Iraq War loomed in early 2003, Pentagon planners, following Rumsfeld's more fluid, faster-moving approach, decided that body armor would be distributed mostly to assault troops. But insurgents attacked others. Vehicles, especially Hummers and larger trucks used for supplies, were short of armor as well. The problem was compounded because some of the armor sets include ceramic plates that can be put in front and back vest pockets for added protection. When the war started, however, "there was a decision that only certain sets of our military would have that because of the combat role they'd be playing. [Then] we found that the counter-insurgency caused that decision to change," says logistics czar Mortensen.