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Home   About   Membership   Meetings   Government Affairs   Members Only July 30, 2010
 
Executive Briefing
 
 

American Logistics Association
63rd Annual Convention

October 19-21, 2010
Hyatt Regency, Bellevue, WA
Click HERE for details!

President's Message

Military resale on the firing line:

In recent weeks there has been an increasing regularity to the attacks on the military resale system as a way to refocus the mission of DoD and reduce funding requirements. This most recent venture comes from the "Center for Strategic and Budgetary Assessments". In testimony delivered before the House of Representatives on 20 July, the following proposal was offered: Refocusing on the core business of defense

The second area of savings to explore is reducing, eliminating, or transferring programs and activities that are not part of the core business of defense. DoD's mission is "to provide the military forces needed to deter war and to protect the security of our country." Yet many programs and activities funded within the DoD budget, including some items that have long been part of the defense budget, stray far from that mission. Three areas in particular that should be examined are the military exchanges, commissaries, and DoD primary and secondary schools in the United States. DoD funds and operates three separate military exchanges (the Army and Air Force Exchange, the Navy Exchange, and the Marine Corps Exchange) which are essentially retail stores offering a wide array of consumer goods and services, similar to a Wal-Mart or Target but located on a military installation.

The first exchanges were established more than a century ago to provide troops and their families with an affordable retail outlet in locations where little else existed. However, with the increasing availability, accessibility, and competitiveness of low-cost, private-sector retail chains both within the United States and around the world, there is no longer a compelling justification for maintaining DoD's network of exchanges. The Sustainable Defense Task Force's recommendation, which follows a budget option outlined by the CBO last year, is to consolidate the three exchanges into one organization and require it to pay all of its operating costs from sales revenue for a projected savings of $200 million annually. DoD should also consider simply eliminating the exchanges or selling them to a private operator since operating a chain of retail stores is far outside the core business of defense.

DoD also funds and operates a chain of grocery stores, known as commissaries, which sell food and other household goods at or below market prices. These stores date back to 1825 when Army posts began allowing officers to purchase items at-cost for personal use from commissary department storehouses. The use of these stores expanded over time with the intention of providing on-base retail options for Service members and their families. However, times have changed over nearly two centuries, and the availability of a wide array of modern, private-sector grocery store chains — even at locations once considered remote posts on the frontier — has negated the need for DoD-operated commissaries. Currently, the commissary system operates with an annual subsidy of $1.3 billion from the defense budget. As with the exchanges, DoD should consider eliminating the commissaries or selling them to a private operator. A portion of the savings from the annual subsidy could be used to increase the subsistence allowance by $300 per year, which the CBO estimates would fully compensate for the savings the average military family would lose from closing the commissaries. The resulting savings for DoD would total some $900 million annually.

The source recommendation referenced here, and grasped by the Sustainable Defense Task Force, is the Congressional Budget Office budget options published in August 2009. The CBO traditionally issues a compendium of budget options every two years. In this published Volume 2 of the report the recommendations are specific and detailed:

Section 050-18: Consolidate and Encourage Efficiencies in Military Exchanges

Section 050-19: Consolidate the Department of Defense Retail Activities and Provide a Grocery Allowance to Service Members

Similar recommendations are to be found in the Defense Business Board recommendations published July 22, 2010: "Reducing Overhead and Improving Business Operations," specifically from chart 28 of the presentation.

In spite of assertions to the contrary, there are substantial gains yet to be made by making them (Defense Agencies and Field Operating Activities) more cost-effective through business processes, consolidations of overhead functions, elimination, privatization, devolving, and merging. More on these recommendations can be found at:

Panel: DoD should cut 111,000 civilian jobs
Read the Full Story
Federal Times, John T. Bennett
An influential Pentagon advisory board will recommend that Defense Department Secretary Robert Gates slash the civilian work force by more than 111,000 people and drastically pare the military's combatant command structure as ways to save billions of dollars.

The problem with these assertions is that viewed in isolation, they appear to somewhat compelling, but they do not in any capture the value of the programs they challenge. The fact is the resale programs are:

A benefit that works for DoD, taxpayers and patrons

Some sectors are calling for outsourcing or reducing commissary benefits or for military personnel. It's a bad idea.

  • Don't increase food prices for military people at a time when food stamp usage is up 70 percent. Privatization would place thousands more on food stamps.
  • Cost of living allowances and military pay, particularly overseas, would have to be increased to offset the increased household costs. Retirees would be left out in the cold.
  • Commissary patrons are already strapped with a five-percent co-pay—it’s called the surcharge. Don’t increase that co-pay to 100 percent of costs.
  • If the privilege were taken away, commissary patrons would need to be paid back for the nearly $5 billion that they have spent upgrading commissary facilities and systems.
  • Military family support has been a hallmark of the First Lady, the Obama Administration, and the National Security Council. Commissaries are a cornerstone of these support programs.
  • The loss of this benefit would break a long-lasting covenant between military personnel and their families and the Government. The American people have a reciprocal commitment to military people for their sacrifice and service.
  • Exchange sales would suffer and exchange-generated funding to support on-base community services such as child care and youth centers would decline.
  • 10,000 military family members would lose their jobs.
  • Commissary funding has remained constant but benefits have been improving. It's the number one-ranked benefit but its cost has remained steady while programs such as medical care, housing, and family support have doubled and tripled over the past five years.
  • Consolidation of separate Service commissary systems in 1991 saved hundreds of millions in overhead. Use of commercial distributors saved $600 million in taxpayer-financed inventory costs at patron expense.
  • Eliminate waste in Defense before attacking core benefits.
  • Cost trajectory would have taken DeCA's cost to over $2 billion. DeCA efficiencies since 1991 have reduced this cost 50 percent.
  • The commissary system is one of the only Government agencies that a clean audit and is at the top of the list for accountable Government organizations.
  • DeCA is an example of a public/private partnership that works even when other government enterprises are failing.
  • It is illegal to privatize commissaries.
  • There is a 9 to one return to the taxpayer on dollars invested in military resale.
  • Reducing benefits is false economy because we lose good people. It costs $150,000 to $250,000 every time a military member leaves the service. For doctors and pilots, it costs $1 million.

So rather than go after programs that work why not fix what doesn't!

Pentagon faulted on control of fund
Read the Full Story
The Washington Post, Ernesto Londono
Because of poor record-keeping and lax oversight, the Department of Defense cannot account for how it spent $2.6 billion that belonged to the Iraqi government, according to the inspector general for Iraq reconstruction.

Your ALA staff is working aggressively to educate key DoD and Congressional decision makers about the importance of these key resale and MWR benefits. This is one of the key missions of your association and we are active and engaged!

ALA recognizes two outstanding leaders:
Each year the ALA Board of Directors awards the ALA Distinguished Service Award to an individual who is deemed to have made a lasting contribution to improved quality of life for our troops and their families. This year, the BOD voted unanimously to award this prestigious award to two such individuals, Senator Daniel Akaka and Congressman Norm Dicks.

Senator Akaka has been a life long advocate for our troops and their families and serves as Chairman of the Senate Veterans Affairs Committee and serves on the Senate Armed Services Committee. The award will be presented on 20 August at the banquet celebrating the 2010 Hawaii Food Show. Please join us as we recognize this great American.

Congressman Norm Dicks has been a recognized stalwart and passionate advocate on behalf of our troops and their families. He serves as Chairman of the Appropriations Subcommittee on Defense. Congressman Dicks will accept the Award at the National Convention where he is scheduled to address the members.




Patrick B. Nixon
President, ALA





Washington Update


Senior DoD Brass, CEOs to discuss Pentagon cost-cutting effort
Defense News    Share    Share on FacebookTwitterShare on LinkedinE-mail article
U.S. Defense Secretary Robert Gates and other top Pentagon officials will meet with more than a dozen U.S. defense industry executives to discuss his efficiencies effort. Gates will be joined at the session by Deputy Defense Secretary William Lynn and Pentagon acquisition executive Ashton Carter. More

Guam growing in global importance
Kuam    Share    Share on FacebookTwitterShare on LinkedinE-mail article
The main Department of Defense official who is now overseeing the military buildup is on island this week to see first hand how the Guam will be impacted by the relocation of U.S. Marines from Okinawa to the island. And he says Guam growing is of global importance. More

Democrats split as House backs war funds
New York Times    Share    Share on FacebookTwitterShare on LinkedinE-mail article
The House of Representatives agreed recently to provide $37 billion to continue financing America's two wars, but the vote showed deepening divisions and anxiety among Democrats over the course of the nearly nine-year-old conflict in Afghanistan. More

Defense races the clock on 2005 BRAC implementation
Government Executive    Share    Share on
FacebookTwitterShare on LinkedinE-mail article
The Defense Department has just 14 months left to meet the deadline for implementing the largest base realignment and closure plan in history. Contracting and construction delays have left no margin for further delays in the department's plans to relocate 123,000 personnel and execute hundreds of actions affecting more than 800 Defense locations by Sept. 15, 2011. More

Central Command nominee firm on Afghan mission
USA Today    Share    Share on FacebookTwitterShare on LinkedinE-mail
article
Marine Gen. James Mattis, nominated to head the command that oversees wars in Iraq and Afghanistan, sought to assure the United States' allies and enemies that the U.S. is committed to the region despite the massive leak of classified information that has shaken support for the war. More

Watchdogs labor to expose liars about military exploits
Kansas City.com    Share    Share on FacebookTwitterShare on LinkedinE-mail article
Army Capt. Joshua Howard ran across the newspaper story online about a Korean War veteran who was to be inducted into the Kansas National Guard Hall of Fame. It told how this veteran received the military's No. 2 and 3 awards for valor, along with two Purple Hearts, one pinned on by Gen. Douglas MacArthur. But the more Howard read, the more "those medals and his account of it all didn't add up," he said. More

Commissary News




Winn-Dixie to cut 120 jobs, close 30 stores
Bloomberg Businessweek    Share    Share on FacebookTwitterShare on LinkedinE-mail article
Winn-Dixie Stores Inc. said recently that it will close 30 of its underperforming stores and cut more than 120 jobs to cope with weak sales. The company said the difficult economic and retail environment have hurt its sales. As a result, it will close certain stores and an unspecified number of employees at those sites. More

Theo Albrecht, Aldi co-founder, dies at 88
The Seattle Times    Share    Share on FacebookTwitterShare on LinkedinE-mail article
Theo Albrecht, the co-founder of Germany's worldwide discount supermarket chain Aldi and one of Europe's richest men, has died at age 88. Albrecht was the driving force behind his chain's internationalization, expanding stores to France, Spain, Portugal, Poland and the United States, among other nations. More

Price Chopper promotes local produce
Supermarket News    Share    Share on FacebookTwitterShare on LinkedinE-mail article
Price Chopper Supermarkets is highlighting locally grown produce by offering its Facebook fans a coupon for $5 off a $15 purchase. The offer is designed to promote Price Chopper's practice of buying produce from farms in Massachusetts, Connecticut, Pennsylvania and New York. More

Smart Trucking
Supermarket News    Share    Share on FacebookTwitterShare on LinkedinE-mail article
Food retailers in recent years have paid a great deal of attention to controlling the energy consumption of their stores, investing in new lighting and refrigeration equipment and energy management systems, among other technology. Another ongoing user of energy — private trucking fleets — has been the subject of considerable scrutiny as retailers seek to control costs and lessen their impact on the environment. More

Organic growth
Supermarket News    Share    Share on FacebookTwitterShare on LinkedinE-mail article
Despite usually being a little more expensive than conventional produce, and despite naysayers who continue to claim that organic consumers are receiving no added benefit for their extra money, dollar sales of organic produce grew more than 12 percent in 2009, according to the 2010 Organic Industry Survey. More

Change may be in the bag at a grocery store near you
Sandy Post    Share    Share on FacebookTwitterShare on LinkedinE-mail article
A proposal to ban plastic bags from Oregon retailers' check-out stands gained momentum this month as the mayor of Portland said he would eventually pursue outlawing the bags in that city and Fred Meyer announced it will stop offering them as an option at check-outs in its 10 Portland stores. More

Congress begins work on chemical safety overhaul
Food Safety News    Share    Share on FacebookTwitterShare on LinkedinE-mail article
The House of Representatives is starting to move legislation that would fundamentally overhaul chemical laws for the first time in over three decades. The Toxic Chemicals Safety Act, H.R. 5820, introduced recently by Reps. Bobby L. Rush and Henry Waxman, seeks to reform the federal Toxic Substances Control Act, enacted under President Ford in 1976. More

Convenience foods continue vast hold on retail market, report finds
Drug Store News    Share    Share on FacebookTwitterShare on LinkedinE-mail
article
Fresh convenience foods have experienced a recessionary boon, according to a new study by Packaged Facts. The new study — Fresh Convenience Foods in the U.S. — the fresh convenience foods market grew by 5 percent in 2009 to reach sales of $22 billion and expanded marketing and merchandising efforts by convenience foods companies drove may drive sales up 28 percent to $29 billion by 2014. More

Supervalu reports Q1 2010 Results: Overall sales down 9.2 percent
Kantar Retail    Share    Share on FacebookTwitterShare on LinkedinE-mail article
Supervalu has reported its financial results for the first quarter ended on June 19, 2010. For the quarter, overall sales declined 9.2 percent to approximately USD 11.5 billion. Retail food segment sales comprised 77.5 percent of overall sales, down from 77.6 percent of overall sales in the first quarter of 2009. More

A&P first quarter results announced
Kantar Retail    Share    Share on FacebookTwitterShare on LinkedinE-mail article
A&P announced a 7.2 percent sales decrease for the first 16 weeks to 19 June 2010, down to USD 2.6 billion from USD 2.8 billion last year. Net loss increased by 88 percent to USD 112.6 million, compared to a net loss of USD 56.1 million in the previous year. More
Commissary Web Posts

The following commissary items were posted to the ALA Website as of 10 AM, 29 July 2010:

PROMOTIONS
  • Fall Club Pack, Far East & Alaska Quantities.
  • Valentines Day Promotion Package — 2011.
  • DP #17, CONUS Shipper and Promotion Quantities.
  • Holiday Ham 2010 Items Selected.
  • DP #18, Update #1.
  • DP #16, Update #2.
NOTICES TO TRADE
  • 10-106 First aid, Eye Care, Foot Care.
  • 10-109, Winter, Spring, Summer and Fall Club Pack Program for 2011.
  • 10-110, Meal Solutions Promotion.
  • 10-111, Store Reset — Eielson.
  • 10-113, Store Reset — Fairchild.
  • 10-114, Store Reset — Anchorage.
  • 10-116, Store Reset — Fort Jackson.
  • 10-117, Store Reset — Fort Benning.
  • 10-118, Promotion Calendar — 2011.
  • 10-120, Hot Cereal.
  • 10-122, Chilled Lunchmeat Category Review.
  • 10-121, Cancellation of Ft Lee Reset.
  • 10-123, Rice.
  • 10-124, Gravy & Seasoning Mix.
  • 10-125, Spices & Seasoning.
  • 10-126, Store Reset Date — Ft Lee.


MISCELLANEOUS
  • Adds/Changes/Deletes for week 10-29 — Corrected Copy and 10-30.
  • Guard & Reserve On-Site Sale Schedule updates.
  • Commissary Council 21 July 10 Meeting Slides.
  • Reset Schedule, Update #7.


Exchange News


Disputed chemical bisphenol-A found in paper receipts
The Washington Post    Share    Share on FacebookTwitterShare on LinkedinE-mail article
As lawmakers and health experts wrestle over whether a controversial chemical, bisphenol-A, should be banned from food and beverage containers, a new analysis by an environmental group suggests Americans are being exposed to BPA through another, surprising route: paper receipts. More

Natural gas vehicles and proposed US subsidies
Reuters    Share    Share on FacebookTwitterShare on LinkedinE-mail article
U.S. Senate Democrats recently unveiled an energy bill that includes almost $4 billion in subsidies for natural gas powered vehicles as part of a plan long-championed by oil and gas executive T. Boone Pickens. There are about 1,300 natural gas stations compared to almost 110,000 traditional gasoline and diesel stations in the United States. More

Fast food ease, taste outweigh fear of fat
Pittsburgh Tribune Review    Share    Share on FacebookTwitterShare on LinkedinE-mail
article
The price might be right, but the nutritional value of fast food usually is not. Did you know that junior bacon cheeseburger has 650 milligrams of sodium and 320 calories? It probably contributes to the worsening obesity problem in our country. But what can you do to battle the bulge in the face of convenience? More

Restaurant grading begins in New York
The New York Times    Share    Share on FacebookTwitterShare on LinkedinE-mail article
Soon several restaurant windows in New York are quite likely to display a new attraction alongside the usual menus and reviews: a brilliantly colored placard bearing a letter grade. But much less visible is the months-long effort by city health officials to prepare for this day — the debut of their controversial new system to rate the cleanliness of the city's more than 24,000 restaurants with an A, B or C. More

Stop and Shop installs solar panels on stores in Massachusetts, Connecticut and New Jersey
PR Newswire    Share    Share on FacebookTwitterShare on LinkedinE-mail article
Stop and Shop recently announced that it has completed the installation of solar panels on eight of its stores in Mass., Conn. and N.J. The solar panels will reduce the amount of energy consumed by these stores by more than seven percent. The completion of this project marks an extension of the company's commitment to reduce its carbon footprint by 20 percent by 2015 using 2008 as a baseline. More

Pierre Foods to merge with Advance Food Co., Advance Brands
Convenience Store News    Share    Share on FacebookTwitterShare on LinkedinE-mail article
Senior management from Pierre Foods Inc., Advance Food Co. Inc. and Advance Brands LLC announced that the boards of directors of all three companies unanimously approved and entered into a definitive merger agreement. The newly combined company will be called Advance Pierre Foods and be a supplier of value-added protein and handheld convenience food products. More

4 DAYS

TO AAFES AUTOMATED COMPLIANCE CLAIM PROGRAM


WHEN DOES THE NEW AUTOMATED COMPLIANCE CLAIM PROGRAM BEGIN?

Starting 1 August 2010, AAFES will implement automated compliance claims for Early/Late shipments to CONUS DC’s and Facilities. The first stage of the automated program will include orders of $300 or more for suppliers with annual purchases of $1 Million or greater (or approx. 757 of AAFES top suppliers). All remaining CONUS suppliers will be included in automated compliance claims at a later date.

WHY IS IT IMPORTANT TO AUTOMATE COMPLIANCE CLAIMS FOR EARLY or LATE SHIPMENTS?

The AAFES Vision is "To be our Customers' First Choice!" which means AAFES must provide products our customers' expect when walking in our stores. Benefits of automating compliance claims are many and include:

  1. reduced 3rd party audit claims
  2. timely product shipments
  3. optimal inventory levels and
  4. improved in-stock position for our customers.
The new automated shipping claims will be generated in a 'real-time' environment where buyers and suppliers can address issues as they occur. Automating the program will ensure AAFES optimizes supply chain efficiencies which is imperative with the roll-out of RMS Allocation.

WHERE TO FIND DETAILS ON THE AAFES AUTOMATED COMPLIANCE CLAIM PROGRAM?

Additional information concerning AAFES Compliance Claims is posted to the 'Doing Business with AAFES' website. Orders shipped or received outside of the specified timeframes are deemed either early or late and are subject to recovery charges as stated in the published AAFES Compliance Claim Program. For complete program details select: AAFES COMPLIANCE CLAIM PROGRAM

DETAILS of Early/Late Segment of the AUTOMATED AAFES COMPLIANCE CLAIM PROGRAM include:

All claims will generate systematically using the following criteria:

For FOB origin orders, the claim is calculated by comparing the Scheduled Ship Date listed on the purchase order to the first "Actual Pickup Date", which is the date the AAFES carrier takes possession of the ordered merchandise. A claim will automatically generate once it is determined that the ship date occurred outside of the supplier window of 72 hours before/after the scheduled ship date:

FOB Origin PO:

  • Shipped >72 hours before/after Scheduled Ship Date – SSD (Scheduled Ship Date)
  • Supplier window is 7 days…3 days either side of SSD

For FOB destination orders, the claim is calculated by comparing the initial receipt date with the Requested Delivery Date listed on the purchase order. A claim automatically generate once it is determined that the receipt date occurred outside of the supplier window of 72 hours before/after the received delivery date:

FOB Destination PO:

  • Rec'd >72 hours before/after Required Delivery Date – RDD (Required Delivery Date)
  • Supplier window is 7 days…3 days either side of RDD

WHAT DO SUPPLIERS NEED TO DO TO BEFORE THE 1 AUGUST "GO LIVE" DATE?

Suppliers should ensure that shipping locations, order preparation times and shipping times are accurate and that AAFES Buyers are aware of any updates/changes.

WHO SHOULD SUPPLIERS CONTACT FOR QUESTIONS OR UPDATES?

Suppliers can work with the buyer directly to ensure that accurate information is entered into the AAFES Systems.



ALA Member Benefits – Affinity Program
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Local store owner spreads 3/50 message to 'think global, buy local'
Press of Atlantic City    Share    Share on FacebookTwitterShare on LinkedinE-mail article
Called the 3/50 Project, it encourages people to think of three independently owned businesses they would miss if they closed, and spend $50 each month on goods and services from those three. The project was launched in March 2009 by Cinda Baxter, a Minneapolis retail consultant. More


Hampton Roads ALA Benefit Luncheon for AREA & NEREA
December 15
12 noon to 3 p.m., EST

Sheraton Virginia Beach Oceanfront Hotel
36th & Atlantic Avenue


Featuring Major General Bruce A. Casella
Commanding General, Army and Air Force Exchange Service

With a 2nd Guest Speaker TBA soon!


Luncheon Buffet with a great silent auction!
Remit $40 to Hampton Roads ALA. (Admission is $25 for Resale.)
Return to Paul Wehner, MDV Nash Finch, PO Box 29, Norfolk, VA 23501

Companies interested in sponsoring the luncheon are encouraged to contact Cory Belkov, HRALA at belkovc@wattspohn.comor call 757-831-8208.

All sponsor proceeds will be divided equally with one-third going to NEREA, one-third to AREA, and one-third to the HRALA Scholarship Funds.




Washington Update

New PT uniform coming soon
Military.com    Share    Share on FacebookTwitterShare on LinkedinE-mail article
After much planning, anticipation and constructive feedback, the Army Air Force Exchange Service and the Air Force Uniform Office officials have partnered to bring an improved physical training uniform to select military clothing sales stores. More
 


Grunt Apparel, Inc.

Grunt Apparel specializes in original military inspired designs in silk screen & embroidery at low prices. Licensed by all military branches.
More info


Hubert Company


Protect your resources with Hubert Brand Swivel Smokers Outpost and QuicKlean™ Oil Filtration Protective wear

See more


Tyson Foods, Inc.

Tyson Foods is dedicated to bringing you quality, service, and support you need to drive sales. More

 

Executive Briefing
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