LM Supply Chain Management Saves Navy Millions Annually

The U.S. Navy has announced a performance based logistics contract with Lockheed Martin to manage aviation tires leading to significant cost savings in inventory, warehousing and logistics expenses.

Under the contract, Lockheed Martin and partner Michelin North America will manage all Naval aviation tires, including an option for all variants of the F-35 Lightning II tires. The companies worked together for the past 14 years on the initial contract and delivered more than 440,000 tires with reliable, timely delivery worldwide.

“With our SCM+ supply chain management system, Lockheed Martin has accurately forecast tire usage to decrease the amount of warehouse inventory by 80 percent and provide the Navy cost savings since 2001,” said Laura Frank, vice president of Integrated Test and Logistics at Lockheed Martin Mission Systems and Training. “Our team is focused on delivering tires anywhere in the world reliably, affordably and quickly to keep aircraft flying.”

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The new performance based logistics contract has a $52 million three-year base plus two six-month options and an option for F-35 tires.  If the options are exercised, the total estimated value would be $131 million. In addition to supporting the Navy, the contract supports Australia, Bahrain, Brazil, Egypt, France, Greece, Italy, Japan, Korea, Spain, Taiwan, Turkey and the United Kingdom under the Foreign Military Sales program.

Lockheed Martin and Michelin North America will execute the program in Baltimore, Maryland.

Source: Lockheed Martin Corporation (NYSE: LMT)
Date: Mar 9, 2016