Cost Management in a Tactical Environment: A Case Study of the 316th Expeditionary Support Command (ESC) in Iraq, 2007-2008

Abstract

This project investigates the distinction between cost-benefit analysis and cost management. Although there exist several precedents in which elements of the Department of Defense have practiced cost management, nowhere to be found was an example of applied cost management in a theater of combat. This project provides a case study of the 316th ESC, which may begin to fill that void. The 316th ESC's staff forecasted future consumption, supervised the execution of operational missions, measured the consumption of resources, and reviewed variances between what was planned and what actually happened. These steps raised questions that fed continuous improvement. Of the many projects initiated by the 316th ESC, the two that best exemplified the cost-management process were the institution of supply referrals and the reductions of Meal, Ready-to-Eat (MRE) inventories. Supply referrals significantly reduced inventories, lowered transportation costs, and improved customer wait time. The reduction of MRE inventories saved over $4.8 million in direct costs and saved Soldiers lives by reducing supply convoys. By planning, executing, measuring, and reviewing the consumption of resources, the 316th ESC was able to target inefficiency and overconsumption, while providing better service to its customers. It accomplished its mission at the right cost.