Amid a swirl of proposals for historic changes to the commissary benefit, the Defense Commissary Agency is dealing with more immediate issues — like making sure products get to store shelves.
At a recent commissary meeting, several officials expressed concern about a growing number of "vendor cuts," in which vendors ship smaller quantities than the commissary orders, causing shortages on the shelves.
"When a product isn't available, we are going to lose customers," Joseph Jeu, DeCA director, said at the meeting of the American Logistics Association.
Such vendor cuts generally run about 1 percent to 2 percent across the industry, but Jeu said the comparable rate for commissaries is running from 4 percent to 6 percent.
Noting that many manufacturers are performing well, Jeu challenged members of industry to do their part to improve deliveries to the military's stores.
Jeu also discussed DoD's fiscal 2016 budget proposal, now being considered by Congress. Proposed cuts to the commissary budget, which would require cutbacks in store hours and days, among other things, initially were rejected by the House Armed Services Committee.
"If Congress comes out with a different budget, obviously we'll adjust our plan," Jeu said, but added that until then, DeCA is basing its preparations on the plan submitted by DoD — while also trying to improve the benefit for customers.
"While there are a lot of uncertainties, we are marching ahead," Jeu said. "We are forging ahead with our effort to transform the agency, make it as efficient as possible, and provide the best possible service to our military families."
Pat Nixon, president of the American Logistics Association, praised DeCA for its approach in focusing on improving the benefit, even as major cutback proposals swirl around it.
Nixon said Jeu and other DeCA leaders are "focusing the efforts and brain power of the agency on the things they can control right now: sales, and savings and customer satisfaction."
Rising vendor cuts is just one issue DeCA is trying to address in the supply chain, said Michael Dowling, the agency's deputy director. For example, industry distributors have challenges related to driver shortages, weather and other issues. The commissary agency itself has challenges within the stores, such as hiring difficulties in many locations.
These things together "spell trouble," Dowling said. "We'll be giving serious consideration to what our options are, and what can we do to improve it. We've got to make sure the benefit is relevant to our customers. If it's relevant, they will come. If they come, they'll tell people how much value the benefit has for them."
Vendor cuts occur when DeCA places an order — for example, 500 cases of ketchup — but the manufacturer doesn't fill the full order, for a potential variety of reasons.
Often, Nixon said, manufacturers cut the needed quantity "based on something else happening in the marketplace."
Eric Swayzee, DeCA's logistics director, said he's especially concerned about the effect of vendor cuts on young families on the DoD Overseas WIC (Women, Infants and Children) program.
When the only WIC item the family can buy in a particular category is out of stock, it means the family must go without because WIC cannot be used in off-base stores overseas.
That program, administered by DoD, is similar to WIC programs operated by the states, providing vouchers for specified foods such as milk, vegetables, peanut butter and cheese, depending on the nutrition needs for low-income pregnant or postpartum women, and children up to age 5.
Richard Page, senior vice president of customer services for Coastal Pacific Food Distributors, which distributes products from manufacturers to commissaries on the West Coast, said the impact of vendor cuts is felt beyond the commissaries.
"A number of manufacturers have told us they have had the same issue outside the gate," he said.
He noted that the recent economic downturn led companies to tighten their belts, particularly in terms of inventory levels. Distribution centers were closed, or consolidated, which led to reduced inventory in the pipeline.
Among other DeCA initiatives discussed at the meeting:
*A push to improve customer service, which includes two "ambassadors" in each store, identified through peer nominations. This initiative includes back-to-basics customer service training and and how to engage with shoppers. For example, if a customer asks where a product is, the employee — regardless of his job — should take the customer to the product.
*Standardization of meat pricing. All continental U.S. commissaries will be on board by June 1. Since officials began rolling out the program last June, DeCA says customers have seen an extra $2.3 million in savings.
*Replacement of commissary agency technology, which will affect product ordering and cash registers. The rewards card program will expand, with programs like "diaper clubs" and "dog food clubs" offering special promotions.
Karen has covered military families, quality of life and consumer issues for Military Times for more than 30 years, and is co-author of a chapter on media coverage of military families in the book "A Battle Plan for Supporting Military Families." She previously worked for newspapers in Guam, Norfolk, Jacksonville, Fla., and Athens, Ga.
