The Military Sealift Command

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Executive Summary

The Military Sealift Command or MSC was designed to aid in the logistical and transportation needs of the United States Military, and specifically handles the transportation, supply, and personnel needs of the U.S. Navy and other seafaring vessels in the U.S. military.

Today, the MSC has three main divisions, including the Naval Fleet Auxiliary Force, the Special Missions Program, and the Prepositioning Program. Each subdivision operates under the jurisdiction of the federal government and employees a variable mixture of civilian mariners and enlisted officers.

The purpose of this strategic plan is to further describe the current configuration of MSC, its operational nature, the overall vision and value system, and the foreseeable risks and opportunities in the future. Also, this plan will detail the implementation of the most effective business strategy for the plan future endeavors as well as briefly outline a basic risk management plan.

Based on available information, and a clear assessment of the foreseeable risks and responsibilities into the future, this strategic plan will suggest that the best operational framework in which MSC can operate is within an entrepreneurial system, where certain, logistical and routine needs are meet through the contracting of private entities who meet all the criteria for federal employment and contracting.

Through this delegation of responsibility, MSC can more easily handle the more immediate needs of coordinating the logistical and transportation support needed by the U.S. Military and associated research and development vessels.

Company Background

Prior to 1949, marine transportation was controlled by four separate governmental agencies.

However, after the end of World War II, it was determined that a singular entity would be better prepared to handle and supervise the multi-faceted arena of sea transportation and logistical support for the United States Department of Defense. Thus, the Military Sealift Command (MSC) was formed. The MSC has always assumed the responsibility for ocean transportation for the military and other governmental entities.

In modern times, MSC is utilized by the U.S. military and their civilian counterparts for the logistics and transportation of such things as fuel, humanitarian aid, research vessels, and military and civilian maritime personnel around the world.

In addition, MSC vessels have also played a vital role in the nation’s fight against terrorism.Nearly 16 billion gallons of fuel as well as 110 million tons of supplies and equipment were delivered by MSC in 2008. In addition, medical vessels operated by MSC have been able to treat thousands of patients worldwide.

Organizational Mission

The organizational mission of the Military Sealift Command is fivefold:

provide quality services to our clients, regardless of their needs,
provide quality assistance to help them achieve their short and long term goals,
to provide support to the Global War on Terrorism,
to develop and maintain a support system for all staff and employees,
ensure that our resources, including maritime and personnel are always able to meet the needs of our clients, now and in the future.

In order to meet these goals and the changing demands of the maritime environment, the MSC is divided into three main subgroups. These subgroups include the Naval Fleet Auxiliary, the Special Mission Program, and the Prepositioning Program. The organizational structure of each of these sub-groups is described in the following paragraphs.

Naval Fleet Auxiliary Force

This subdivision of MSC contains more than 40 ships which are used for organizing the supply to the US Navy vessels by sea. The ships deliver such things as food, fuel, ordnance, replacement parts, mail service, and other necessary supplies. This resource allows naval vessels to remain at sea, and to have the ability to respond quickly during times of military or humanitarian need.

Moreover, the Naval Fleet Auxiliary Force is also responsible for towing and salvage operations along with medical and rescue services. Individual ships are manned by a crew of civil service mariners, and may contain a small group of naval personnel aboard for operational support. The vessels are also operated under governmental ownership.

Special Missions Program

This section of MSC operates a total of 25 vessels which provide operational platforms and command vessels for both research and military ventures. Routine missions may include such things as oceanographic surveys, underwater surveillance, as well as hydrological and acoustic surveys, and various other missions involved in wartime support. These services are supplied to such entities as the U.S.

Fleet Forces Command, the Oceanographer of the Navy, the U.S. Air Force, the Strategic Systems Programs Office of the U.S. Navy, and the United States Environmental Protection Agency to name a few.

The majority of ships within this section of MSC are operated by civilian mariners that work for private companies contracted by MSC. Also, some ships are operated by a hybrid crew, consisting of both civilian and military personnel that work under the supervision of a U.S. Navy captain.

Prepositioning Program

This portion of the MSC aids in the readiness strategy of the United States Military. Prepositioning is the act of placing military equipment and key supplies on designated vessels located in significant locations at sea.

This ensures the availability of resources during times of increased conflict, war, a humanitarian operation, or other contingency. A total of 32 pre-positioning ships are in use by MSC to support all branches of the U.S. military and coalition allies.

The Prepositioning fleet includes vessels owned by the U.S. government, chartered vessels, and ones that have been activated from the Maritime Administration Ready Reserve Force. The private contractors employed by the federal government are responsible for selecting the candidates for the crew of the ships which consist mainly of civilian mariners.

Vision

The overall vision of the Military Sealift Command is to deliver the most innovative and efficient delivery of resources and solutions within the maritime community (Military Sealift Command organization).

Value Statements

Above all else, Military Sealift Command values the people that make the realization of its vision and mission a reality. These include the employees, the clients, both military and civilian, and those who are affected by what we do for the military community, here and abroad. MSC also places a high value on maintaining a transparent and quantitative decision making process that is highlighted by professionalism, efficiency, and innovation.

Environmental Scan

In order to assess and create an effective strategic plan, it is necessary to conduct an assessment of the external, internal and economic factors that will affect the Military Sealift Command. The following subsections will provide a summation of those factors.

External Factors

The following factors have been designated as external factors that would have a significant influence on MSC: access to global ports and sea-lanes, poor or inadequate infrastructure development, type of information and communication technology utilized, government regulations and fiscal restraints, and investment in new technology.

Access to Global Ports and Sea-Lanes

In the changing world of global dynamics, the transportation of materials and personnel to international ports and through international sea-lanes is becoming more crucial. Perceived opponents to the successful transportation of goods and services would undoubtedly try to prevent access to certain global ports and sea-lanes, critically affecting the ability of MSC to provide quality resources and personal to our clients.

The freedom of access is crucial to the global economy as it facilitates the movement of both resources, and the natural growth and expansion of free trade. The inability of MSC to travel effectively would mean that that the supported presence of the United States Navy has the potential to be adversely effected in a number of established locations.

Infrastructure Development

Another significant external factor facing the MSC is the challenge of poorly developed or inadequate infrastructure in areas that the U.S. has shown future interests. The areas in question often lack the transportation and logistical necessities found in most developed areas, including airports, seaports, and established road networks.

In addition, many of these areas have poor or inadequate water resources, poor sewer or electricity services. These shortcomings will most likely become a direct hindrance to the deployment of military personnel and their support personnel by the United States and allied countries in a response to humanitarian necessity.

Information Technology and Communications

While current information technology and communication systems are important to the success of any military operation, the advancement of technology in this area also has the potential to cause problems for the military as well.

Perceived opponents also have the opportunity to gain significant technological advances, including the technology currently being used by the United States military forces. These acquired technologies can then be utilized to attack, disrupt, or even degrade the ability of the U.S. military to communicate effectively.

Governmental Regulations and Fiscal Restraints

Since the military, and indirectly MSC operate under the supervision and guidance of the United States government, they must adhere to any and all regulations, budgetary restraints, and laws that could directly or indirectly affect them.

Currently, the United States government is having to manage a significant budget deficit which has affected many military operations, and therefore the ability to utilized support companies such as MSC.

Investment in New Technology

Based on the growing determination of the perceived enemies of the United States to utilize new and innovative technology to win the war on terrorism, it is essential that the United States government in new and remodeled programs, improved platforms. This will ensure the continued dominance of the United States military and their allies on the global stage.

Internal Factors

In addition to numerous external factors that influence the strategic planning of MSC, there are also a number of internal factors that must be accounted for. These include various strengths and weaknesses that have been revealed by a detailed analysis of the internal environment.

A SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis was conducted for Military Sealift Command. It focused on four main areas, including resources, funding, naval-maritime relationships, and workforce.

MSC Resources

At the current time, MSC operates approximately one hundred and eleven non-combatant civilian-crewed ships worldwide. The MSC also operates approximately fifty military ships that are currently on standby, ready for military use. The headquarters of MSC is located in Washington D.C., and auxiliary branches are located throughout the county.

MSC employs approximately 8,000 employees that are comprised of both military and civilian personnel. In addition, another 4,000 civil servants derived from both the United States Marines and federal governments are utilized to strengthen its non-combatant naval auxiliary and special mission ships.

Funding

There are two major sources of fiscal resourcesfor MSC. These include the transportation working capital and the navy working capital fund. Each funding source is designated for a set of unique purposes.

The purpose of the Transportation working capital is to finance the operation of sealift services, while the main purpose of the navy working capital fund is to support the naval taskforce, operations, and other military entities. It should be noted that MSC does not obtain funding through its command operations.

Operational funding is provided through either a working funds capital, or from invoicing of MSC clients. These are the financial resources utilized by MSC to finance its command operations. MSC is a non-profit making entity, and therefore no profits are built into the budget.

Naval-Maritime Relationship

According to the Voluntary Intermodal Sealift Agreement (VISA) of the 1990s, an agreement was reached between the US government and the maritime industry. The purpose is to provide joint planning and assured access for the commercial ships at rates agreed upon in cases of national emergency.

VISA allows the United States military to use the offshore transport equipment as well as private ships during emergencies, and in times of war.

The treaty also allows the government to provide the maritime industry subsidies, and or contracts that involve the transportation of military equipment in times of peace. This enables the establishment of a relationship between the private firms and military, which can later be used during times of conflict.

Workforce

MSC’s workforce consists of approximately 9,000 employees worldwide. Approximately 80% of those employees are working at sea. The majority are mariners who are employed through a civil service in their respective federal governmental agencies. Other portions of MSC employees work for private firms as commercial mariners, civil servants, or as members of the reserve military.

All MSC ships are operated by civilians, as opposed to naval vessels which are operated by military personnel. While operated by civilians, MSC vessels still may be involved in military operations during times of war or conflict through the transport of military supplies, and communication equipment.

This is accomplished through the use of small military compartments and departments that are specifically designed to facilitate these operations.

Strength Analysis

Based on the information provided above, MSC strengths include a highly trained workforce and a management system that is focused on both quality and safety considerations.

Weakness Analysis

Despite its apparent strengths, there are a number of weaknesses that have become apparent in the analysis of MSC. One such weakness is the relatively slow hiring process for new shoreline employees. Another weakness is the scarcity of available resources for use by MSC to support military operations in the forms of force sustainment, delivery of combat equipment, fuel, vehicles, ammunition in times of war and peace.

This apparent shortfall of supplies has, unfortunately led to misappropriate use of funding in the past. This misuse is due in part to decisions made during mission implementation, where the priorities are not financial, but rather logistical.

Another weakness, specific to military personnel is the added performance pressure that is experienced due to high turnover rate and the expectation of high performance and promotions. Often these personnel face the dilemma of choosing between careers and professional interests when they are involved in the decision making process (MSC, 2010).

Economic Factors

In addition to internal and external factors that the MSC strategic plan has identified, there are also a number of economic constraints that can be considered to have both internal and external components. One such economic influence is the changing use and need for energy resources.

Since a larger percentage of fossil fuels are being utilized by emerging countries, these limited resources will most likely become unavailable in the foreseeable future. Therefore, alternative energy sources must be found and developed for use by the U.S. military and their associated civilian operations (MSC 2010).

Strategy Organization

The primary objective of strategic planning is to understand how a particular business will be implemented, operated in the future, and how the entity will manage expected risks and new developments. There are a number of available strategies that the MSC could undertake, and one of the best alternatives will be discussed in the following paragraphs.

Based on information obtained, the most beneficial strategic organizational structure is that of an entrepreneurial company (Pearce, Robinson, 2004, p 34).

This assessment is based on a number of criteria, including the expected enhancement of the effectiveness and efficiency in MSC operations. The extensive amount of business management knowledge that has been made available to entrepreneurial systems will allow for a more seamless operation of administrative functions.

In addition to operating under an entrepreneurial model, it is also important for MSC to adopt the use of external resources such as outsourcing services that are designed to meet specific criteria and functional uses.

By outsourcing certain routine aspects of their operations, some financial resources may be made available for additional employee benefits, additional research and development, or to provide a more stable financial foundation for future endeavors.

Another possibility is to utilize more of the civilian workforce than is currently. In most cases, military personnel demand a higher wage, and more benefits than their comparable civilian counterpart. By using more of the civilian resources available, MSC could potentially reduce its overall cost of doing business.

Implementation Plan

While developing this implementation plan, one should first identify the major objectives that have to be attained by Military Sealift Command. These objectives are as follows:

Establish more productive partnerships with private suppliers;
Improve HR management in the organization, especially when we are speaking about slow hiring process and high turnover of military personnel.
Increase the speed of internal operations within the agency;
Develop better control mechanisms over the resources.

The achievement of these objectives is crucial for the effective functioning of the MSC. However, in order to reach these goals one has to single out a set of specific tasks. They can be presented in this way:

Make a call for tender in order to attract private contractors. The private contractors of MSC have to be assessed in terms of their reliability, pricing policies, experience in the field, and ability to collaborate with military agencies.
Set more stringent accountability standards for private contractors. One of the key issues, faced by MSC is the inability of this organization to control contractor-operated ships. The thing is that in many cases, MSC has to be twice for the same job (GAO, 1995, p 2). They need to make sure that the prices of contractors are reasonable and that overhaul work is done properly.
Purchase or design an ERP (Enterprise Resource Planning) application that would enable the administration to gain a better control over such areas as human resources, financial reporting, supply chain, etc.
Establish a department that would be occupied solely with the recruitment of the civil personnel. As a rule, Military Sealift Command often has to deal with numerous employment agencies, acting as mediators between the employer and the candidate and a result the process of hiring is usually very slow. Therefore, it is advisable to incorporate this agency into the structure of MSC.
Review and modify remuneration policies of MSC. It has been mentioned before, the turnover rate in MSC is very high. In part, it can be explained by the fact that the employees are not content with the compensation that they receive for their work or they may be dissatisfied with the way their performance is assessed.

It is possible to single out several milestones in this plan:

the beginning of tenders and their ending;
the design and installation of ERP system;
the adoption of new accountability standards.

The efficiency of this plan should be measured according to such parameters as the speed of operations, organizational costs, and turnover rate within the company. The administration of MSC has to establish at least workgroups, which would do the following tasks:

organization of tenders and assessment of the offerings, made by various private entities;
the evaluation of reporting practices within organization and development of new accountability policies;
the design of ERP system;
recruitment of the civil personnel.

Such allocation of human resources seems to be the most appropriate for the needs of MSC. When speaking about the budget estimations, we need to say that it is too early to make them now because at first it is necessary to assess IT needs of the organization.

Only on the basis of this assessment one would be able to determine what kind of software and hardware is needed by MSC. Besides, one would have to determine the costs of tenders and the costs of creating a new HR department in the organization. Without these data, it is rather difficult to carry out break-even analysis.

At this point is rather difficult to set some specific deadline for the implementation of plan. However, we may argue that it will take MSC at least a year and a half to put the plan into execution because tendering process and the development of ERP system are very time-consuming.

Overall, the implementation of this plan depends on several success factors: the availability of funding and the willingness of the employees to collaborate with the administration.

Risk Management

Risk management and contingency planning is defined as the recognition of foreseeable risk, the development of plans to manage those risks, as well as the specific steps that will be taken to minimize the impact from currently unrecognized future risk and problems.

The goals of such planning and implementation is to increase the overall prosperity of the company, assess and effectively manage current and future risks, increase the ability of the company personnel to make effective and timely decisions, and to become proactive in managing new situations.

Conclusions

Based on the current information, and the foreseeable risks and responsibilities in the future, it is believed that the best strategic plan of operation for the MSC is to create a system modeled after entrepreneurial businesses, where coordination is handled by a more centralized administration, and certain routine or other logistical needs of the clients are met through subcontracting qualified private companies.

Through this division of labor, it is believed that MSC will be more able to handle the changing risks and operational needs of its clients.

Reference List

Barney, J. B. (2007). Gaining and sustaining competitive advantage. Upper Saddle River, NJ: Pearson Prentice Hall.

Government Accountability Office. (1995). Weak Control and Management of Contractor-operated Ships. Government Accountability Office. Web.

Military Sealift Command organization. (n.d.) n.a. Web.

Pearce, J., A., & Robinson B. (2004) Strategic management: Formulation, implementation and control. Boston, MA: McGraw-Hill.

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