The U.S., Army Logistics Network has defined specific pricing and costing levels by rank, and strives to push accountability and responsibility as far down the chain of command as possible. As nearly every officer who acts as a buyer within the purchasing and procurement teams has been trained on the fundamentals of accrual-based costing, cost-based accounting, supplier management and supply chain planning, each is given a set of metrics to measure their performance individually and as a team against. As a result, decision making is pushed to the lowest levels of virtual teams with accountability being assigned to the officer responsible for a given supplier. Decision making that involves the entire group is much more collaborative in nature, relying on Internet-based technologies for sharing documents, presentations, and other materials to assist in the development of alternatives. The U.S. Army Logistics Network is heavily reliant on collaborative forms of technology based on the Internet in their decision making approach across divisions. This aspect of their operation is discussed later in this analysis, yet the technology is mentioned here to highlight its supporting role to the process of strategic decision making. What is critically important is that the actual decision making process be strategically managed when a new supplier is being considered, or in the event of a major event, for example the invasion of Iraq, where there had to be exceptionally high levels of coordination across all divisions of the logistics network.
Analyzing the Obstacles and Success Factors of Virtual Teams
The U.S. Army's Logistics Network believes that knowledge transfer is by far the greatest obstacle they face in making virtual teams as effective as they can be. The fact that the number of products and services they source over time varies significantly while at the same time there is the need to procure supplies for new programs including the rebuilding of Iraq illustrates why knowledge transfer is such an obstacle for them today. One of specific example of this is in the sourcing of ceramic armor that is being used to protect American soldiers and also outfit Iraqi forces (Ceradyne, 2006). Ceramics require an entirely different series of processes of procurement, quality management and eventual integration into the U.S. Army supply chain. This specific example illustrates how knowledge transfer not only about the procuring of ceramics across a virtual team is critically important, but also the quality management, quality audit, Department of Defense (DoD) requirements interpretation of specifications and first article ordering are. In short, there are entirely new subsystems of processes built for each new technology of armament produced for the U.S. Army. Combining these factors is the need for coordinating demand forecasts for the U.S. Army personnel in Iraq, the security forces hired by the U.S., and the forecasts from the Iraqi Army and Police. As the decision was made to standardize on ceramic armor based on it saving 19 lives during the height of the Iraqi war and given its proven resiliency in protecting troops from roadside bombs, the U.S. Army chose to standardize on this technology. Considering the literally thousands decisions that include purchasing new armor, it is clear why knowledge transfer is such a big obstacle for the U.S. Army to overcome. That is why the culture of the procurement and purchasing teams are entirely focused on training and the valuing of knowledge above even metrics of activity and performance over time. The greatest obstacle is gaining enough knowledge in time to make the best possible decisions in the shortest amount of time. It is literally a race of virtual teams against the clock to gain as much insight as they can and move forward with their decisions.
Correlated to this obstacle is the one of communicating the knowledge gained quickly throughout the virtual team (Jong, Schalk, Curseu, 2008). Both public and private sector-based virtual teams are continually facing the obstacle of knowledge transfer. This problem area however has led to significant opportunity for technology innovation with will be discussed in the next section of this paper titled Communication Practices in Virtual Teams.
The lack of communication within teams is the second major obstacle, and is often illustrated by mis-communicated requirements to suppliers, lack of clarity about pricing, and pricing errors. In the case of strategic sourcing programs where there are several officers involved in a major project, the lack of knowledge capture can also lead to a breakdown in communication over time. The over-reliance on technology has been seen as a catalyst for a lack of communication in many virtual teams as the reliance on knowledge management systems first and processes second takes precedence (Stevens, Karkkainen, Lampela, 2009). This also happens in the purchasing and procurement within the U.S. Army Logistics Network once databases have been created, knowledge management systems programmed and developed, and taxonomies defined of how the data will be stored. All that is left to do is change the behaviors of the officers who must input data about their suppliers they manage, including pricing and product data. This sounds quite simple, yet is by far the most difficult aspect of making a change in communication happen. Many officers resist putting the data they have in their heads into a knowledge management system their peers, superiors and even members of the Department of Defense can query and use whenever they want. This is a classical case of resistance to change that often occurs when new systems are put into place to make process more efficient and move virtual teams from being isolated to being part of a community (Slater, 2006).
The lack of communication that leads to resistance to change is often based on a lack of trust about not only how the knowledge being shared is going to be used, but also about ones' role once they share their most valuable information. This dynamic of a lack of communication being predicated on a lack of trust has been seen in empirical studies of resistance to change (Garg, Singh, 2006) and is the third major obstacle the U.S. Army Logistics Network faces. The lack of trust as to what their roles are, how the sharing of intelligence and insights gained, and how the data they share in technology-based applications on the U.S. Army Intranet site all weigh into their decisions as officers to contribute to the greater growth of knowledge. Understanding that the insights and intelligence they have of suppliers and their performance in managing them has a direct impact on their promotion potential illustrates why they are hesitant to share any information whatsoever. This third obstacle of a lack of trust is exemplified by a resistance to change is the most debilitating in terms of slowing down the progress of any organization to its goals (Garg, Singh, 2006). For the U.S. Army Logistics network this is exacerbated by the fact they must move very quickly in order to attain their objectives. Take for example the sourcing of Ceradyne armor. The sharing of insights gain from supplier qualification has direct benefits for not only the Logistics Command but also for the Iraqi armed forces and police forces. Sharing this information is vitally important for the entire supply chain to function. Overcoming resistance to change by concentrating on creating trust is crucial for the most important processes of the purchasing and procurement teams, located across the globe, to function correctly and the U.S. Army Logistics Network to serve its part of the broader support system for the Department of Defense and foreign governments.
In contrast to these obstacles, the success factors of U.S. Army Logistics Network purchasing and procurement teams capitalize first on their experiences as Army officers and the heavy reliance on procedures and processes to get their work completed. As the Department of Defense requires processes to be documented, tested and verified regularly for every aspect of purchasing and procurement, the documentation of workflows is fairly complete. There is in fact a series of workflows and processes defined that purchasing and procurement officers can rely on to guide them through supplier relationship management issues. There are also tiered pricing strategies for commoditized products and services, which serve to drive up the transaction velocities over time, all of which are defined and negotiated through the Department of Defense on products and services sourced in conjunction with their needs. The net effect of all these defined processes and procedures and pricing tables is framework into which the purchasing and procurement teams can readily work. This success factor is responsible for the rapid on-boarding of new officers into the purchasing and procurement virtual teams as well. There are new officer orientations run every ninety days where new members of the virtual team are provided a thorough training on all of these processes, procedures and frameworks. The…