Managing Risk and Performance: A Guide for Government Decision Makers

Chapter 8

Integrating Enterprise Risk Management with Strategic Planning and Resource Management

Jeffrey Stagnitti

Chief Risk Officer, Defense Logistics Agency

Enterprise Risk Management (ERM) is a management decision-support discipline that provides a structured way to identify, evaluate, and take action on risks that impact mission effectiveness. It is explicitly strategic and cross-functional in focus. The Defense Logistics Agency (DLA) uses ERM information as a major input to agency strategic planning activities, and as a lens through which it considers and evaluates its strategic, cross-functional resource planning and execution options.

Context

DLA—America's logistics combat support agency—provides a full range of supply chain management and logistics services to the U.S. military, other federal entities, and friendly foreign governments. It is a large and worldwide organization, which executes multiple lines of complex business across eight supply chains at a scope comparable to—and in many cases in excess of—the world's largest commercial companies. The agency manages over 5 million items, and processes well over 100,000 orders a day. DLA is a multibillion-dollar enterprise, and as such, effective strategic planning and resource management processes are keys to success. Additionally, as a support provider to the American military, ultimately funded by American taxpayers, DLA has a diverse community of stakeholders unparalleled in the private sector.

Since its establishment ...