Research on the Efficacy of Applying a Supply Chain Paradigm and Economic Valuation Tools to Optimize Management Decision-Making and Enable Quantification of DoD Stewardship Value
Stephen Petron | CH2M HILL, Inc.
The U.S. Department of Defense’s (DoD’s) management efforts at test and training lands ensures readiness, with co-benefits in the form of stewardship value, ecosystem services, and the maintenance of options for future re-use. The management of these lands is complex, with a need to balance test and training, environmental compliance, impacts and costs associated with modernization and maintenance of deteriorating natural capital needed for the mission, encroachment, impacts on the public, property use agreements, new listings of threatened and endangered species, and increasing shared use of test and training lands. Assessments to date have not fully captured the value of the DoD’s environmental stewardship, and there are gaps related to the ability to fully incorporate natural capital considerations to optimize decision-making, including a systematic way of identifying risks and opportunities inclusive of system dynamics.
The objective of this research is to evaluate the efficacy of using a business supply chain paradigm and economic valuation methods to improve valuation and management of DoD test and training infrastructure. The research is intended to identify any potential misalignment, inefficiencies and fatal flaws, to refine the approaches, and, as appropriate, to delimit the next phases of work.
After a pilot installation is identified to facilitate the research, a supply chain assessment tool will be configured to assess natural capital as a supplier category. The tool will test whether the supply chain paradigm can provide a consistent framework for standardizing the process of identifying and accounting for risks, threats, conflicts, opportunities, system dynamics, boundaries, and scale associated with natural capital managed by DoD. A workshop will be held to obtain input and feedback on the preliminary draft application of the supply chain paradigm, including the valuation questions most important to the military. The outputs of this process will facilitate research on the ability of contingent valuation methods to fully define DoD’s stewardship value and the marginal benefit of the various natural resource assets protected by DoD for integration into decision-making. Using a real decision point, the output will also be used to test whether Net Environmental Benefit Analysis can effectively provide decision makers the necessary information to assess environmental tradeoffs, balancing training requirements, land stewardship, costs and legal drivers. The outputs of the economic valuation work are then intended to feed back into supply chain management for decision makers to consider.
Changing the perspective on natural capital, namely considering it a key component in the supply chain necessary to produce the product – readiness – offers significant potential benefits to DoD. The project will provide an assessment of the integrated ability of the supply chain paradigm, contingent valuation methods, and Net Environmental Benefit Analysis to identify the most important decision points, fully define DoD’s stewardship value, and effectively provide decision makers information on environmental tradeoffs.