Business leaders in America have long known that being able to adapt to changing environments is the sine qua non of success. The evolution in customer needs and habits, in trade regulations, in national and international supply and demand, have required moving from long-term planning to just-in-time strategizing. New realities are now making strategy itself appear obsolete, turning businesses into adaptive systems that remain alert to shifting paradigms and play out different scenarios in a sense-and-respond mode.

The U.S. military, whose attentive scrutiny of the commercial world allows it to apply the best of the lessons learned by business leaders, have been quick to realize the immense advantages that a sense-and-respond model offers to our warfighters. Indeed, the nature of warfare has fundamentally changed in recent years. Countries are now confronted by an increasing number of swift and opportunistic adversaries that can range from hostile states to transnational terrorist organizations. These adversaries use unconventional, surprise attacks to inflict large-scale casualties on soft targets and wreak maximum havoc on geopolitics and world stability. To thwart such attacks, the military must be prepared to engage and take out enemies — from a handful of fighters in hidden terrorist cells to rogue states — anytime, anywhere, under any conditions, rapidly and decisively. Beyond warfighting, military organization also faced an increasing variety of critical time sensitive ad hoc missions with regard to humanitarian assistance, disaster relief, and peacekeeping. As a result, even more than in traditional warfare the military face irregular, disruptive and catastrophic challenges all at the same time.

This evolution requires that fighting forces transform their operational design and turn to recent advances in technology. More flexible management systems will adapt to changing environmental or unexpected operational factors. To support troops on the ground, military units used to rely on a mass system or, more recently, on just-in-time logistics. In today's asymmetric military field, however, both systems fall short. The mass system may still be useful for a predictable, long-term military engagement, but a stockpiling approach will not allow the military to respond to sudden, urgent threats. Also, maintaining a ready force to fend off a potential attack that could happen any time, anywhere is not the best use of resources, and while just-in-time logistics provides a streamlined alternative, the rigidity and vulnerability of the supply chain leave the troops exposed [8].

In this article, we explore the opportunities for the military to shift from command-and-control operations to the Sense-and-Respond Network-Centric Operations. We also discuss some new approaches and advances in technology that allow the military to achieve the sweeping changes needed to meet the immense present-day challenges.

The Emergence of New Approaches


The changes in the military mission environment and the advances of technology are prompting many countries to explore new responses. Both fighting forces and supporting logistics systems are being transformed to better address changing circumstances or unexpected operational factors. The U.S. government, for example, recently initiated three major force transformations: Network-Centric Warfare, Sense-and-Respond Logistics, and Transforming Military Culture (See Figure 1) [8]. Other countries may focus on different aspects of the needed changes. All transformation efforts, however, are closely related to these three areas.

Network-Centric Operations. Network-Centric Operations focuses on the use of information technology to achieve battleground superiority. It is known around the world by different names: Network-Centric Warfare, Network-Centric Defense and Network-Enabled capabilities, to name a few. The basic premise is that compiling disparate information provided by organic sensors into a networked, integrated, near-real-time view of the battlefield gives knowledge superiority to frontline units. This information superiority allows better decisions to be taken — for example, a more focused and lethal force can be deployed in critical areas and war fighters can synchronize actions to maximize effects.

Sense-and-Respond Logistics. Successful warfare depends on effective logistics support. Sense-and-Respond Logistics detects, predicts and coordinates actions that provide competitive advantage, spanning the full range of military operations across the strategic, operational and tactical levels of war. It promotes doctrinal and organizational transformation and supports scalable coherence of command and control, operations, logistics, intelligence, surveillance and reconnaissance.

Sense-and-Respond Logistics enables joint effects-based operations and provides efficient, agile support with shortened decision cycles and rapid-response capabilities. It is critical to Network-Centric Operations and will increasingly play a key role in the military's operational effectiveness.

Transforming Military Culture. The success of Network-Centric Operations and Sense-and-Respond Logistics depends not only on advanced information technology but also on a fundamental shift in the military from the command-and-control organizational model to the sense-and-respond model [3]. It also requires a cultural change in the use of innovations, technology and information sharing. Sense-and-respond military cultural transformation is driven by: 1) embracing the new reality of warfare and military missions and being ready for the necessary changes, 2) adopting the sense-and-respond organizational change model, and 3) overcoming mistrust and resistance to change or advanced technology. An integrated transformation of the Network-Centric Operation, Sense-and-Respond Logistics and Transforming Military Culture will be the foundation for the new military, with sense and respond the common element that binds together various much-needed capabilities.

Use the Sense-and-Respond Value Net to Transform the Military


In this section, we discuss how the military sense-and-respond transformation can leverage work that companies such as IBM have pioneered in the commercial world. Ongoing work conducted at IBM since the late 1990s focuses on the Sense-and-Respond Value Net — a new paradigm that integrates managerial model, real-time decision support, risk and resource management, supply chain optimization and business processes automation [4]. A sense-and-respond enterprise monitors and analyzes real-time business performance and market conditions, aligns operations with strategy and customer requirements, proactively detects events, engages value net partners in collaborative decision-making, and constantly adapts to changing business environments (see Figure 2).

Figure 2: The sense-and-respond operational model.

Sense and respond in the commercial sector. IBM has built the sense-and-respond framework and conducted several pilots in the areas of supply chain management, transportation management and customer relationship management. As an example, at the IBM PC Division, a major challenge was to improve both the on-time delivery of the PCD products to customer orders and the ability to predict and respond to supply and demand imbalances. To address these issues, a Web-based sense-and-respond system was built to identify forecast/order events and available supply headlights across the supply chain.

The system monitors supply-and-demand imbalances for commodities and detects out-of-threshold situations. A key innovation in this pilot is a new algorithm that identifies potential gaps by using historical information and future indicators to forecast ordering trends. The new algorithm has been coupled with improved data integration and a Web-based management dashboard that provides a current view of key supply-and-demand measurements.

This sense-and-respond supply-and-demand conditioning initiative has brought an estimated 10 percent to 15 percent increase in profitability through improved serviceability and customer retention. Another result has been reduced inventory write-downs in a market where assets depreciate 0.5 percent per week.

Sense and respond for the military. The Sense-and-Respond Value-Net model is well-suited for supporting the Network-Centric Operations and Sense-and-Respond Logistics. Based on real-time intelligent information and distributed decisions support, it enables military units to adapt to situational changes and quickly respond to threats. In a military sense-and-respond operation, units are connected by the capabilities and the values that they provide to each other. The resources are distributed in strategic positions based on a pre-engagement analysis.

During operations, the field commanders collaborate and adjust their execution plans based on analysis of available intelligence, on field conditions, on alternative approaches, and on the actions of allies and enemies. This allows the military to support the common operation objectives even in changing conditions. Multiple units can synchronize their efforts at the last minute to deliver an effective response to unexpected or unknown threats.

Applying sense and respond to the military environment however, requires an approach far more flexible and secure than in the business community. Given the nature of military operations and the urgency for the current war on terror, the development and adoption of the sense-and-respond models and technology have to be accelerated. Advances particularly need to take place in the following areas:

Adopting sense-and-respond managerial and technology transformation, based on the military culture. The bedrock of the sense-and-respond model focuses on collaborative decision-making through negotiation and commitment, measurement for accountability, use of IT for business intelligence and adaptiveness. While the benefits of these changes can be demonstrated, the rigorous command-and-control structure, mistrust of technology, challenges around information sharing (technical and culture) and stiff procedures rooted in the military culture can become obstacles. A practical approach is to focus on selected areas, manage expectations, publicize early adopters and their success stories, and incrementally expand the scope. Instead of sweeping changes, the early implementation should focus on supplementing the current management processes with decentralized decision-making support, emphasis on outcome, and management of situational roles with negotiation, commitments and accountability. Leadership support from the top commanders is also critical.

Support for integration, collaboration and security. Technology will need to focus on supporting rapid integration, on interoperability, and on collaboration using standard-based middleware, with great emphasis on secure systems and network at all levels. These requirements, important for commercial applications, are much more so for military operations. Recent advances in the middleware support for adaptive technology and rapid integration are promising but additional developments are needed to satisfy military specific requirements.

Information intelligence, analysis of trustability of data and aggregated impacts. With lives at risk, capabilities for timely event discovery, conflicting data resolution, intelligence gathering and sharing to recognize connections, and patterns and events in the massive amount of data across military units become much more critical. The shorter decision cycle and the high stakes of military operations impose much stronger requirements on the intelligence and performance of information processing. For example, the current dashboard and business intelligence technology can provide awareness among units on the sensors data, events and overall status. To support better decisions, however, a systematic approach for assessing the trustability of data, observing data patterns, and understanding its aggregated impact needs to be implemented.

Modeling uncertainty and managing performance. Situation awareness and performance management require sound modeling of the strategy, operations and IT — including intents, policies, regulations, field conditions and uncertainty, and IT robustness. It is particularly challenging, but essential in a collaborative decision model, to model and resolve conflicts in order to make optimal decisions and balance long- and short-term goals. Various technologies are emerging. For example, in addition to the technology used in modern supply chain management such as risk management, stochastic optimization, simulation and artificial intelligence, the IBM model-based approach decomposes business and IT into four layers: strategy, operation, execution and implementation. Links and traceability between the layers make it possible to follow the connections from strategy intents and operational models down to the (automated) IT support.

In military operations, however, complex situations, an environment in constant flux and the grave consequences of mistakes call for new techniques of aggregation and desegregation of uncertainty at various decision layers. There is also a need for additional focus on identifying flexibility in operation models to enhance performance.

Support for agent systems and distributed decision support. An agent-based decision support system with careful design of agents' value structure offers promising capabilities in supporting interaction among military units, local troops and allies to handle mass information such as sensor data and defense intelligence, and to provide timely and robust decision-making capabilities. Such a system can also potentially support many of the challenges discussed in this paper. At IBM, we adopted an evolutionary model of applying distributed decision-making within an otherwise hierarchical structure and processes. The resulting system will extend the state-of-the-art by modeling and handling uncertainty in a sense-and-respond environment for both hierarchical and decentralized decision support. It will help the military progressively move from a rigid command-and-control structure to a highly networked architecture.

Transforming the Military Step-by-Step


For the military, the complex challenge of moving to a sense-and-respond mode requires an incremental approach where the transformation related to people, processes and technology are kept in synch. We recommend a step-by-step approach based on a maturity model decomposed into visibility, control and adaptiveness. For each of these categories, we further subdivide the capabilities into real-time, collaboration and intelligence (see Figure 3).

Figure 3: The sense-and-respond maturity model for implementation. (Click here to view a larger version in a separate window)

A careful implementation of the sense-and-respond transformation, from increasing visibility to changing the control model and finally enhancing adaptiveness, will give the military flexibility for real-time adjustment to its operational models. Next, by expanding into the collaborative data gathering, distributed decision support and dynamic teaming and rapid integration, the military will become fluid in value net operations. Additional improvements in intelligent information, more intelligent control and learning, and adaptability to changes will complete the transformation to sense and respond.

Summary


With the changed nature of warfare and military operations and the challenging new environment, the military is well aware that it needs to shift from its traditional command-and-control structure into a sense-and-respond mode. This will allow a heightened and more effective response to the current threats and help enable the military to win the war on terror.

No large-scale transformation can be simple. For the military, adopting a sense-and-respond model and logistics is a particularly complex challenge, affecting not only technology but processes and people. Strategy, roadmap and finally execution all require careful planning to take the enterprise through progression with several levels of maturity and automation.

Significant sense-and-respond efforts have taken place in the commercial sector where advances in technology and appropriate changes with people and process make progress every day. The unique military environment and the nature of military operations, however, create requirements that need to be both more rigorous and more flexible. A paradigm shift into a synchronous managerial model focuses on IT and intelligent decision-making, along with a profound culture change. Successful transformation will help create an agile, flexible and effective military enterprise, responsive to the demands of 21st-century warfare.

Acknowledgments The authors would like to thank the IBM's cross-functional and cross-organizational sense-and-respond community for its collective efforts in moving business management to sense and respond. In particular, we would like thank Sugato Bagchi, John Bunyan, Steve Buckley, Karen Butner, Alberto Castano-pardo, Markus Ettl, Tig Gilliam, Ying Huang, John McCaan, Julia McManus, Murray Mitchell, Saïdeh Pakravan, Bill Phillips, Lawrence Phillips, Scott Simmering and Richard Stewart for their contributions to this work. Grace Lin (gracelin@us.ibm.com) is an Associate Partner and Global Sense and Respond SWAT Team Leader in IBM's Business Consulting Services. She is also an elected member of the IBM Academy of Technology. Before joining IBM Consulting, Dr. Lin was the Senior Manager of Supply Chain Management and e-Business Optimization at the IBM T. J. Watson Research Center. Robert E. Luby, Jr. (robert.e.luby@us.ibm.com) is a Partner and Global Leader for Public Sector Supply Chain Management in IBM Business Consulting Services. He is also a partner on the IBM BCS Defense Industry Team. Ko-Yang Wang (kyw@us.ibm.com) is an IBM Distinguished Engineer and Research and Innovation Executive in IBM Global Services. He is also the leader of IBM Enterprise of the Future effort.

References

1. Alberts, D.S., Garstka, J.J., and Stein, F.P., "Network Centric Warfare," CCRP, May 1999.
2. Buckley, S., M. Ettl, G.Y. Lin, and K.Y., Wang, "Intelligent Business Performance Management — Sense and Respond Value Net Optimization," to appear in "Supply Chain Management," Fromm, H., and C. An, (ed.), Springer, 2004.
3. Haeckel, S. H, and A.J. Slywotsky, "The Adaptive Enterprise: Creating and Leading Sense and Respond Organizations," Harvard Business School Press. 1999.
4. Lin, G.Y., S. Buckley, H. Cao, N. Caswell, M. Ettl, K. Katircioglu, A. Nigam, and B. Ramachandran, "The New Frontier: Sense and Respond System for Value Chain Optimization," OR/MS Today, April 2002.
5. Lin, G. Y., J.J. Jeng, and K.Y. Wang, "Enabling Value Net Collaboration," in Evaluation of Supply Chain Management," Chang, Y.S., H.C. Makatsoris and H.S. Richards (ed.), Kluwer Academic Publishers, 417-430, 2004.
6. Menotti, M. J., "The Sense-and-Respond Enterprise," OR/MS Today, August 2004.
7. "Operational Sense-and-Respond Logistics: Co-evolution of an Adaptive Enterprise Capability," Office of Force Transformation, May 6, 2004.
8. Office of Force Transformation, www.oft.osd.mil/initiatives/srl/srl.cfm.
9. Suleski, J. and C. Quirk, "Supply Chain Event Management: The Antidote for Next Year's Supply Chain Pain," AMR Research (2001).

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