Article Review: Integrating Financial Management Operations in a Logistics Support Environment

The United States military is the largest organization in the world. As a result, the logistics associated with the operation are also the world’s largest and most complex. In order to remain efficient, financial management components must be integrated into the logistic schematics. The following article will discuss the defense logistics of the U.S. military with a focus on financial management strategies that have been recently embraced.

Operation Iraqi Freedom was the first large scale military operation that included a significant financial management component. The article “Integrating Financial Management Operations in a Logistics Support Environment,” by Lieutenant Colonel Holscher (2008) discusses how, under the Department of Defense, an entire military brigade was transformed into a financial consultation group. The first step was to organize the brigade and educate them on the task at hand. The brigade was organized into a hierarchy that closely resembled a corporation versus a paramilitary operation. The reorganization of the hierarchy was essential in delineating responsibility and helping encourage critical thinking and sharing creative solutions regardless of position in the military structure. A summit was held with key people, including the brigade, to discuss the overall mission of the operation in providing efficiency to the logistics with a focus on protecting taxpayer dollars.

The financial brigade was able to implement efficient cash handling strategies such as reducing cash on hand. Cash was eliminated and replaced with electronic handling techniques such as debit cards. Secondly, government contracts would be paid in Iraqi currency as opposed to cash. Therefore, the Iraqi banking system would have to handle the cash and deposits as a result of contractual payments to vendors. Lastly, contracts were exclusively paid in electronic transfers to eliminate providing checks to vendors.

Reference

Holscher. (2008). Integrating financial management operations in a logistics support environment. Army Logistician.