Inflation, Supply Chain Disruptions Yield Lower Supplier Survey Ratings

Apr 28, 2023 | Partner News

Inflation and supply chain disruptions in a post-COVID-19 environment are frustrating suppliers who do business with the Defense Logistics Agency, according to the recent DLA Supplier Survey.

DLA’s average rating with suppliers dropped to 3.34 from 3.47 two years ago, with the biggest decreases in the timeliness and timely resolutions categories, said Tim Stark, chief of DLA Industry Engagement and Analysis.

“It’s a challenging environment,” Stark said.

The third biennial survey asked questions about 19 factors covering four areas: the effectiveness of DLA’s communications, growth and profit potential, the strength of the DLA-supplier relationship, and the effectiveness of DLA processes. Answers had a value of one to five points, ranging from “strongly agree” for five points to “strongly disagree” for one point.

The agency received 2,507 responses for a 38% response rate from a similar cross section of business types and sizes, contracts and sales amounts as surveys in 2018 and 2020. The total number of responses is down slightly because the number of the agency’s vendors has decreased, Stark said.

DLA’s highest factor was trustworthiness, with an average rating of 3.89. The agency had an average 3.68 score for suppliers who considered DLA a valued partner.

In terms of obstacles, 99% of respondents said they experienced impacts from inflation, and 68% said those impacts were severe or significant.

Also, 88% of respondents said they were experiencing supply chain disruptions, with 35% categorizing those disruptions as significant and 7% categorizing them as severe.

“That helps set the environment they’re going through. It’s a tough time,” Stark said. “We can’t control inflation. We have limited capabilities to respond to those pressures.”

Businesses that conducted over $10 million in business with DLA were more positive in their responses. Stark said that may be because they’ve “broken the code” of working with the agency better than smaller companies.

Small businesses made up 78% of the responses and were more critical of the agency, although non-profit companies and service providers were more positive, Stark said.

A total of 83% of the responding companies have done business with DLA for five years or more.

“If you’re not happy, you’re going to be louder than if you’re happy,” said Sandra Gilbert, a program analyst with DLA Industry Engagement and Analysis.

The results will be broken down further by supply chain and shared with DLA’s major subordinate commands. Action plans will be developed to address areas that need improvement.

The results were also presented at an industry association meeting April 25.

The anonymous survey launched in October 2022 and was sent to 6,429 suppliers that conducted $50,000 or more over two years. Other suppliers could take the survey by clicking on a link on DLA’s website. The survey closed Feb. 10.

The survey is part of DLA’s Industry Engagement Plan and supports the strong partnerships focus in the agency’s Strategic Plan

By Nancy Benecki, DLA Public Affairs

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