The Defense Commissary Agency

“We want our customers to know that we appreciate their patronage, and we invite them to join us in celebrating 20 years of the savings that exist as part of their commissary benefit,” Director and CEO Joseph H. Jeu states.

DeCA operates 247 commissaries in the United States, the United Kingdom, Japan, South Korea, Germany, Belgium, Spain, Italy, Turkey, Egypt, Portugal, the Netherlands and two U.S. territories – Guam and Puerto Rico. Alaska and overseas stores receive goods from DeCA’s 10 central distributing centers in Europe, the Pacific and Alaska, as well as a central meat processing plant in Germany. The Fort Lee, Va.-based organization employs more than 17,000 people and generated nearly $6 billion in sales this year.

The commissary benefit is an integral element of the military pay and benefit package, according to Jeu. In addition to enjoying the efficiency, effectiveness and customer satisfaction unmatched by commercial supermarkets, commissary patrons enjoy an average savings of 32 percent, which translates to nearly $4,500 a year for a family of four. “As patrons in these trying economic times, military families continue to rate the commissary as one of their most valued benefits,” he says.

Organizational Restructuring

DeCA recently implemented its most significant restructuring effort since the agency was created in 1991. These latest reforms were in response to new Department of Defense (DoD) initiatives designed to reduce duplication, overhead and excess, as well as to instill a culture of savings and cost accountability. “Throughout our own reduction process, we dissected our above-store-level organization – our people and our functions – and plotted our business course toward better support to our stores and better serving our customers in the future,” Jeu says.

DeCA identified and eliminated redundancies at its headquarters, established four major business groups and transitioned from regional offices to five smaller geographic areas that balanced and realigned oversight of its stores. “Through our restructured process improvements, organizational performance results, increased store-level support efforts and enhanced customer service strategies, we will deploy programs that better serve our authorized patrons,” Jeu says.

Other new or upcoming initiatives to improve the customer experience include: 

• A promotional sign program, deployed in stores in early June, was designed to better communicate DeCA’s message of offering value and savings to its patrons. 
• In the third quarter of 2011, DeCA unveiled its own gift card, similar to those found in commercial retail outlets. The card is available in stores and on the Internet, and is popular among organizations that give the gift of groceries to military families in need.
• The DeCA Loyalty Card program, scheduled for deployment in 2012, will enable customers to access digital coupons and use the card at any commissary location.
• DeCA intends to increase its Web presence by utilizing its website, www.commissaries.com, to extend the commissary benefit beyond its brick-and-mortar stores. It also is expanding the use of social media to reach out to a new generation of shoppers who have embraced nontraditional communication venues.
• DeCA is improving efficiencies and modernizing its supply chain and financial management processes through its Enterprise Business Solution program, and deploying an automated pricing system to eliminate the manual application of price labels, thus reducing man-hours and increasing accuracy.
• After studying best practices in the retail industry and identifying opportunities to improve labor efficiency, DeCA rolled out its System Life Cycle Support Service Program in four test stores to evaluate the impacts of location-specific attributes such as layout characteristics, equipment and technology, and to develop new procedures to achieve greater consistency.

Full Improvement

“While we are pursuing various initiatives and programs to expand patron use of the commissary benefit and enhance customer satisfaction, we are also focused on improving the processes that will best support their implementation,” Jeu explains. 

“We continue to implement a culture of continuous process improvements through an active Lean Six Sigma program, which supports efficiencies across the enterprise and ensures effective use of our resources,” he adds.

DeCA utilizes a patron-surcharge program to continuously recapitalize its facility inventory with a mixture of new stores and systematic renovations of existing stores. In a typical year, it builds two or three new stores to replace those that have reached the end of their useful life and renovates up to 10 existing stores.

DeCA continues to abide by its environmental management system, established in 2005, to reduce energy and water usage, and greenhouse gas emissions. The organization has received numerous accolades for its progressive green initiatives, most recently the 2011 Silver-Level Federal Electronics Challenge Award during a Sept. 19 ceremony at the Environmental Protection Agency in Washington, D.C.

The organization continues to work closely with its industry partners – manufacturers, vendors, suppliers and brokers – to keep prices low for its customers. “Our industry partners have the knowledge about how our organization works, and with that, they are in a good position to help us improve how we do business,” Jeu explains. “I believe that if we continue to innovate and grow in our strategic thinking, we will continue to meet the needs of our customers.”