Is PPSO Regionalization Good for the Invoicing Process?
September 8, 2011 
1 Comment
Map showing future JPPSO domestic locations of Fort Lewis, Wash.; Colorado Springs, Colo.; Chelmsford, Mass.; Fort Belvoir, Va.; San Antonio; Jacksonville, Fla.; and San Diego. International JPPSOs will be located at Pearl Harbor; Yokosuka, Japan; Yongsan, Korea; and Grafenwoehr, Germany.
USTRANSCOM recently formally announced their plans to consolidate all PPSO offices into 11 regional JPPSOs. There will be a lot of speculation about the effects of regionalization, and we would like to speculate about its effect on the invoicing process. Fortunately, we currently have a number of JPPSOs already in place, so our opinions are based in large part on our past experience with those existing JPPSOs.
Positives
The biggest challenge we face in invoicing is probably dealing with all the different rules, interpretations, and processes at all the different PPSOs locations. We now have to know and deal with over 100 different bases, and despite standardization attempts, they do things very differently from one base to another. So, just by reducing that number from over 100 down to 11, it will make the invoicing process more efficient. Once it is at 11, we are hopeful that standardization will have more of a chance of success. It is a lot easier to get 11 entities to agree on something than it is to get over 100 to agree.
Another positive is that regionalization should allow the JPPSOs to modernize and become more efficient. With the existing JPPSOs, we have been able to work with them to make the invoicing process more automated, increasing efficiency on both sides. For example, we auto-send images of biling documents to a couple of the JPPSOs, so that they do not have to ask us to provide them when they are reviewing our invoice. This is contrasted with a few smaller PPSOs that still rely primarily on fax communications.
Negatives
While reducing the number of locations makes it easier to standardize, it also allows any one location to become a huge road block if they have problems. There have been occasions where certain JPPSOs have struggled to keep up with the workload due to staffing issues or technical problems. Because of the volume of invoices they are processing, the dollars being held up quickly adds up to cause significant cash flow issues. So, regionalizaiton will create fewer points of failure in the invoicing process, but when they fail, they will be much larger and more serious failure.
Another concern with regionalization involves the transition process at bases being regionalized. We have seen numerous issues when bases move under the control of JPPSOs. There is often confusion among the various parties about the timing of transition of responsibilities, as well as technical issues such as GBLs printing with the wrong GBLOC on them. Over the next few years, we will be seeing a lot of these transitions occurring, which is likely to lead to many problems, albeit on a temporary basis.
Postive or Negative
There is one other possible effect of regionalization that could be viewed as either positive or negative, and that is the increased independence of JPPSOs. We have seen that existing JPPSOs are a lot more likely to make their own interpretations of the tariff without relying on SDDC. Smaller bases tend to ask SDDC for guidance when an issue comes up, but due to their increased staffing and expertise, JPPSOs tend to feel that they do not need to take that step. Of course, this can be either or positive or negative depending on the JPPSO and the issue being interpreted. It will be interesting to see the interaction of these larger, more powerful JPPSOs and SDDC as the regionalization process moves forward.
Conclusion
Overall, we believe the regionalization process will be a positive for invoicing in the long run. The ability to reduce the number of entities handling invoices from over 100 to 11 is enough of a benefit to outweigh any other concerns. However, there are potential problems with the plan, and certainly the transition will be interesting to watch.
Do you think the regionalizing PPSOs is a positive or negative step? Please use the comments below to share your opinions.
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Very thoughtful and in my opinion correct and justified.
The elephant in the room though is the draconian effect on a TSP being put in suspension, or disqualification and having this affect all of the disproportianally large area represented by the JPPSO JPPSO. Most of the time the problem is generally localized in a relativey small area of operation, and the wide effect of being placed in any kind of non use hurst the TSP disproportionally to the offense alleged, and taking capacity away from the TMO that should stay active in any area not directly affected by the alleged problem.