June 1996 € Volume 23 € Number 3

South African National Defense Force Wins Edelman

Peacetime restructuring of the SANDF leads to significant savings for the newly reconstituted South Africa

The South African National Defense Force (SANDF), which had been the target of political flak as well as enemy fire during a long period of internal upheaval, faced an even more perplexing problem once peace came to the troubled country: In the absence of a major external threat and with a limited budget, what should be the size and shape of a united military force?

For answers, a team of scientists, drawn from the SANDF and the consulting firm of Deloitte & Touche, turned to operations research and management science tools and techniques. The team's clever work not only solved the problem with substantial savings, but also won accolades from South African President Nelson Mandela and INFORMS.

The College on the Practice of Management Science (CPMS), the Practice Section of INFORMS, awarded SANDF the 1996 Franz Edelman Award for Achievement in the Management Sciences and Operations Research at the recent INFORMS national meeting in Washington, D.C. The Edelman competition, the "Olympics of OR/MS," includes a day-long series of presentations and is considered one of INFORMS' most prestigious awards. This year marked the 25th anniversary of the competition.

"The problems these scientists faced were enormous," said Howard Finkelberg, chairman of the Franz Edelman Award Committee, in presenting the award to SANDF representatives in Washington. "Not only did they have to create a united military from former enemies, they had to establish a mission suitable to today's South Africa."

In a letter to INFORMS, Mandela praised the SANDF team for its "initiative and valuable contribution."

"Let me assure you that the historic changes in our country would not have been possible without the loyalty and professionalism of our men and women in the armed forces," Mandela wrote.

"We are committed to maintain and strengthen this vital national asset, the severe resource limitations notwithstanding. To this end, the National Defense Force, on its own initiative, has demonstrated its commitment to the nation by a highly professional application of modern management science and operations research techniques. As such, it is even better placed to provide adequate, appropriate and affordable defense for our new democratic Republic, now and beyond the year 2000."

The SANDF team created the following models to solve the problem: 1) risk model of impact of defense contingencies; 2) growth model of growth potential of force structural elements; 3) cost model (zero-based budgeting); 4) mixed integer program modeling of all relationships; and 5) a manual model allowing users to turn tasks on and off and select different strategies. The project resulted in force design savings of more than 22 percent, with clear opportunities for major additional savings.

Maj. Gen. Marius Oelschig led a smartly dressed contingent of SANDF personnel to Washington to compete for the Edelman Award and later to the podium to accept first-place honors. The winning team included Sally Botha, Ivan Gryffenberg, Rauten Hofmeyr, Jean Lausberg, Rupert Nicolay, Willem Smit, Stefanus Uys, Willie van der Merwe and Gys Wessels. The team was coached by Steve Strauss of AT&T Laboratories.

"Behind every successful man," quipped Oelschig in accepting the award, "stands a totally flabbergasted mother-in-law. Let me assure you that there will be a large number of flabbergasted skeptics of management science and operations research in the Republic of South Africa after today. You have no idea what this award really means, not only to the military officers and the consultants on the team, but to the wider military community in our country.

"The past few years have been extremely difficult ones for the military profession in South Africa," Oelschig continued. "We have been viewed, and in some cases still are, as the real opposition to reform and transformation in our country. Yet the military has also been acutely aware of the national expectation of diligent stewardship of the resources allocated to us. This award not only recognizes the professional standard of work produced by military planners, but also lends valuable credibility to our claim to be apolitical and loyal to the Constitution.

"Our primary role remains that of defending the Republic of South Africa, its citizens and its interests and to do so in the most responsible and cost effective manner. This award proves that we are applying ourselves to the problem in a modern, responsible and professional manner for the good of the nation."

Oelschig said that winning the award against high quality competition confirms his assessment that the Edelman competition is the "Olympic Games of MS/OR."

The other finalists included:

The Federal Highway Administration, for its development of a method, acceptable to the U.S. DOT, which allows road funds to be used for preventative maintenance on bridges, saving billions of dollars in the process.

National Health Service (England), for developing a formula to project health care needs and the resulting needed flow of money to regional health services.

Kuwait Finance Ministry for constructing a formula which allowed the country's courts to settle cases resulting from the Souk al Manakh stock market crash.

AT&T Capital Corp. for designing a decision automation system which allows the company to make 70 percent of its credit decisions automatically.

National Car Rental for its work utilizing operations research to reverse a downward financial trend and bring the company back to profitability.

Procter and Gamble for developing computerized tools that helped reorganize the company's product supply system, allowing Procter & Gamble to determine the best location for plants and distribution centers.

The Franz Edelman Award, including a $10,000 cash award, recognizes outstanding implemented work. It is presented to the team that has best developed a proven program which delivers major benefits to a company or organization. In addition, the program must be based on scientific principles. The honor recognizes organizations that have used OR/MS to achieve a positive, significant impact on operations. Finalists' presentations are videotaped for the Franz Edelman Videotape Library.

E-mail to the Editorial Department of OR/MS Today: orms@lionhrtpub.com

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