This study shows the effect of inventory policy change from supplier-based to customer-based. We focus on the service level, cost, and information distortion of the Military Supply Chain(MSC) with System Dynamics. We design MSC model according to field practician interviews by using Vensim. The simulation makes a comparison between supply-based inventory policy performances and order-based inventory policy performances. In order to evaluate the MSC performances, we measure the accumulation of backlog(service level), supply chain cost, and order percentage overshoot(information distortion). The results show that 1) changing inventory policy from supplier-based to end customer order-based gets a good customer service, reduces MSC cost, and prevents information distortion, 2) changing inventory policy from supplier-based to immediate customer order-based reduces a small amount of MSC cost and deteriorates customer service, and 3) supply level is main factor for MSC performances improvement. This study implicates the policy change makes a improvement of MSC performance without introducing information system.