Commercial Practices: DOD Could Save Millions by Reducing Maintenance and Repair Inventories
NSIAD-93-155
Published: Jun 07, 1993. Publicly Released: Jul 22, 1993.
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Highlights
Pursuant to a congressional request, GAO reviewed: (1) the Department of Defense's (DOD) construction, general, and industrial logistics practices; and (2) commercial practices that DOD could adopt to improve its operations and reduce inventory costs.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | The Secretary of Defense should direct DLA and the military services to develop test programs that will determine the applicability of commercial practices to military industrial centers. These efforts should include facilities from the Army, the Navy, and the Air Force, encompass all aspects of inventory management, and quantify the costs and benefits of the changes. Among the practices that should be included are: (1) reducing unnecessary inventory requirements at each center; (2) establishing electronic ordering, invoicing, and bill-paying functions between vendors and DOD facilities; (3) using supplier parks near DOD maintenance facilities (such as air logistics centers) that use the supplies; and (4) eliminating the need to store supplies in the DLA depot system. |
Closed – Implemented
In September 1994, DLA contracted for a feasibility study of using supplier parks at 3 maintenance and repair facilities. In December 1994, the contractor concluded that a supplier park concept was feasible and that it would provide enhanced customer support while reducing both inventory and operating costs at DLA depots and maintenance and repair facilities. In early 1996, the supplier park initiative was replaced by DLA's virtual prime vendor program, a very similar technique to the supplier park concept. DLA is seeking proposals from potential vendors to provide or coordinate the supply support effort for the full range of parts and components consumed in the operation and repair of weapon systems and components. The initial test site is Warner Robins Air Logistics Center. Contract awards are expected to be made during the last quarter of fiscal year 1996. GAO will monitor this issue under job code 709055.
|
| Department of the Air Force | After the practices have been tested, the military services should tailor the changes required at their facilities to apply the successful results of the test programs. Under this flexible approach, DOD could work around special situations, such as the unavailability of commercial distribution systems and overseas operations, and at the same time improve its logistics system and save money. |
Closed – Implemented
In September 1994, DLA contracted for a feasibility study of using supplier parks at 3 maintenance and repair facilities. In December 1994, the contractor concluded that a supplier park concept was feasible and that it would provide enhanced customer support while reducing both inventory and operating costs at DLA depots and maintenance and repair facilities. In early 1996, the supplier park initiative was replaced by DLA's virtual prime vendor program, a very similar technique to the supplier park concept. Presently, DLA is seeking proposals from potential vendors who will be expected to provide or coordinate the supply support effort for the full range of parts and components consumed in the operation and repair of weapon systems and components. The initial test site is Warner Robins Air Logistics Center. Contract awards are expected to be made during the last quarter of fiscal year 1996. GAO will monitor this issue under job code 709055.
|
| Department of the Navy | After the practices have been tested, the military services should tailor the changes required at their facilities to apply the successful results of the test programs. Under this flexible approach, DOD could work around special situations, such as the unavailability of commercial distribution systems and overseas operations, and at the same time improve its logistics system and save money. |
Closed – Implemented
In September 1994, DLA contracted for a feasibility study of using supplier parks at 3 maintenance and repair facilities. In December 1994, the contractor concluded that a supplier park concept was feasible and that it would provide enhanced customer support while reducing both inventory and operating costs at DLA depots and maintenance and repair facilities. In early 1996, the supplier park initiative was replaced by DLA's virtual prime vendor program, a very similar technique to the supplier park concept. Presently, DLA is seeking proposals from potential vendors who will be expected to provide or coordinate the supply support effort for the full range of parts and components consumed in the operation and repair of weapon systems and components. The initial test site is Warner Robins Air Logistics Center. Contract awards are expected to be made during the last quarter of fiscal year 1996. GAO will monitor this issue under job code 709055.
|
| Department of the Army | After the practices have been tested, the military services should tailor the changes required at their facilities to apply the successful results of the test programs. Under this flexible approach, DOD could work around special situations, such as the unavailability of commercial distribution systems and overseas operations, and at the same time improve its logistics system and save money. |
Closed – Implemented
In September 1994, DLA contracted for a feasibility study of using supplier parks at 3 maintenance and repair facilities. In December 1994, the contractor concluded that a supplier park concept was feasible and that it would provide enhanced customer support while reducing both inventory and operating costs at DLA depots and maintenance and repair facilities. In early 1996, the supplier park initiative was replaced by DLA's virtual prime vendor program, a very similar technique to the supplier park concept. Presently, DLA is seeking proposals from potential vendors who will be expected to provide or coordinate the supply support effort for the full range of parts and components consumed in the operation and repair of weapon systems and components. The initial test site is Warner Robins Air Logistics Center. Contract awards are expected to be made during the last quarter of fiscal year 1996. GAO will monitor this issue under job code 709055.
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Best practicesComparative analysisFederal supply systemsInventory controlMilitary cost controlMilitary inventoriesMilitary procurementPrivate sector practicesComparative benchmarking productsLogistics