Best Management Practices: Reengineering the Air Force's Logistics System Can Yield Substantial Savings
NSIAD-96-5
Published: Feb 21, 1996. Publicly Released: Feb 21, 1996.
Skip to Highlights
Highlights
Pursuant to a congressional request, GAO reviewed the Air Force's management of its reparable parts inventory, focusing on: (1) commercial airline industry practices to streamline logistics operations and improve customer service; (2) Air Force reengineering efforts to improve its logistics system and reduce costs; and (3) barriers to the Air Force's reengineering efforts.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | To build on the existing Air Force reengineering efforts and achieve major logistics system improvements, the Secretary of Defense should commit and engage top-level Department of Defense (DOD) managers to support and lead Air Force reengineering efforts to ensure its success. |
Closed – Implemented
In his April 8, 1996 response to the report, the Deputy Under Secretary of Defense (Logistics) stated that: (1) the Air Force had been asked to provide a report to the Secretary of Defense; (2) the Secretary of Defense would address obstacles identified in the Air Force report; and (3) the Air Force would take steps to institutionalize reengineering efforts.
|
| Department of Defense | The Secretary of Defense should direct the Secretary of the Air Force to incorporate additional leading-edge logistics concepts into the existing Lean Logistics program, where feasible. Specific concepts that have been proven to be successful and should be considered, but have not been incorporated in the current Air Force program include: (1) installing information systems that are commercially available to track inventory amounts, location, condition, and requirements; (2) counting existing inventory once new systems are in place to ensure accuracy of the data; (3) establishing closer relationships with suppliers; (4) encouraging suppliers to establish local distribution centers near major repair depots for quick shipment of parts; (5) using integrated supplier programs to shift to suppliers the responsibility for managing certain types of inventory; (6) using third-party logistics services to manage the storage and distribution of reparable parts and minimize DOD information technology requirements; (7) reorganizing workshops, using the cellular concept where appropriate, to reduce the time it takes to repair parts; and (8) integrating successful reengineered processes and flexible, team-oriented employees in new facilities (like the green-field sites) to maximize productivity improvements, as new facilities are warranted to meet changes in the types and quantities of aircraft. |
Closed – Implemented
The Air Force is applying concepts GAO recommended in the Aircraft Repair Enhancement Program and Depot Repair Enhancement Program. In addition, the overall focus of these programs is to reduce the cycle time associated with aircraft maintenance and component overhaul. This meets the intent of the recommendations. One of the key initiatives being tested by the Air Force is the virtual prime vendor program, which may significantly improve supply system effectiveness and reduce inventory levels of hardware items.
|
| Department of the Air Force | The Secretary of the Air Force should prepare a report to the Secretary of Defense that defines its strategy to adopt these leading practices and expand the reengineering program Air Force-wide. |
Closed – Implemented
On September 16, 1996, the Air Force reported on the strategy to include GAO-recommended practices in the Lean Logistics program. Senior Air Force officials have detailed the Air Force response to GAO's recommendations, which fall under several Air Force-wide programs. These initiatives are intended to significantly improve the Air Force logistics systems, and involve six primary principles. These principles are: customer-driven repair, demand-driven supply, consolidated inventories, tightened repair and manufacturing processes, innovations in contracting, and rapid transportation. In addition, the Air Force developed a training course taught at the highest levels of AFMC and throughout the command at all levels, which emphasized the need for change to a lean environment. Prototype demonstration projects were set up in all five Air Logistics Centers to demonstrate new "Lean Logistics" concepts. These initiatives embrace the concepts recommended in the report.
|
| Department of the Air Force | The Secretary of the Air Force should establish milestones for the report's preparation and issuance and identify at a minimum the: (1) barriers or obstacles that would hinder the Air Force from adopting these concepts; (2) investments (people, skills, and funding) required to begin testing these concepts and the projected total costs to implement them Air Force-wide; (3) potential savings that could be realized; and (4) Air Force and other DOD components whose support will be needed to fully test these new concepts. |
Closed – Implemented
In a December 30, 1996 status report on reengineering initiatives, the Air Force detailed current initiatives status, milestones, obstacles and investment requirements. This meets the intent of the recommendation.
|
| Department of Defense | The Secretary of Defense should use the Air Force's report to set forth the actions and milestones to alleviate any barriers or obstacles (such as overcoming resistance to organizational change and improving outdated inventory information systems), provide the appropriate resources, and ensure that collaboration between the Air Force and other DOD components that would enable the Air Force to achieve an integrated approach to reengineering its processes. |
Closed – Implemented
The Air Force report did not identify obstacles or resource requirements that required OSD intervention.
|
| Department of Defense | Once these steps are taken, the Secretary of Defense should direct the Secretary of the Air Force to institutionalize a reengineering effort that is consistent with successful private-sector reengineering efforts. These efforts include: (1) communicating reengineering goals and explaining them to all levels of the organization; (2) training in skills to enable employees to work across functions and modifying this training as necessary to support the reengineering process; and (3) tailoring rewards and incentives to encourage and reinforce desired behaviors. |
Closed – Implemented
The Air Force has established training programs to communicate the need for operating using new business practices, resulting in a leaner environment. In addition, the Air Force is reorganizing its workforce to support the DREP process and developing new position descriptions. With these efforts, the Air Force is meeting the intent of the recommendations.
|
Full Report
Office of Public Affairs
Topics
Air Force suppliesAirlinesBest practicesCustomer serviceEquipment repairsFederal supply systemsInventory control systemsLogisticsMilitary cost controlPrivate sector practicesManagement reengineeringSpare partsComparative benchmarking products