Defense Inventory Management: Expanding Use of Best Practices for Hardware Items Can Reduce Logistics Costs
NSIAD-98-47
Published: Jan 20, 1998. Publicly Released: Jan 20, 1998.
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Highlights
Pursuant to a congressional request, GAO reviewed the Department of Defense's (DOD) progress in adopting inventory management practices for hardware items, focusing on: (1) DOD and private-sector practices for managing hardware items; (2) whether DOD has adopted best practices for these items; and (3) opportunities that DOD can take advantage of to improve its management of hardware items.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | To encourage the Defense Logistics Agency (DLA) and the services to more aggressively apply best practices to its operations, the Secretary of Defense should identify a "Champion of Change" within the Office of the Secretary of Defense that would be responsible for coordinating and overseeing improvement initiatives throughout DOD's operations and ensuring the prime vendor and integrated supplier concepts: (1) encompass a broader part of DOD's operations; (2) fully use the services offered in the private sector; and (3) are used by all military services whenever it is cost-effective to do so. |
Closed – Implemented
The Office of the Deputy Under Secretary of Defense (Logistics) has been delegated the responsibility for coordinating and overseeing improvement initiatives throughout DOD's operations. According to OSD, this office will be responsible for ensuring the prime vendor and integrated suppliers are used to the maximum extent feasible.
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| Department of Defense | To encourage DLA and the services to more aggressively apply best practices to its operations, the Secretary of Defense should direct: (1) the Secretary of the Army to identify at least one repair depot location that will join the other services in testing the prime vendor concept; and (2) the secretaries of the military services to identify repair activities at operating bases as test sites. |
Closed – Implemented
On December 15, 1997, the Acting Deputy Under Secretary of Defense (Logistics) requested that the Army identify a maintenance depot to test the prime vendor and integrated supplier concept. At that time, the Secretary also requested that the Army, Navy, and Air Force identify operating bases to test the prime vendor concept. In response to the Secretary's request, the Army identified Anniston Army Depot and Fort Riley as sites to test the prime vendor and integrated supplier concepts. The Navy identified Naval Aviation Depot North Island, Naval Aviation Depot Cherry Point, and Naval Aviation Depot Jacksonville as test sites. The Air Force identified Warner Robins Air Logistics Center as its test site for the concepts. GAO's next recommendation, to conduct a test at these sites, may result in significant savings.
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| Department of Defense | To encourage DLA and the services to more aggressively apply best practices to its operations, the Secretary of Defense should direct the Director, DLA, and the secretaries of each military service to establish a test of the integrated supplier concept at one or more repair depots. DLA and the military services should: (1) establish aggressive milestones for testing and implementing the prime vendor and integrated supplier programs so as not to delay implementing such programs if the tests find them to be feasible; and (2) develop the means to expeditiously measure the total costs and benefits under the prime vendor and integrated supplier programs to compare them to the total costs and benefits incurred under the traditional system. |
Closed – Implemented
In response to the Secretary's request, the Army identified Anniston Army Depot and Fort Riley as sites to test the prime vendor and integrated supplier concepts. The Navy identified Naval Aviation Depot North Island, Naval Aviation Depot Cherry Point, and Naval Aviation Depot Jacksonville as test sites. The Air Force identified Warner Robins Air Logistics Center as its test site for the concepts. The military services are establishing milestones and plans for testing the concepts. Several contracts have been awarded to prospective prime vendors and GAO is preparing an accomplishment report on this initiative. Other accomplishments will be prepared when integrated supplier concepts are fully implemented at these locations. This action satisfies the intent of this recommendation and therefore GAO is closing it out.
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Topics
Best practicesComparative benchmarking productsFederal property managementFederal supply systemsPrime vendorInventory control systemsLogisticsMilitary cost controlMilitary inventoriesPrivate sector practicesSurplus property