oversight

Management of Items Subject to Repair System in the Air Force at the Ogden, San Antonio and Warner Robins Air Material Areas

Published by the Government Accountability Office on 1971-02-16.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

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                                    UNITED STATES GENERAL ACCOUNTING OFFICE
                                                WASHINGTON,   D.C.   20548


    DEFENSE   DIVISION




                     CommandingGeneral, Air Force Logistics Command
                     Wright-Patterson Air Force Ease, Ohio 45433
                             Attention:   MCIML
                     Dear Sir:
                          The General Accounting Office has made a limited review of
                     the Managementof Items Subject to Repair (MZXB) system in the
                     Air Force at the Ogden, San Antonio, and Warner Robins Air
                     Materiel Areas. Our review was generally confined to the repair
                     programs affecting fiscal years 1969, 1970, and 1971.

                               During the course of our review, we identified the follow-
                         ing conditions related to MISTRwhich we feel require management
                         attention.
                              :-Unreliable long-range repair projections are
                                resulting from the use of erroneous and un-
                                 supported data.
                              --Unjustified  or premature repairs are resulting
                                from invalid adjustments made by inventory
                                managers to the biweekly repair schedules.

                              --Excess repair parts are being accumulated at
                                 the maintenance inventory centers as a result
                                 of using invalid repair parts standards and
                                 an absence of consistent procedures for
                                 requisitioning.
                               The occurrence of the above conditions was sufficiently
                         frequent, in our opinion, to indicate that MISTR, a basically
                         sound system, requires an increased degree of surveillance to
                         insure it is properly and consistently implemented.

                         LOI’TG-RANGE
                                    RFQJJI~TS

                              We examined 22 randomly selected "Hi-Valu" items to deter-
                         mine the validity of the data used to project long-range repair




                                           50 TH ANNIVERSARY         1921 - 1971
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            requirements for two quarters.  The following table illustrates
            the extent of the erroneous data used in the repair computations
            for these 22 items.
                                                           number of Errors Found
               Description of Elements                    1st quarter 1st quarter
               Used in the Commtation                       FY 1970      FY 1971
            Depot Stock Level                                 10           8
            Assets (already in the inventory)                  4           2
            Quantitative (additional assets reqtired
                           for special purposes)              10           6
            Repair Cycle Time
            Production Lead Time                              16          J
            Administrative Lead Time                          18          20

                 Most of the errors noted related directly to unsupported data
            used by inventory managers in computing requirements. We did not
            quantify the effect of these errors on repair projections, but
            observed that they generally resulted in overstated repair require-
            ments.
                  The impact of erroneous camputations under the MISTR system
            is felt in many other ways as well, The system is used to (1)
            determine procurement quantities, (2) stratify  requirements and
            asset&for managementanalysis, (3) prepare budgets, and (4) make
            decisions on retention, disposition and interservice transfer of
            assets,
            SHORT-RANGE
                     PEQUIRTCMENTS
                 The MISTR system was designed to alert   the inventory managers
            every 2 weeks when and with what priority  repa%r actions should be
            scheduled in order to replenish depot stocks up to authorized levels
            and to sustain those levels while meeting the demandsof using
            activities.    For more than 2 years, however, the demandfor repair
            actions to fill backorders has prevented the scheduling of repair
            for depot stocks, and generaXl.y, only those items with outstanding
            backorders were scheduled for repair.
                  To overcome this condition, inventory managers continually
            altered the short==range repair schedules to show backorders,    .
            whether or not any actually existed. This practice provided the
            inventory managers with some assurance that at least a portion
            of the total requirement would be avaiLable for depot stocks.
            However, ft overlooked the fact that such scheduling could be
            preempting repafrs on other items more urgently needed.
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            Following is an example:
                                              units     Units as
                                              ccunputed adjusted Net
            Repair to be applied against      by MISTR by IM     Change
            High Priority Backorders             0          41         -l-41
            Low Priority Rackorders,
              plus l/2 the depot level          66                     -14
            Routine Stock Replenishment         61          ;:         -27

               By showing a large rep&r requirement to meet unfill;d  high
        priority requisitions,   the inventory manager was able to gain some
        assurance that at least a portion of the total requirement computed
        by the MISTR system would be repaired during the 2-week period for
        which the computation was made:, At the time the adjustment was
        made, however, there were no outstanding high priority backorders.
             In our opinion, the number and extent of invalid adjustments
        to the short-range repair requirements constitute a serious lack
        of supply discipline at the depot level. Under the present austere
        conditions and Emited resources currently available to the Air
        Force, we believe the constant changing of repair requirements
        and priorities  could cause or contribute to:
             Z-Unnecessary or premature repair of some items while
               failing to repair other items more urgently needed.
             --Unnecessary or premature procurement and acCumul.ation
               of some repair parts while perpetuating shortages of
                others.
             --Withholding from depot managementpotentially serious
               production problems which may be correctable with
               appropriate managementaction.
             --Misstating to higher Air Force echelons the repair
               requirements, priorities,    and repair capability by
               organic maintenance facilities.
             We believe that the MISTR system is basically sound and is .
        workable, even under the austere circumstances now facing the
        Air Force. It must be recognized, however, that any such system
        is merely a means to an end and that, unless a reasonable degree
        of supply discipline is exercised and enforced, the 'system can-
        not operate effectively.
JZXCESS
      PARTSIN I'@mC!E       ACTIVITIES
      At each of the five air materiel areas, maintenance inventory
.centers have been established to provide prepositioned repair parts
 adjacent to the maintenance shops to support the biweekly repair
 program. These centers form an integral part of the MISTRoperation,
     At one Air Force maintenance activity,   there were I.2 mainte-
nance inventory centers being operated to support the maintenance
shops. In March 1970 these I.2 centers had repair parts on hand
valued at $6.8 million, of which $3.4 million, or one-half of the
parts were acknowledged by the centers as being excess to cuP'rent
or projected needs.
     Webelieve that excesses accumulated in the centers primarily
because the maintenance activities were not consistent in the manner
in which they requisitioned material and the material standards,
which reflect the rate at which repair parts are expected to be
replaced in repairing a piece of equipment, were not reliable.
      In somecases, parts were replenished on the basis of projected
quarterly needs; while in others, they were replenished on an as-
needed basi s . In somecases parts were requisitioned by production
personnel, and in others, requisitidning was performed by stock
clerks in the centers.
      At one location, our examination of material standards for
152 repair parts applicable to seven items undergoing repair during
the g-month period ending June 30, 1969, showedthat 96 percent of
the parts experienced variances between the standards and the quan-
tities actually used, The variances were minor for one-half of the
parts, but variances for the remaining 46 percent ranged from 11 to
100 percent between the standards and the quantities actually used
during the g-month period.
      Most of the standards were inflated, which, we believe, caused
excesses, or contributed to their accumulation, in the inventory
centers and ultimately could result in unnecessary procurement of
repair parts.
      Further, the excess parts were retained in the centers because
the stock fund from which the parts were obtained would not grant
credit for parts returned, unless the stock f'und was in the process
of buying additional parts, and adequate surveillance was lacking
to make proper disposition of the excesses.




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CONCLUSIONS
      The Air Force requested $443.6 million for fiscal year 1971 to
overhaul equipment managedunder the MISTR system. However, on the
basis of OUTreview of system operations and tests of selected items,
we believe that the Air Force has little   assurance that the MIS!PR
system is accomplishing its intended purpose--the orderly accomplish-
ment of this large repair program on a realistic,   priority-of-need
basis.
          3c         *          *         *         *


      We appreciate the cooperation extended to our staff during this
review. We will be glad to discuss these ma-bters f'urther and will
appreciate your commentsand advice of any actions taken as a
result of this letter.
     Copies of this letter   are being sent to the Comptroller of
the Air Force.
                                       Sincerely yours,




                                       Associate Director




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