oversight

High-Risk Series: Defense Inventory Management

Published by the Government Accountability Office on 1997-02-01.

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

                United States General Accounting Office

GAO             High-Risk Series




February 1997
                Defense Inventory
                Management




GAO/HR-97-5
GAO   United States
      General Accounting Office
      Washington, D.C. 20548

      Comptroller General
      of the United States



      February 1997
      The President of the Senate
      The Speaker of the House of Representatives

      In 1990, the General Accounting Office began a special
      effort to review and report on the federal program areas
      its work identified as high risk because of vulnerabilities
      to waste, fraud, abuse, and mismanagement. This effort,
      which was supported by the Senate Committee on
      Governmental Affairs and the House Committee on
      Government Reform and Oversight, brought a
      much-needed focus on problems that were costing the
      government billions of dollars.

      In December 1992, GAO issued a series of reports on the
      fundamental causes of problems in high-risk areas, and in
      a second series in February 1995, it reported on the status
      of efforts to improve those areas. This, GAO’s third series
      of reports, provides the current status of designated
      high-risk areas.

      This report describes our concerns about the Department
      of Defense’s management of supplies that support the
      military services. It focuses on the need for the
      Department to be more aggressive in changing its
      management culture by taking advantage of new
      management practices, technologies, and logistics
      systems so that inefficiencies can be eliminated.
Copies of this report series are being sent to the
President, the congressional leadership, all other
Members of the Congress, the Director of the Office of
Management and Budget, and the heads of major
departments and agencies.




James F. Hinchman
Acting Comptroller General
of the United States




            Page 2      GAO/HR-97-5 Defense Inventory Management
Page 3   GAO/HR-97-5 Defense Inventory Management
Contents



Overview                                                          6

Managing DOD’s                                                   10
Inventory
Presents
Challenges
Further Changes                                                  12
Are Needed in
DOD’s Inventory
Management
Practices
What Needs to Be                                                 26
Done
Related GAO                                                      29
Products
1997 High-Risk                                                   31
Series




                   Page 4   GAO/HR-97-5 Defense Inventory Management
Page 5   GAO/HR-97-5 Defense Inventory Management
Overview



              The Department of Defense (DOD) uses its
              secondary inventory—spare and repair
              parts, clothing, medical supplies, and other
              items—to support its operating forces. In
              September 1995, DOD reported that it had a
              secondary inventory valued at $69.6 billion.
              Based on DOD data, we estimate that about
              half of the inventory includes items that are
              not needed to be on hand to support DOD war
              reserve or current operating requirements.


The Problem   In 1992, we reported that DOD had wasted
              billions of dollars on excess supplies. We
              reported that the problem resulted because
              inherent in DOD’s culture was the belief that
              it was better to overbuy items than to
              manage with just the amount of stock
              needed. Had DOD used effective inventory
              management and control techniques and
              modern commercial inventory management
              practices, it would have had lower inventory
              levels and would have avoided the burden
              and expense of storing excess inventory.

              In 1995, we reported that managing DOD’s
              inventory presented challenges that partially
              stemmed from the downsizing of the military
              forces. We reported that DOD needed to move
              aggressively to identify and implement viable
              commercial practices and to provide


              Page 6     GAO/HR-97-5 Defense Inventory Management
           Overview




           managers with modern, automated
           accounting and management systems to
           better control and monitor its inventories.


Progress   DOD has clearly had some success in
           addressing its inventory management
           problems, but much remains to be done. DOD
           has implemented, in a limited manner,
           certain commercial practices such as direct
           vendor delivery for medical and food items.
           However, these initiatives address only
           about 3 percent of the items for which this
           concept could be used. DOD is in the midst of
           changing its inventory management culture.
           Also, it has reduced its inventory since our
           1995 high-risk report. However, we believe
           that much of the reduction was the result of
           reduced force levels, which reduced overall
           demands on DOD’s logistics systems.

           DOD has also made little progress in
           developing the management tools needed to
           help solve its long-term inventory
           management problems. It has not achieved
           the desired benefits from the Defense
           Business Operations Fund (DBOF), and the
           Corporate Information Management (CIM)
           initiative has not produced the economies
           and efficiencies anticipated. In
           December 1996, the Defense Comptroller


           Page 7     GAO/HR-97-5 Defense Inventory Management
                  Overview




                  dissolved DBOF and created separate Army,
                  Navy, Air Force, and Defense-wide working
                  capital funds. The four funds will continue to
                  operate under the revolving fund
                  concept—using the same policies,
                  procedures, and systems as they did under
                  DBOF.


                  DOD  also abandoned its initial strategy to
                  deploy a set of integrated systems across all
                  inventory control points and has embarked
                  on a strategy to deploy the systems
                  individually at selected sites without taking
                  the steps necessary to ensure that the effort
                  will bring positive results.

                  As a result of the lack of progress with some
                  of the key initiatives, it has become
                  increasingly difficult for inventory managers
                  to manage DOD’s multibillion-dollar inventory
                  supply system efficiently and effectively.
                  Large amounts of unneeded inventory,
                  inadequate inventory oversight, overstated
                  requirements, and slowness to implement
                  modern commercial practices are evidence
                  of the lack of progress.


Outlook for the   Unless DOD takes more aggressive actions, its
Future            inventory management problems will
                  continue into the next century.


                  Page 8     GAO/HR-97-5 Defense Inventory Management
Overview




In the short term, DOD needs to emphasize
the efficient operation of its existing
inventory systems. This includes ensuring
the accuracy of inventory requirements to
preclude the acquisition of unneeded
inventory. It also needs to make greater use
of proven commercial practices where more
immediate savings can be achieved.

In the long term, DOD must establish goals,
objectives, and milestones for changing its
culture and adopting new management tools
and practices. These solutions include
(1) setting aggressive milestones for
substantially expanding the use of modern
commercial practices and (2) providing
managers with the tools—critical to
managing inventory efficiently—that it had
planned to provide through the DBOF and CIM
initiatives. DOD must also continue to explore
other alternatives, such as using business
case analyses to identify opportunities for
outsourcing logistics functions.

At the same time, continued close
congressional oversight is key to helping to
ensure that financial resources are not
wasted through the acquisition of additional
inventories that are not needed and that DOD
obtains the tools necessary for efficient and
effective inventory management.


Page 9     GAO/HR-97-5 Defense Inventory Management
Managing DOD’s Inventory Presents
Challenges


            Between 1989 and 1995, DOD’s forces
            decreased significantly. Active duty soldiers,
            sailors, marines, and airmen and airwomen
            decreased from 2.1 million to 1.5 million;
            attack and fighter aircraft dropped from
            2,800 to 1,784; ships decreased from 570 to
            372; and active Army divisions decreased
            from 18 to 12. For the near future, DOD is
            predicting less drastic decreases.

            Between 1989 and 1995, the inventories
            being held to support DOD’s forces decreased
            from $92.5 billion to $69.6 billion.

            Parallel to the force and inventory
            decreases, DOD’s total budget also decreased,
            from $291 billion in 1989 to $252 billion in
            1996. Part of the decrease was directly
            related to reductions in funds available for
            the purchase of inventory. Between 1989 and
            1996, the Congress reduced DOD’s
            procurement and operations and
            maintenance budgets by about $7.5 billion to
            prevent the acquisition of unneeded
            inventory and to encourage DOD to improve
            its inventory management practices. For
            example, in 1992, the Congress rescinded
            $1 billion of fiscal year 1992 operations and
            maintenance budget authority due to
            excessive on-hand inventory. Also, in 1992,
            the Congress reduced DOD’s fiscal year 1993


            Page 10     GAO/HR-97-5 Defense Inventory Management
Managing DOD’s Inventory Presents
Challenges




operations and maintenance budget requests
for purchases of supplies and materials by
$2.9 billion because of excessive inventories.

DOD  has spent billions of dollars on inventory
that is not needed to be on hand to support
war reserve or current operating
requirements and burdened itself with
managing and storing the unneeded
inventory. Much of DOD’s unneeded inventory
was acquired because of outdated and
inefficient inventory management practices.
While downsizing of the military forces
contributed to some of DOD’s excess
inventory, both downsizing and
congressional budget reductions were also
factors in reducing the inventory.

DOD has begun to modernize its inventory
management culture. However, cultural
changes, by their nature, are slowly
achieved. Managing DOD’s multibillion-dollar
inventory during this period of cultural
change, budget reductions, and force
downsizing presents a tremendous challenge
to DOD’s logistics managers. The challenge of
supporting a high level of readiness is made
more difficult by outdated and inefficient
practices, unsolved working capital fund
problems, and the shift in CIM strategy.



Page 11       GAO/HR-97-5 Defense Inventory Management
Further Changes Are Needed in DOD’s
Inventory Management Practices


                 DOD  has made tremendous progress in
                 reducing its inventory since 1989. However,
                 virtually all the problems that contributed to
                 billions of dollars of unneeded inventory still
                 exist. For example, DOD still lacks adequate
                 oversight of its inventory, financial
                 accountability remains weak, and
                 requirements continue to be overstated. DOD
                 has not been as aggressive as possible in
                 implementing modern commercial practices;
                 operations using working capital funds
                 continue to be hindered by DOD’s inability to
                 correct problems; and the CIM initiative
                 currently is not likely to provide the benefits
                 originally anticipated.


DOD Continues    As shown in figure 1, DOD reduced its
to Store Large   inventory from $92.5 billion in 1989 to
Amounts of       $69.6 billion in 1995, a $22.9 billion
Unneeded         reduction.
Inventory




                 Page 12     GAO/HR-97-5 Defense Inventory Management
                                   Further Changes Are Needed in DOD’s
                                   Inventory Management Practices




Figure 1: DOD’s Inventory (fiscal years 1989-95)

100   Dollars in billions

 90

 80

 70

 60

 50

 40

 30

 20

 10

  0

        1989       1990     1991     1992    1993      1994    1995
        Fiscal year




                                   However, as in 1992, about half of the $69.6
                                   billion inventory is beyond what is needed to
                                   support war reserve or current operating
                                   requirements. Included in the inventory
                                   beyond what is needed to support war
                                   reserve or current operating requirements is
                                   $299 million in inventory that DOD designated
                                   for reuse and disposal that had an
                                   acquisition cost of about $12 billion. (See
                                   fig. 2.)


                                   Page 13          GAO/HR-97-5 Defense Inventory Management
                             Further Changes Are Needed in DOD’s
                             Inventory Management Practices




Figure 2: DOD’s Inventory (as of Sept. 30, 1995)

                                              Beyond war reserves and current
                                              operations - $33.7 billion

                                              0.4%
                                              Designated for reuse or disposal -
                                              $0.3 billion




   • 48.4%                 51.2% •            War reserves and current
                                              operations - $35.7 billion




DOD’s Inventory              We previously reported that DOD had
Management                   acknowledged the necessity to change its
Culture Is Slowly            inventory management culture but was slow
Changing                     in taking steps to do so.

                             In 1990, DOD initiated an inventory reduction
                             plan to meet the challenge of resizing its


                             Page 14        GAO/HR-97-5 Defense Inventory Management
                    Further Changes Are Needed in DOD’s
                    Inventory Management Practices




                    inventories while maintaining high levels of
                    readiness. Some of the objectives of the 1990
                    plan are articulated in DOD’s current logistics
                    strategic plan. The continuity of DOD’s
                    inventory reduction plans indicates that top
                    management has made a long-term
                    commitment to change the Department’s
                    inventory management culture and provide
                    an efficient and effective supply system. To
                    some extent, the large inventory reductions
                    that have taken place since 1989 can be
                    attributed to DOD’s change in culture.

                    Some of DOD’s logistics objectives have been
                    implemented; others have not and will not be
                    for many years to come. In 1992, we reported
                    that academic experts and business
                    executives generally agreed that a culture
                    change is a long-term effort that takes at
                    least 5 to 10 years to complete. Although a
                    change in DOD’s management culture is
                    underway, continued support of its top
                    managers is critical to successful completion
                    of the cultural change.


Adequate            In 1995, we reported that DOD’s 1994 strategic
Inventory           plans for logistics called for improving asset
Oversight Has Yet   visibility in such areas as in-transit assets,
to Be Achieved      retail-level stocks, and automated systems.
                    The asset visibility plans were to be


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                 Inventory Management Practices




                 completely implemented by 1996. According
                 to DOD’s current plan, the total asset visibility
                 initiative will not be completely
                 implemented until 2001.

                 The lack of adequate visibility over operating
                 materials and supplies substantially
                 increases the risk that millions of dollars will
                 be spent unnecessarily. For example, in
                 August 1996, we reported that Navy
                 managers did not have adequate visibility
                 over $5.7 billion in operating materials and
                 supplies on board ships and at 17
                 redistribution sites. We estimated that
                 because of the lack of oversight in the first
                 half of 1995, item managers ordered or
                 purchased items in excess of operating level
                 needs and that as a result, the Navy will
                 incur unnecessary costs of about $27 million.


Requirements     In 1992 and 1995, we reported that DOD had
Continue to Be   problems in accurately determining how
Overstated       much inventory it needs to buy. Our recent
                 work shows that continues to be the case.

                 In recent work, we reported that DOD had
                 made limited progress in reducing
                 acquisition lead times because its initiatives
                 had not been evenly implemented by the
                 military services and Defense Logistics


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Further Changes Are Needed in DOD’s
Inventory Management Practices




Agency (DLA). We reported that DOD could
reduce its lead time by 25 percent over a
4-year period and save about $1 billion. DOD
could achieve this reduction by renewing its
emphasis on prompt implementation of its
1990 lead-time reduction initiatives,
periodically validating and updating old data
for long lead-time items, and considering
lead-time reductions as a factor in deciding
whether to continue purchasing spare parts
from the prime contractor or to purchase
them from the actual manufacturer.

In January 1995, we reported that the Navy
and the DLA stock millions of dollars of
unnecessary “insurance items” (parts that
are not expected to fail through normal
usage). The unnecessary inventories accrued
because the DOD components do not
periodically review insurance items to
ensure that they are mission essential and
stocked in appropriate quantities.
Additionally, DOD spends millions of dollars
each year to manage and maintain these
unnecessary inventories.

In March 1996, we reported that the Air
Force and the Navy budgeted $132 million
more than was needed for aviation spare
parts because of questionable policies
concerning the determination of


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                 Inventory Management Practices




                 requirements and the accountability for
                 depot maintenance assets. The Air Force did
                 not consider $72 million of on-hand assets,
                 and the Navy counted $60 million in depot
                 maintenance requirements twice.

                 In a September 1996 report on the fiscal year
                 1997 DOD budget, we identified potential
                 reductions of $723 million in the inventory
                 management area. The potential reductions
                 were based on (1) reclaiming spare parts
                 from excess aircraft; (2) considering parts
                 on hand at the depot maintenance facilities
                 as an offset to spare and repair parts
                 requirements; (3) eliminating duplicated
                 depot maintenance requirements;
                 (4) reducing requirements that were
                 overstated due to inaccurate lead times,
                 demand rates, and due-out quantities; and
                 (5) correcting inaccurate budget data.


Financial        In 1992 and 1995, we reported that DOD
Accountability   lacked financial accountability and control
and Control      over its inventory but that it was taking
Remain Weak      corrective actions. Improvements, however,
                 have been minimal, and accountability and
                 controls remain weak. In his February 1996
                 annual statement of assurance required by
                 the Federal Managers’ Financial Integrity
                 Act, the Secretary of Defense summarized


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                   Inventory Management Practices




                   the status of high-risk areas relative to
                   inventory management.

                   Regarding DOD’s financial accounting process
                   and systems, the Secretary identified
                   inadequate internal controls and other
                   significant deficiencies such as the

               •   use of a variety of nonintegrated systems;
               •   inability of current systems to respond
                   rapidly to change;
               •   lack of automated indicators that measure,
                   or are linked to, costs, performance
                   measurements, or other output
                   measurements;
               •   difficulties with consistently valuing and
                   reconciling physical inventories to financial
                   account balances; and
               •   inaccuracies in the valuation of property,
                   plants, and equipment.


DOD Can Make       In 1992 and 1995, we reported that DOD could
More Use of        save millions by implementing private sector
Commercial         practices that streamline logistics operations
Practices          and reduce layers of inventory.

                   DOD’s large inventory levels reflect the
                   management practice of buying and storing
                   supplies at both wholesale and retail
                   locations to ensure they are available to


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Further Changes Are Needed in DOD’s
Inventory Management Practices




customers—sometimes years in advance of
their need. DOD often stores inventories in as
many as four different layers between
suppliers and end users. These practices
result in inventory that turns over slowly and
produce large amounts of old, obsolete, and
excess items.

In contrast, the private sector logistics
philosophy includes (1) using “just-in-time”
business practices that shift responsibilities
for storing and managing inventory to
suppliers, (2) shifting responsibility for
managing items to suppliers through the use
of long-term agreements with only a few key
suppliers, (3) using direct delivery practices
that bypass the need for intermediate
handling and storage, and (4) eliminating
paperwork and speeding up ordering by
using electronic ordering systems and bar
coding.

While DOD has begun to move toward
modern commercial practices, its initiatives
have generally been limited in scope and
represent only a small portion of DOD’s
overall operations. For example, in
July 1996, we reported that while the Navy
was working to improve its logistics system,
it was not taking the opportunity to
incorporate the airline industry’s best


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Further Changes Are Needed in DOD’s
Inventory Management Practices




practices, which have the potential to save
hundreds of millions of dollars. Specific
practices that have enabled companies to
save money include (1) repairing items
promptly after they break; (2) reorganizing
the repair process to bring all resources
required—tooling and support equipment,
personnel, and inventory—together in one
location; (3) using local distribution centers
and integrated supplier programs to improve
consumable item support and reduce
“just-in-case” inventory; and (4) using
third-party logistics providers to manage
logistics functions.

Also, in February 1996, we reported that the
Air Force had begun a reengineering
program aimed at redesigning its logistics
operations. While the effort includes testing
some leading-edge private sector practices,
the Air Force could include additional
practices such as the greater use of
third-party logistics services, closer
partnerships with suppliers, the use of local
distribution centers, the use of centralized
repair facilities, and the modification of
repair facilities to accommodate these
practices.

DLA’s use of best inventory practices is best
exemplified for personnel (medical, food,


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Further Changes Are Needed in DOD’s
Inventory Management Practices




and clothing) items. Since 1993, DLA has
taken steps to use prime vendors to supply
personnel items directly to military facilities.
However, this initiative represents only
about 3 percent of the items for which this
concept could be used.

DLA can do more to achieve substantial
savings. It continues to store large amounts
of hardware items, such as bolts, valves, and
fuses, that cost millions of dollars to manage
and store. DLA inventories of hardware items
existing in 1992 are expected to decrease
only 20 percent by 1997. Even then,
hardware inventories could last for more
than 2 years.

To date, DLA has not tested the most
innovative commercial practices GAO has
seen used by companies to reduce
inventories and costs, such as using
“supplier parks” and other techniques that
give established commercial distribution
networks the responsibility to manage, store,
and distribute inventory on a frequent and
regular basis directly to end users. If DLA
adopted these practices, hardware
inventories and related management costs
could be significantly reduced.




Page 22       GAO/HR-97-5 Defense Inventory Management
                   Further Changes Are Needed in DOD’s
                   Inventory Management Practices




DOD Is Exploring   According to DOD’s logistics strategic plan,
Outsourcing        outsourcing—drawing on the abilities of the
Options            commercial sector—is a key tool for
                   streamlining logistics business processes.
                   The plan calls for developing outsourcing
                   initiatives for functions currently carried out
                   by DLA’s Defense Reutilization and Marketing
                   Service, distribution depots, and inventory
                   control points. By drawing on the private
                   sector’s abilities to do logistics activities,
                   DOD hopes to provide more efficient and
                   effective support for its military forces.


Key Initiatives    DBOF  and CIM were key to improving
Languish           inventory management. DBOF accounted for
                   most of DOD’s inventory, while the CIM
                   initiative was to provide simplified and
                   reengineered computer systems for
                   distribution and logistics.

                   In 1992, we reported that DOD had begun
                   these two key initiatives. In 1995, we
                   reported that DBOF operations had been
                   hindered by DOD’s inability to correct
                   problems, such as inaccurate financial
                   reports, and that little progress had been
                   made in implementing the CIM initiative.
                   Currently, neither of the initiatives is
                   providing the benefits—gains in efficiency
                   and effectiveness—originally anticipated,


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    Further Changes Are Needed in DOD’s
    Inventory Management Practices




    and benefits will not be realized until far in
    the future, if they are realized at all.

    In March 1995, we reported that DBOF faced
    serious problems and that after 3 years of
    operations little had changed in the DBOF’s
    day-to-day operations. Specifically, we
    reported the following:

•   DOD did not have a systematic process in
    place to ensure that DBOF’s policies were
    implemented consistently, and managers
    lacked necessary guidance to execute
    day-to-day operations.
•   DOD had selected most of DBOF’s interim
    computer systems without first determining
    the total estimated cost to enhance and
    implement these systems across DBOF’s
    business areas.
•   DOD was having difficulty preparing accurate
    financial reports.
•   DOD had returned control of cash to the
    individual components, which was a major
    departure from the benefit of a single cash
    balance.

    The 1997 Defense Authorization Act required
    DOD to conduct a comprehensive study of
    DBOF and to present an improvement plan to
    Congress for approval. Pending the results of
    this study, the Defense Comptroller, in


    Page 24       GAO/HR-97-5 Defense Inventory Management
Further Changes Are Needed in DOD’s
Inventory Management Practices




December 1996, dissolved DBOF and created
separate Army, Navy, Air Force, and
DOD-wide working capital funds. The four
funds will continue to operate under the
revolving fund concept—using the same
policies, procedures, and systems as they did
under DBOF.

Regarding the CIM initiative, we reported in
September 1996 that DOD had determined
that its goal of developing nine standard
integrated systems to improve aspects of
inventory management, such as
requirements determination, would cost
more than originally estimated. DOD
abandoned the strategy of implementing the
standard systems across all inventory
control points. It now plans to deploy each
system at a selected site as the system is
developed. DOD has embarked on this new
strategy without taking steps to ensure that
the additional millions of dollars to be spent
on logistics systems, as well as money
already invested, will bring positive results.
Specifically, DOD did not conduct economic
and risk assessments, did not justify the
change in strategy through its own oversight
process, and proceeded to deploy new
systems without testing them.




Page 25       GAO/HR-97-5 Defense Inventory Management
What Needs to Be Done



            In 1992, we reported that major changes
            were needed in all levels of DOD’s inventory
            management system. We noted that top
            managers needed to take long-range actions
            to (1) change the organizational culture to
            eliminate the overstocking of items,
            (2) increase the use of commercial practices,
            (3) establish and monitor improved
            performance measures that stress
            cost-effectiveness and inventory reductions,
            and (4) improve the computer systems used
            in inventory management.

            In 1995, we reported that DOD needed to
            avoid burdening its supply system with the
            management problems and costs associated
            with accumulating, storing, and maintaining
            large unneeded inventories.

            While we continue to see pockets of
            improvement, DOD has made little overall
            progress in correcting systemic problems
            that have traditionally resulted in large
            unneeded inventories. DOD top management
            needs to continue its commitment to
            changing its inventory management culture
            so that it provides its forces with necessary
            supplies in a timely manner while avoiding
            the accumulation of unneeded materials.




            Page 26    GAO/HR-97-5 Defense Inventory Management
    What Needs to Be Done




    In the short term, DOD needs to continue
    emphasizing the efficient operation of its
    existing inventory systems. As previously
    reported, this includes

•   committing to improved inventory
    management by top management’s emphasis
    on (1) inventory indicators that highlight
    reduction and disposal of unneeded
    inventory, (2) implementation of efficient
    and effective inventory management
    practices, and (3) training personnel in those
    practices and rewarding the right behavior;
•   improving the accuracy of data such as
    requirements and the quantity, condition,
    and value of inventory items managed
    through current logistics and financial
    systems; and
•   aggressively enforcing existing policies and
    procedures that will minimize the acquisition
    and accumulation of unnecessary inventory.

    In the long term, overall solutions include

•   mapping a strategy for completing DOD’s
    initiatives for changing its culture;
•   setting aggressive goals, objectives, and
    milestones for identifying and implementing
    viable and more cost-effective commercial
    practices for supplying its forces;



    Page 27       GAO/HR-97-5 Defense Inventory Management
    What Needs to Be Done




•   establishing goals, objectives, and
    milestones for determining where
    outsourcing logistics functions represents a
    cost-effective and efficient alternative to
    traditional methods; and
•   providing inventory managers with the
    automated, integrated accounting and
    management systems necessary to manage
    its inventory in a world-class manner.

    Close congressional oversight will continue
    to be a critical element as DOD establishes
    plans, goals, objectives, and milestones for
    addressing its inventory management
    processes.




    Page 28       GAO/HR-97-5 Defense Inventory Management
Related GAO Products



            1997 DOD Budget: Potential Reductions to
            Operation and Maintenance Program
            (GAO/NSIAD-96-220, Sept. 18, 1996).

            Defense IRM: Critical Risks Facing New
            Materiel Management Strategy
            (GAO/AIMD-96-109, Sept. 6, 1996).

            Navy Financial Management: Improved
            Management of Operating Materials and
            Supplies Could Yield Significant Savings
            (GAO/AIMD-96-94, Aug. 16, 1996).

            Inventory Management: Adopting Best
            Practices Could Enhance Navy Efforts to
            Achieve Efficiencies and Savings
            (GAO/NSIAD-96-156, July 12, 1996).

            Defense Logistics: Requirement
            Determinations for Aviation Spare Parts
            Need to Be Improved (GAO/NSIAD-96-70,
            Mar. 19, 1996).

            Best Management Practices: Reengineering
            the Air Force’s Logistics System Can Yield
            Substantial Savings (GAO/NSIAD-96-5, Feb. 21,
            1996).




            Page 29     GAO/HR-97-5 Defense Inventory Management
Related GAO Products




Inventory Management: DOD Can Build on
Progress in Using Best Practices to Achieve
Substantial Savings (GAO/NSIAD-95-142, Aug. 4,
1995).

Best Practices Methodology: A New
Approach for Improving Government
Operations (GAO/NSIAD-95-154, May 1995).

Defense Business Operations Fund:
Management Issues Challenge Fund
Implementation (GAO/NSIAD-95-79, Mar. 1,
1995).

High-Risk Series: Defense Inventory
Management (GAO/HR-95-5, Feb. 1995).

Defense Supply: Inventories Contain
Nonessential and Excessive Insurance
Stocks (GAO/NSIAD-95-1, Jan. 20, 1995).

Defense Supply: Acquisition Leadtime
Requirements Can Be Significantly Reduced
(GAO/NSIAD-95-2, Dec. 20 1994).




Page 30      GAO/HR-97-5 Defense Inventory Management
1997 High-Risk Series



             An Overview (GAO/HR-97-1)

             Quick Reference Guide (GAO/HR-97-2)

             Defense Financial Management (GAO/HR-97-3)

             Defense Contract Management (GAO/HR-97-4)

             Defense Inventory Management (GAO/HR-97-5)

             Defense Weapon Systems Acquisition
             (GAO/HR-97-6)

             Defense Infrastructure (GAO/HR-97-7)

             IRS Management (GAO/HR-97-8)

             Information Management and Technology
             (GAO/HR-97-9)

             Medicare (GAO/HR-97-10)

             Student Financial Aid (GAO/HR-97-11)

             Department of Housing and Urban
             Development (GAO/HR-97-12)

             Department of Energy Contract Management
             (GAO/HR-97-13)




             Page 31     GAO/HR-97-5 Defense Inventory Management
1997 High-Risk Series




Superfund Program Management
(GAO/HR-97-14)




The entire series of 14 high-risk reports
can be ordered using the order number
GAO/HR-97-20SET.



Page 32        GAO/HR-97-5 Defense Inventory Management
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