Defense Inventory: Opportunities Exist to Expand the Use of Defense
Logistics Agency Best Practices (Letter Report, 01/26/2000,
GAO/NSIAD-00-30).
Pursuant to a legislative requirement, GAO evaluated the extent to which
the Defense Logistics Agency (DLA) has implemented commercial inventory
practice initiatives contained in a schedule submitted to Congress,
focusing on: (1) DLA's progress in implementing the initiatives; and (2)
opportunities to build on and expand existing efforts.
GAO noted that: (1) DLA has made significant progress in implementing
the initiatives listed in the schedule; (2) of the 75 initiatives listed
in the schedule, 43 are considered by DLA as completed and 15 have been
awarded contracts; (3) two initiatives were cancelled, 1 was
incorporated into another initiative, and the remaining 14 were still in
the contract negotiation phase or had an otherwise uncertain status; (4)
sales related to these initiatives were estimated to be $2.2 billion, or
about 27 percent of DLA's projected fiscal year (FY) 1999 sales of
secondary inventory items, excluding fuels; (5) of this amount, over
$1.8 billion of sales is associated with four initiatives that relate to
medical, pharmaceutical, and food items while almost $400 million is
associated with the remaining implemented initiatives; (6) the most
effective initiatives to date have been the medical and food prime
vendor initiatives, which have transferred inventory management
functions from DLA to key suppliers; (7) these initiatives enabled DLA
to reduce inventory levels and related costs and improve service to
military customers; (8) initiatives related to hardware and clothing
items have had only a limited impact on business operations, but recent
initiatives may provide a foundation for future improvements because
they also transfer inventory management functions to key suppliers; (9)
DLA is attempting to build on the success of its implemented initiatives
and expand the use of best practices, but significant implementation
obstacles must be overcome; (10) over 90 percent of DLA's estimated FY
1999 sales of hardware items were not covered by the initiatives in the
schedule; (11) to expand the use of best practices, DLA is developing a
strategy that focuses on using commercial distributors to support
military customers for hardware items that are used frequently and
regularly and creating alternative methods for items that are more
unpredictable and difficult to support; (12) in its efforts to adopt
best practices, DLA and the military departments have faced a variety of
implementation issues; (13) many issues are related to concerns over
whether the new practices can adequately meet military supply needs and
how the new practices will affect employees' jobs; and (14) though these
obstacles were overcome in some cases, they are significant because they
can slow or stop implementation efforts or deter the military
departments' full participation in the initiatives.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: NSIAD-00-30
TITLE: Defense Inventory: Opportunities Exist to Expand the Use
of Defense Logistics Agency Best Practices
DATE: 01/26/2000
SUBJECT: Federal supply systems
Inventory control systems
Military inventories
Military materiel
Private sector practices
Prices and pricing
Defense cost control
Defense procurement
Logistics
Privatization
IDENTIFIER: DLA Industrial Prime Vendor Initiative
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Report to Congressional Committees
January 2000
DEFENSE INVENTORY
Opportunities Exist to Expand the Use of Defense Logistics Agency Best
Practices
*****************
*****************
GAO/NSIAD-00-30
Letter 3
Appendixes
Appendix I:Status and Sales Data for Defense Logistics Agency's Best
Practice Initiatives (as of August 1999)
22
Appendix II:Comments From the Department of Defense
27
Appendix III:GAO Contacts and Staff Acknowledgments
29
Related GAO Products
30
Table 1: DLA Hardware Inventory Characteristics13
Table 2: Implementation Obstacles and Techniques Applied
to Overcome Them 15
Figure 1: DLA Sales Covered by Best Practice Initiatives8
Figure 2: DOD Supply Functions Eliminated by Using Integrated
Suppliers 10
Figure 3: DLA Sales Covered by Best Practice Initiatives by Type
of Supply 12
DLA Defense Logistics Agency
DOD Department of Defense
In 1990, we began a special effort to review and report on the federal
program areas that we identified as high risk because of vulnerabilities
to waste, fraud, abuse, and mismanagement. This effort, which was
supported by the Senate Committee on Government Affairs and the House
Committee on Government Reform, brought a
Major Management Challenges and Program Risks: Department of Defense
National Security and
International Affairs Division
B-281461
January 26, 2000
Congressional Committees:
Section 347 of the Strom Thurmond National Defense Authorization Act for
Fiscal Year 1999 requires us to evaluate the extent to which the Defense
Logistics Agency has implemented best commercial inventory practice
initiatives contained in a schedule submitted to Congress on May 19, 1998.
The National Defense Authorization Act for Fiscal Year 1998 required that
the Agency develop and submit the schedule and that implementation of the
initiatives be completed by November 2000. A best commercial inventory
practice is defined in the 1998 act as a practice that enables the Agency
to reduce inventory levels and holding costs/Footnote1/ while improving
the responsiveness of the supply system to user needs.
Many of the initiatives in the schedule are long-term contracts in which
the Agency agrees to purchase items from a vendor for 1 or more years or
corporate contracts in which multiple requirements with the same vendor
are consolidated under one contract. These initiatives reduce or eliminate
processing individual purchase orders and leverage the Agency's buying
power to obtain lower prices. Other initiatives use techniques such as
prime vendors under which a portion of the inventory management
responsibilities are transferred to a single vendor, allowing military
customers to order supplies only as they are needed and receive supplies
on a timely basis. The schedule also includes electronic commerce
initiatives that enable Department of Defense customers to search for and
order supplies electronically.
We assessed the extent to which the Agency has implemented best commercial
practices included in the schedule. Specifically, we evaluated (1) the
Agency's progress in implementing the initiatives and
(2) opportunities to build on and expand existing efforts.
Results in Brief
The Defense Logistics Agency has made significant progress in implementing
the initiatives listed in the schedule. Of the 75 initiatives listed in
the schedule, 43 are considered by the Agency as completed and 15 have
been awarded contracts. Two initiatives were canceled, 1 was incorporated
into another initiative, and the remaining 14 were still in the contract
negotiation phase or had an otherwise uncertain status. Sales related to
these initiatives were estimated to be $2.2 billion, or about
27 percent of the Agency's projected fiscal year 1999 sales of secondary
inventory items,/Footnote2/ excluding fuels. Of this amount, over $1.8
billion of sales is associated with four initiatives that relate to
medical, pharmaceutical, and food items while almost $400 million is
associated with the remaining implemented initiatives. The most effective
initiatives to date have been the medical and food prime vendor
initiatives, which have transferred inventory management functions from
the Agency to key suppliers. These initiatives enabled the Agency to
reduce inventory levels and related costs and improve service to military
customers. Initiatives related to hardware and clothing items have had
only a limited impact on business operations, but recent initiatives may
provide a foundation for future improvements because they also transfer
inventory management functions to key suppliers.
The Agency is attempting to build on the success of its implemented
initiatives and expand the use of best practices, but significant
implementation obstacles must be overcome. Over 90 percent of the Agency's
estimated fiscal year 1999 sales of hardware items were not covered by the
initiatives in the schedule. To expand the use of best practices, the
Agency is developing a strategy that focuses on using commercial
distributors to support military customers for hardware items that are
used frequently and regularly and creating alternative methods for items
that are more unpredictable and difficult to support. In its efforts to
adopt best practices, the Agency and the military departments have faced a
variety of implementation issues. Many issues are related to concerns over
whether the new practices can adequately meet military supply needs and
how the new practices will affect employees' jobs. Though these obstacles
were overcome in some cases, they are significant because they can slow or
stop implementation efforts or deter the military departments' full
participation in the initiatives.
To build on the Agency's progress in implementing the initiatives and
encourage participation across the Department of Defense, we are
recommending that the Secretary of Defense direct the military departments
and the Defense Logistics Agency to develop a
Department-wide approach to promote the services' use of the Agency's
initiatives and resolve implementation obstacles.
Background
The Department of Defense (DOD) operates a worldwide supply system to buy,
store, and distribute inventory items. Through this system, DOD manages
4.3 million types of consumable items, of which about 4 million are
managed by the Defense Logistics Agency (DLA)./Footnote3/ About 3.8
million items that DLA manages are considered hardware items such as spare
parts, bolts, and fuses, many of which are needed to support weapon
systems and equipment, and the remaining items include a combination of
medical, pharmaceutical, food, clothing, and fuel items. Traditionally,
DLA buys consumable items in large quantities, stores them in distribution
depots until they are requested by the military services, and then ships
them to a service facility where they are used. Each year, DLA spends
billions of dollars to provide these services. According to fiscal year
1998 financial statements, DLA reported that its supply management costs,
which include inventory purchases, distribution, and material management,
totaled $12.7 billion, and inventory on hand was $9.8 billion, including
fuels. DLA's customers are primarily the military services.
Since 1990, we have identified DOD inventory management as a high-risk
area because levels of inventory were too high and management systems and
procedures were ineffective./Footnote4/ In addition, our financial
statement audits have identified continuing significant problems with the
integrity of DOD's inventory data. For example, we reported that
inaccurate inventory data resulted from weaknesses in DOD's procedures,
which are relied on to maintain visibility over, and conduct physical
counts of, on-hand inventories. Until these problems are effectively
resolved, DOD's ability to reliably measure and assess performance will
continue to be impaired. While DOD has made some improvements, these
general conditions still exist, and this area remains on our high-risk
list./Footnote5/ We have reported that adopting best business practices in
inventory management and improving the reliability of financial management
information are key steps toward solving these problems.
Congress has taken specific actions to encourage DOD to adopt best
commercial practices to improve inventory management. Collectively, the
defense authorization acts for fiscal years 1998 and 1999 have required
DLA and the services to develop and submit to Congress schedules for
implementing best commercial practices. The Department of Defense is
working to adopt best practices in its operations. Its performance plan
for fiscal year 2000 notes that the inventory supply system is larger than
required to support today's smaller force structure and outlined goals to
reduce inventory levels through improved business practices and streamline
infrastructure.
DLA Has Made Progress Adopting Best Practices
DLA has made significant progress in its efforts to adopt commercial best
practices for inventory management by implementing the initiatives
identified in the schedule provided to Congress. The Agency has
implemented or awarded contracts for a majority of the initiatives, and
sales related to these initiatives were estimated to be about $2.2
billion, or 27 percent of DLA's estimated fiscal year 1999 sales of $8
billion for secondary inventory items, excluding fuels. Though most of
DLA's progress implementing best practices relates to medical and food
items, it has also taken significant steps to improve the management of
clothing and hardware items.
DLA Has Made Progress Implementing the Schedule Initiatives
-----------------------------------------------------------
The Agency considers 43 of the 75 initiatives listed in the schedule as
completed and has awarded contracts for 15 others. Two other initiatives
were canceled, 1 was incorporated into another initiative, and the
remaining 14 initiatives were still in the contract negotiation phase or
had an otherwise uncertain status./Footnote6/ Because the contract
negotiation process is unpredictable and contract award dates often shift,
we could not determine whether implementation of the remaining 14
initiatives is likely to be completed by November 2000. Appendix I
summarizes the status of DLA's initiatives and the amount of sales the
initiatives produced in fiscal year 1998 and estimated for fiscal year 1999.
As shown in figure 1, DLA estimated that the implemented initiatives would
cover about $2.2 billion or 27 percent of fiscal year 1999 sales of
secondary inventory items, excluding fuels./Footnote7/ Of that amount,
over $1.8 billion of sales related to medical, pharmaceutical, and food
items that related to 4 initiatives, and the remaining 50 initiatives
accounted for nearly
$400 million in sales.
Figure****Helvetica:x11****1: DLA Sales Covered by Best Practice
Initiatives
*****************
*****************
Note: Estimated fiscal year 1999 sales.
Source: GAO analysis.
The prime vendor initiatives for pharmaceuticals and medical items were
implemented by DLA from 1993 through 1996. Under these initiatives, the
customer places orders with a prime vendor and most products are delivered
within 24 hours after receipt of an order. Therefore, DLA no longer has to
purchase, store, and distribute these items. According to DLA, these
initiatives have resulted in reductions in the number of items that are
stocked in its distribution depots, and wholesale medical inventory
reductions were estimated to be $177 million from fiscal year 1993 through
fiscal year 1997. Other savings realized at DOD hospitals include lower
stock levels, holding costs, and prices that DOD estimated saved
approximately $167 million in 1995 through 1996. Also, officials from Camp
Lejeune, North Carolina, and Lackland Air Force Base, Texas, told us that
by now relying on the medical and pharmaceutical prime vendors, they were
able to reduce on-hand inventories and warehouse storage space. They also
said they were pleased with the variety of the products available and the
timely delivery of orders.
DLA has successfully implemented two initiatives for food items. In one
initiative, the Agency contracted for prime vendors to distribute food
items to troop dining facilities within 48 hours of ordering. According to
officials at Camp Lejeune and Lackland Air Force Base, this initiative has
reduced or eliminated the need for DOD-owned dry and cold storage
facilities and associated inventories. Also, according to DLA, this
initiative has resulted in about a $39-million reduction in wholesale
inventories for these items from fiscal year 1995 through fiscal year 1997
and an estimated $78 million savings at customer locations during the same
time period. Under an initiative for fruits and vegetables, the vendor
provides full service distribution support for an assigned geographic area
and produce is usually shipped within 24 hours.
New Clothing and Hardware Initiatives Are Significant First Steps
------------------------------------------------------------------
DLA has made less progress implementing best practices for clothing and
hardware items, but initiatives begun in 1998 and 1999 provide a good
foundation for future improvements. Using the results and lessons learned
from an earlier prime vendor initiative for clothing items, DLA awarded a
contract in August 1999 for prime vendor support for about 2,500 customers
in the southeastern United States. Under this contract, DLA will negotiate
with suppliers to purchase uniform items at a discounted price, and the
prime vendor will distribute these items to military customers within 1 to
4 days. This approach will transfer all inventory distribution
responsibilities from DLA to a prime vendor.
The Industrial Prime Vendor initiative is designed to improve the
management of hardware items weapon system maintenance activities use and
is being tested at six Navy and Marine Corps locations and at Army, Navy
and Air Force locations in Okinawa, Japan. The first contract was awarded
for the Naval Aviation Depot North Island, San Diego, California, in 1998.
Through this initiative, DLA contracts with a prime vendor to perform
inventory management functions, such as ordering items as they are needed
and replenishing item bins in the maintenance facility, for selected items
that the services need to repair various weapon systems. The vendor places
its personnel within the DOD maintenance facility to perform all of the
required functions, and it can purchase inventory from a variety of supply
sources, including DLA. Transferring inventory management responsibilities
to a supplier operating within the customer's facility integrates the
supplier into the customer's business operations. The prime vendor
approach could eliminate parts of DOD's traditional supply process at a
DOD repair facility, as shown in figure 2.
Figure****Helvetica:x11****2: DOD Supply Functions Eliminated by Using
Integrated Suppliers
*****************
*****************
Source: GAO analysis of DOD and private sector practices.
Under the Industrial Prime Vendor initiative, the vendor is contractually
required to meet 100 percent of customer needs and deliver items within
24 hours of receiving an order to fill an empty bin, which will eliminate
back orders for items that have been unavailable-at a reduced total cost
to the government. For example, at Camp Lejeune and Camp Pendleton, the
prime vendor is expected to increase availability of about 1,500 items
from 70 percent to 100 percent of the time and improve the order-ship time
from 30 days to 1 day. In addition, DLA estimates that its inventory could
be reduced by at least $98 million after implementing the initiative at
the initial test sites.
Also, the prime vendor approach has been well received by the military
customers. For example, an official at the Naval Aviation Depot, Cherry
Point, North Carolina, said that the industrial prime vendor approach
encourages a partnership in which a repair depot works directly with the
vendor to ensure that it understands and meets the depot's supply
requirements. By providing on-site assistance and support, the vendor can
react sooner to potential supply problems than the customer can using the
traditional process. This official believes that the vendor can help the
Cherry Point depot reduce its inventory levels and obtain items currently
on back order.
Opportunities and Obstacles Exist to Expanding Best Practices
DLA has a significant opportunity to build on and expand the success of
its implemented initiatives and expand best practices, especially to
improve the management of hardware items, but some implementation
obstacles must be overcome. Over 90 percent of the sales for hardware and
clothing items are not covered by the initiatives in the schedule. To
expand the use of best practices, DLA is developing a strategy that
focuses on using commercial distributors to support military customers for
hardware items that are used frequently and regularly and creating
alternative methods for items that are more unpredictable and difficult to
support. As it expands best practices, DLA will continue to face obstacles
that have limited the services' participation in some initiatives and that
require a
Department-wide approach to overcome. These obstacles include the
customer's lack of confidence in the new practices and the need for
various DOD organizations to work together to implement each initiative.
Hardware and Clothing Initiatives Cover a Small Portion of Sales
----------------------------------------------------------------
Although hardware items represented 3.8 million of the 4 million items DLA
manages and about 57 percent of the Agency's sales, as shown in figure 3,
schedule initiatives covered only 8 percent of the estimated $4.7 billion
hardware sales for fiscal year 1999. In addition, clothing initiatives
covered only 2 percent ($22 million) of the estimated $1.1 billion fiscal
year 1999 sales of those items.
Figure****Helvetica:x11****3: DLA Sales Covered by Best Practice
Initiatives by Type of Supply
*****************
*****************
Note: Sales data do not include sales through DLA's electronic commerce
mall (Emall).
Source: GAO analysis.
Strategy to Expand Best Practices
---------------------------------
DLA is developing a strategy to expand best practices for hardware items
that initially focuses on items that are used frequently by military
customers. These items are more easily adapted to commercial distribution
networks that provide goods and services to private sector companies and
represent the majority of DLA's business operations related to hardware
items. As shown in table 1, frequently used items represent 7 percent of
the hardware items managed, but 73 percent of DLA's annual hardware sales.
Table****Helvetica:x11****1: DLA Hardware Inventory Characteristics
-------------------------------------------------------------------------
| Frequency of item : Number of : Perce : Annual : Perce : Invent |
| use : inventory : nt : salesb : nt : ory |
| : items : : (thousand : : valuec |
| : : : s) : : |
| : : : : : (billi |
| : : : : : ons) |
|-----------------------------------------------------------------------|
| Frequent customer : 264,000 : 7 : $3,239,000: 73 : $1.6 |
| demands : : : : : |
|-----------------------------------------------------------------------|
| Infrequent : 3,343,000 : 87 : 910,000 : 21 : 4.1 |
| customer demandsa : : : : : |
|-----------------------------------------------------------------------|
| Overstocked (no : 166,000 : 4 : 283,000 : 6 : 2.1 |
| anticipated DLA : : : : : |
| purchases) : : : : : |
|-----------------------------------------------------------------------|
| No anticipated : 68,000 : 2 : 0 : 0 : 0.2 |
| customer demands : : : : : |
|-----------------------------------------------------------------------|
| Total : 3,841,000 : 100 : $4,432,000: 100 : $8.0 |
-------------------------------------------------------------------------
aNonstocked items are included in the number of inventory items and annual
sales for infrequent customer demands.
bSales figures based on fiscal year 1998 data include back ordered items
that may not be actually paid for in the same year that they are ordered.
Therefore, cited fiscal year 1999 sales data for hardware items in other
areas of the report are not comparable to these figures.
cInventory valued at latest acquisition cost as of January 13, 1999.
Source: Defense Logistics Agency.
For hardware items that are infrequently requested, such as aircraft parts
not expected to fail through normal usage, DLA faces a more difficult
challenge when adopting best practices. In many cases, these items are
unique to the military, and commercial distribution networks do not exist
to support these military requirements. Therefore, DLA stocks many of
these items for an extended period of time because the services have
indicated the items are mission-critical and may be needed in the future.
Currently, DLA holds inventory valued at $4.1 billion to meet these
requirements.
For these more difficult to manage items, DLA initiated a strategy in
fiscal year 1998 that involves working with customers, manufacturers, and
distributors to create new supply networks. As a part of this strategy,
DLA is grouping items that have common manufacturing characteristics, such
as hydraulics and mechanical systems, to streamline the production of
these items and attract manufacturers and suppliers that can develop a
support system similar to established commercial distribution networks. In
other cases, DLA plans to group frequently and infrequently requested
items, and contract with a vendor to support both. Some items, however,
may not be suitable for commercial support and DLA will continue to buy
and store such items to meet military requirements.
As discussed earlier, DLA is testing a prime vendor initiative for
clothing items in the southeastern United States that if successful, may
be expanded nationwide. In this regional test, which covers 12 states, DLA
has identified about 2,500 customer locations and annual clothing sales of
approximately $160 million. In fiscal year 1999, DLA expected this
initiative would cover about $10 million of these sales. DLA plans to
expand this initiative to additional states within 12 months of the
initial award. According to DLA officials, when fully implemented, this
initiative could cover about
$465 million of DLA's annual sales for clothing items.
As part of its strategy to expand best practices, DLA is also taking
actions to more effectively manage initiative implementation. For example,
DLA is identifying performance measures the private sector uses that may
be applicable to DLA operations. Also, the Agency is defining more
specific milestones to complete implementation of the initiatives. DLA did
not specify when these measures and milestones would be established.
Lessons Learned From Implementing Best Practices
-------------------------------------------------
From our discussions with DLA and military officials and our review of
documents related to implementing the initiatives, we identified more than
100 citations of obstacles involving various DOD organizations that
canceled, delayed, or could have delayed, initiative implementation. From
these citations, we identified seven obstacles that repeatedly surfaced
and examples of techniques DLA and the services used to overcome them (see
table 2).
Table****Helvetica:x11****2: Implementation Obstacles and Techniques
Applied to Overcome Them
------------------------------------------------------------------------
| Obstacle : Technique applied |
|----------------------------------------------------------------------|
| Customers lack confidence in a : Assured customers that DLA |
| new process to meet their : maintains enough supplies for |
| supply needs. : worldwide support to support |
| : the customer's needs if the new |
| : process fails. |
|----------------------------------------------------------------------|
| Customers focus on item price : Conducted baseline studies of |
| rather than the total cost of : the total cost of delivering |
| the supply system. : inventory under the current |
| : system at specific locations |
| : and used this to compare to the |
| : total cost of the new system. |
|----------------------------------------------------------------------|
| Employees fear job loss. : Reassigned displaced employees |
| : to other parts of the |
| : organization. |
|----------------------------------------------------------------------|
| Changing a DOD business : Developed an effective working |
| practice requires the : relationship between each |
| participation of different : organization. |
| services, DLA and the private : |
| sector. : |
|----------------------------------------------------------------------|
| DOD information systems do not : Negotiated with vendors for a |
| always produce accurate data on : phase-in period where accurate |
| item use. : usage data can be accumulated. |
|----------------------------------------------------------------------|
| Commercial distribution : Encouraged new alliances |
| networks cannot always support : between manufacturers and |
| DOD's needs. : distributors. |
|----------------------------------------------------------------------|
| Vendors resist accepting new : Negotiated with vendors to |
| risks. : share the risks associated with |
| : the new business practices. |
------------------------------------------------------------------------
Though DLA and the services were able to overcome these obstacles in some
cases, the obstacles are significant because they can slow or stop DLA's
implementation efforts. For example, in 1998, DLA attempted to implement a
prime vendor program for avionics equipment that never progressed beyond
the contract negotiation phase. According to DLA officials, this
initiative failed because the Air Force customer and the potential prime
vendor did not agree to the scope of services the vendor would provide.
Another prime vendor initiative to support the M9 Armored Combat
Earthmover was delayed, and a contract award is uncertain due to concerns
raised during contract negotiations over item prices and the scope of the
vendor's responsibilities.
According to DLA officials, concerns over item price increases are major
obstacles when best practices are first introduced to potential military
customers. In some cases, using a best practice may increase the unit
price of an item, but this increase can be offset by a larger, but less
visible, reduction in total DOD costs, better product quality, and
improved customer service such as a greater availability of parts and
faster delivery.
This shift from a unit price to a "best value" focus is difficult to
accomplish. One DLA approach has been to conduct baseline cost comparisons
at specific implementation sites to demonstrate to the customer how the
cost under the new process is lower than the total cost under the
traditional supply system. However, it may be difficult, if not
impossible, to develop similar baseline cost comparisons on a broader
scale because of significant weaknesses in the reliability of reported DOD
inventory data and cost information./Footnote8/
Another obstacle is the need for various DOD organizations to work
together to implement each initiative. Once DLA awards a contract for an
initiative, the services decide the extent to which each installation will
use the initiative in its operations. For example, DLA has awarded
contracts nationwide for prime vendors to provide military customers and
other organizations with items to support facilities maintenance. As of
October 1999, however, only 110 of 278 potential customers identified by
DLA were actually using the prime vendor. DLA officials stated that using
outcome measures illustrating Department-wide benefits of best practices
is a technique that may encourage the services to more actively
participate in this and other initiatives.
DLA's efforts to implement the Industrial Prime Vendor initiative provide
an example of how these obstacles arose and the techniques DLA used to
overcome them. DLA and service officials emphasized that the basic
foundation to their success was developing an effective working
relationship among the vendor, military customers, and DLA. Achieving this
success was difficult, requiring detailed negotiations with the customers,
vendors, and suppliers. The obstacles encountered and techniques applied
to overcome them included:
o Employees at maintenance facilities believed the initiative would
replace their jobs but instead employees affected by the initiative
were reassigned to work in other locations or hired by the prime vendor.
o Some military service officials were concerned that if the prime
vendor could not provide support and DLA would no longer supply the
items then they would be worse off. DLA assured its customers that the
stock it maintains for worldwide support would be sufficient to satisfy
customer demands if the prime vendor contracts failed or were terminated.
o According to officials representing the prime vendor, one of the
biggest obstacles was getting the numerous suppliers of the wide range
of items covered by the contract to work with an integrated supplier.
Some suppliers were concerned about providing pricing data and other
information to another supplier who could be a competitor. In this
case, the prime vendor had to develop partnership relationships with
multiple suppliers. Other prime vendor concerns were about meeting
tough military requirements and having to hold inventory to make sure
the parts were available. Instead of just passing on inventory risk to
the supplier, DLA developed a shared risk approach in which it would
buy back a portion of the investment in inventory if the prime vendor
contract was canceled by the government.
o To address customer concerns over potential increased prices or
costs, DLA conducted baseline studies at each implementation site to
demonstrate to the customer how total costs would be lowered using the
prime vendor approach.
o To ensure that the prime vendor has accurate data to support the
customer's requirements, the contract allows for a 2-year base period
that will provide sufficient time for the contractor to collect and
validate item usage data.
Conclusions
The Defense Logistics Agency has made significant progress implementing
the best practice initiatives contained in the schedule, but opportunities
exist to expand these efforts. Recognizing this opportunity, the Agency is
taking steps to develop a strategy to expand the use of best practices for
hardware items, which, if successful, could lead to further supply system
improvements and cost reductions. Department-wide obstacles that can
prevent and have prevented full implementation of the initiatives include
a lack of confidence in the new practices and a focus on item price
instead of the total cost of operations. Until these obstacles are
resolved and the services maximize their participation in each of the
initiatives, supply system improvements and cost reduction opportunities
will be lost.
Recommendations
To build on and expand the Agency's efforts to adopt best practices, we
recommend that the Secretary of Defense direct the Director, Defense
Logistics Agency, and the secretary of each military department to develop
a Department-wide approach to address implementation obstacles and promote
the active support and participation by each service in the Agency's
initiatives. This approach should include providing a forum for
(1) highlighting the benefits of participating in the initiatives,
(2) determining appropriate outcome measures for assessing DOD-wide
progress and results, and (3) resolving obstacles and sharing lessons
learned from implementing best practices.
Agency Comments and Our Evaluation
In commenting on a draft of this report, DOD concurred with our
recommendation and stated it will utilize the Logistics Reform Senior
Steering Group as the forum to address obstacles to implementing DLA best
practice initiatives. According to DOD, this group will promote
participation by DOD activities in those initiatives to the extent they
provide the combination of quality, timeliness, and cost that best meet
DOD's requirements. The group will also highlight the benefits of
participating in the initiatives, consider appropriate outcome measures,
and share lessons learned. DOD further stated that DLA will take the lead
in presenting these issues to the group and that completion is expected by
September 2000. DOD's comments are included in their entirety as appendix
II.
Scope and Methodology
To assess DLA's progress in implementing best practices and to obtain
detailed information about initiatives listed in the schedule submitted to
Congress in 1998, we met with DLA officials from the Defense Supply
Center, Columbus, Ohio; Defense Supply Center, Richmond, Virginia; and
Defense Industrial Supply Center and Defense Supply Center, Philadelphia,
Pennsylvania. Specifically, we obtained and analyzed information from
these organizations on (1) the status of implementation, (2) the number of
items and level of sales covered by the initiatives to assess the extent
to which the initiatives cover DLA's business operations, and (3) the
effects the initiatives had on DOD's supply system if data was available.
We did not verify the accuracy of the inventory and sales data provided by
DLA officials.
To determine the status of the initiatives under the fuel supply category,
we talked with an official from the Defense Energy Support Center, Fort
Belvoir,Virginia. We did not collect or analyze data on the fuel
initiatives because they covered energy management issues rather than the
management of secondary inventory items.
To assess DLA's progress in implementing the initiatives and their effects
on supply operations at military installations, we asked DLA officials to
identify locations where initiatives were being implemented and then
selected locations where the initiatives were more likely to change the
customers' operations. We also chose sites that had experience with more
mature initiatives, such as the medical prime vendor. As a result of these
criteria, we examined installations under the Navy and the Marine Corps
because they were the first implementation sites for the Industrial Prime
Vendor initiative, a key initiative for hardware items and were also
locations for mature initiatives, including medical and food prime
vendors. We met with logistics personnel and end users involved with the
initiatives at their installation. When possible, we also met with vendor
representatives of these initiatives. We met with officials at Naval
Aviation Depot North Island, San Diego, California; Explosive Ordnance
Disposal Unit One, San Diego, California; Camp Lejeune Marine Corps Base,
Jacksonville, North Carolina; and Naval Aviation Depot, Cherry Point,
North Carolina. For additional information on the implementation progress
of DLA's initiatives, we relied on information collected in May 1998 at
Lackland Air Force Base, Texas. Collected information discussed the supply
operations, customer satisfaction, the techniques used for implementing
best practices at their facilities, and lessons learned from their
experiences with DLA's best practices. We did not verify the accuracy of
logistics costs and performance data provided by installation officials.
To obtain information on opportunities to expand best practices, we
interviewed officials at DLA Headquarters, Fort Belvoir, Virginia, on
DLA's strategy for implementing best practices and any other efforts DLA
officials had taken to increase and improve the implementation of best
practices. Specifically, we collected information on how DLA selected
candidate items for future best practice efforts and assessed the
appropriateness and implications of that approach. We also obtained
information on implementation experiences and lessons learned from
implementing best practices from each of the supply centers and military
installations cited above. From interviews and documents, we identified
common implementation obstacles and examples of how those obstacles were
overcome by DLA and the services.
We conducted our review from November 1998 through August 1999 in
accordance with generally accepted government auditing standards.
We are sending copies of this report to the appropriate congressional
committees; the Honorable William Cohen, Secretary of Defense; the
Honorable Louis Caldera, Secretary of the Army; the Honorable Richard
Danzig, Secretary of the Navy; the Honorable F. Whitten Peters, Secretary
of the Air Force; Lieutenant General Henry T. Glisson, Director, Defense
Logistics Agency; and the Honorable Jacob Lew, Director, Office of
Management and Budget. We will also make copies available to others upon
request.
Please contact me on (202) 512-8412 if you or your staff have any
questions concerning this report. Key contributors are listed in appendix
III.
*****************
*****************
David R. Warren, Director
Defense Management Issues
List of Congressional Committees
The Honorable John Warner
Chairman
The Honorable Carl Levin
Ranking Minority Member
Committee on Armed Services
United States Senate
The Honorable Ted Stevens
Chairman
The Honorable Daniel K. Inouye
Ranking Minority Member
Subcommittee on Defense
Committee on Appropriations
United States Senate
The Honorable Floyd Spence
Chairman
The Honorable Ike Skelton
Ranking Minority Member
Committee on Armed Services
House of Representatives
The Honorable Jerry Lewis
Chairman
The Honorable John P. Murtha
Ranking Minority Member
Subcommittee on Defense
Committee on Appropriations
House of Representatives
--------------------------------------
/Footnote1/-^ Holding costs include the cost of having funds tied up in
inventory, the cost of storing items, material obsolescence cost, and
inventory losses.
/Footnote2/-^ Secondary inventory includes reparable components,
subsystems, and assemblies; consumable repair parts; bulk items and
material; food; and expendable end items, including clothing and other
personal gear.
/Footnote3/-^ Consumable items are discarded after use rather than repaired.
/Footnote4/-^much-needed focus to problems that were costing the
government billions of dollars.
/Footnote5/-^(GAO/OCG-99-4, Jan. 1999).
/Footnote6/-^Initiative status is as of August 1999, which was the most
current information available at the time of our review.
/Footnote7/-^We did not collect or analyze data on the fuel initiatives
because they covered energy management issues rather than the management
of secondary inventory items.
/Footnote8/-^DOD Financial Management: More Reliable Information Key to
Assuring Accountability and Managing Defense Operations More Efficiently
(GAO/T-AIMD/NSIAD-99-145, Apr. 14, 1999).
STATUS AND SALES DATA FOR DEFENSE LOGISTICS AGENCY'S BEST PRACTICE
INITIATIVES
(AS OF AUGUST 1999)
===================
Continued from Previous Page
---------------------------------------------------------------------------
| Dollars : : : : : |
| in : : : : : |
| thousands: : : : : |
|-------------------------------------------------------------------------|
| Type of : Initiative : Type : Status : Fiscal : Estima |
| supply : : of : : year : ted |
| : : init : : 1998 : |
| : : iati : : sales : fiscal |
| : : ve : : : year |
| : : : : : 1999 |
| : : : : : sales |
|-------------------------------------------------------------------------|
| Medical : Pharmaceutical prime : PV : Contract : $773,7 : $800,0 |
| and : vendor : : awarded - : 00 : 00 |
| : : : complete : : |
| pharmace : : : : : |
| utical : : : : : |
|-------------------------------------------------------------------------|
| : Medical/surgical : PV : Contract : 96,100 : 115,000 |
| : prime vendor : : awarded - : : |
| : : : complete : : |
|-------------------------------------------------------------------------|
| : National mail order : C : Contract : 28,400 : 70,000 |
| : pharmacy : : awarded - : : |
| : : : complete : : |
|-------------------------------------------------------------------------|
| : National : C : Contract : : |
| : pharmaceutical : : awarded - : : |
| : wholesaler : : complete : : |
| : (contractor : : : : |
| : supporting National : : : : |
| : mail order pharmacy)a : : : : |
|-------------------------------------------------------------------------|
| : National retail : C : Uncertain : b : b |
| : pharmacy network : : : : |
|-------------------------------------------------------------------------|
| : Dental electronic : EC : Contract : b : 2,500 |
| : catalog : : awarded - : : |
| : : : in process : : |
|-------------------------------------------------------------------------|
| : Optical electronic : EC : Contract : b : 500 |
| : catalog : : awarded - : : |
| : : : in process : : |
|-------------------------------------------------------------------------|
| : Laboratory : EC : Contract : b : 1,000 |
| : integrated delivery : : awarded - : : |
| : system : : in process : : |
|-------------------------------------------------------------------------|
| : Subtotal : : : $898,2 : $989,0 |
| : : : : 00 : 00 |
|-------------------------------------------------------------------------|
| Subsiste : Subsistence prime : PV : Contract : 410,000: 599,000 |
| nce : vendor : : awarded - : : |
| (food) : : : complete : : |
|-------------------------------------------------------------------------|
| : Ultrahigh : C : Contract : b : 3,800 |
| : temperature milk : : awarded - : : |
| : long term contract : : complete : : |
|-------------------------------------------------------------------------|
| : Unitized group : C : Contract : 4,900 : 15,400 |
| : rations - A : : awarded - : : |
| : : : complete : : |
|-------------------------------------------------------------------------|
| : Direct market : BPA : Contract : 340,000: 340,000 |
| : logistics : : awarded - : : |
| : : : complete : : |
|-------------------------------------------------------------------------|
| : Controlled : BPA : Contract : 40,000 : 40,000 |
| : atmosphere : : awarded - : : |
| : refrigerated transport: : complete : : |
|-------------------------------------------------------------------------|
| : Food service : PV : Contract : b : 2,000 |
| : equipment prime vendor: : awarded - : : |
| : : : complete : : |
|-------------------------------------------------------------------------|
| : Subtotal : : : $794,9 : $1,000 |
| : : : : 00 : ,200 |
|-------------------------------------------------------------------------|
| Clothing : Clothing and : PV : Contract : 16,600 : 12,000 |
| and : textiles prime vendor : : awarded - : : |
| textiles : : : complete : : |
|-------------------------------------------------------------------------|
| : Virtual prime vendor : VPV : Contract : b : 10,000 |
| : - uniforms : : awarded - : : |
| : : : in process : : |
|-------------------------------------------------------------------------|
| : Subtotal : : : $16,600: $22,000 |
|-------------------------------------------------------------------------|
| Commerci : Support method for : VPV : Canceled : b : b |
| ally : avionics/electronics : : : : |
| availabl : : : : : |
| e : : : : : |
| electron : : : : : |
| ics : : : : : |
|-------------------------------------------------------------------------|
| : Subtotal : : : b : b |
|-------------------------------------------------------------------------|
| Construc : Wood products prime : PV : Contract : 1,080 : 9,500 |
| tion : vendor : : awarded - : : |
| : : : in process : : |
|-------------------------------------------------------------------------|
| : Subtotal : : : $1,080 : $9,500 |
|-------------------------------------------------------------------------|
| Industri : C-130 virtual prime : VPV : Contract : 20,500 : 22,000 |
| al : vendor : : awarded - : : |
| : : : complete : : |
|-------------------------------------------------------------------------|
| : Industrial prime : PV : Contract : 1,500 : 28,500 |
| : vendor : : awarded - : : |
| : : : in process : : |
|-------------------------------------------------------------------------|
| : Subtotal : : : $22,000: $50,500 |
|-------------------------------------------------------------------------|
| Automoti : Automotive corporate : C : Contract : 17,809: 17,809 |
| ve : contracts : : awarded - : : |
| : : : complete : : |
|-------------------------------------------------------------------------|
| : Meritor heavy : C : Contract : 1,412 : 1,604 |
| : vehicle systems : : awarded - : : |
| : corporate contract : : complete : : |
|-------------------------------------------------------------------------|
| : Circle seal : C : Precontrac : b : b |
| : corporate contract : : t award : : |
|-------------------------------------------------------------------------|
| : Automotive prime : PV : Contract : b : 2,800 |
| : vendor overseas : : awarded - : : |
| : : : complete : : |
|-------------------------------------------------------------------------|
| : Fleet automotive : VPV : Precontrac : b : b |
| : support initiative : : t award : : |
|-------------------------------------------------------------------------|
| : Subtotal : : : $19,221: $22,213 |
|-------------------------------------------------------------------------|
| Fuelsc : Regional : D : Demonstrat : c : c |
| : demonstration of : : ion : : |
| : total energy : : complete : : |
| : management : : : : |
|-------------------------------------------------------------------------|
| : Energy savings : D : Demonstrat : c : c |
| : performance : : ion : : |
| : contracting : : complete : : |
| : demonstration : : : : |
|-------------------------------------------------------------------------|
| : California : D : Demonstrat : c : c |
| : centralized : : ion : : |
| : electricity : : complete : : |
| : procurement : : : : |
| : demonstration : : : : |
|-------------------------------------------------------------------------|
| : Privatization of : D : Demonstrat : c : c |
| : utility : : ion ongoing: : |
| : infrastructure : : : : |
| : demonstration : : : : |
|-------------------------------------------------------------------------|
| : Subtotal : : : c : c |
|-------------------------------------------------------------------------|
| Faciliti : Maintenance repair : PV : Contract : 7,492 : 42,670 |
| es : operations prime : : awarded - : : |
| maintena : vendor : : in process : : |
| nce : : : : : |
|-------------------------------------------------------------------------|
| : Subtotal : : : $7,492 : $42,670 |
|-------------------------------------------------------------------------|
| Aviation : Grimes Aerospace : C : Contract : 60,800 : 4,700 |
| : corporate contract : : awarded - : : |
| : : : complete : : |
|-------------------------------------------------------------------------|
| : Bell Helicopter : C : Contract : 10,207 : 17,955 |
| : Textron corporate : : awarded - : : |
| : contract : : complete : : |
|-------------------------------------------------------------------------|
| : Boeing Helicopter : C : Contract : 2,432 : 4,373 |
| : corporate contract : : awarded - : : |
| : : : complete : : |
|-------------------------------------------------------------------------|
| : Boeing Seattle : C : Contract : 158 : 325 |
| : corporate contract : : awarded - : : |
| : : : complete : : |
|-------------------------------------------------------------------------|
| : McDonnell Douglas : C : Contract : 1,819 : 2,600 |
| : Aircraft corporate : : awarded - : : |
| : contract : : complete : : |
|-------------------------------------------------------------------------|
| : C-5 logistics support : VPV : Precontrac : b : b |
| : : : t award : : |
|-------------------------------------------------------------------------|
| : C-141 spoiler contract: C : Contract : b : 1,614 |
| : : : awarded - : : |
| : : : complete : : |
|-------------------------------------------------------------------------|
| : F-15 fuel tank long- : C : Incorporat : : |
| : term contract : : ed into : : |
| : : : McDonnell : : |
| : : : Douglas : : |
| : : : corporate : : |
| : : : contract : : |
|-------------------------------------------------------------------------|
| : Aircraft surface : C : Contract : 37 : 88 |
| : cleaning compound : : awarded - : : |
| : long-term contract : : complete : : |
|-------------------------------------------------------------------------|
| : Virtual prime vendor : VPV : Precontrac : b : b |
| : for program depot : : t award : : |
| : maintenance : : : : |
|-------------------------------------------------------------------------|
| : KC135 service life : C : Contract : 228 : 1,707 |
| : extension program : : awarded - : : |
| : : : complete : : |
|-------------------------------------------------------------------------|
| : F/A18 top degrader : C : Contract : 889 : 613 |
| : long-term contract : : awarded - : : |
| : : : complete : : |
|-------------------------------------------------------------------------|
| : Aerospace : C : Contract : b : 1,902 |
| : applications : : awarded - : : |
| : corporate contracts : : in process : : |
|-------------------------------------------------------------------------|
| : Western Design : C : Contract : b : 3,710 |
| : Howden corporate : : awarded - : : |
| : contract : : complete : : |
|-------------------------------------------------------------------------|
| : GE F110 engine parts : C : Contract : b : 321 |
| : corporate contract : : awarded - : : |
| : : : in process : : |
|-------------------------------------------------------------------------|
| : Subtotal : : : $76,570: $39,908 |
|-------------------------------------------------------------------------|
| Batteries: Battery long-term : C : Contract : 8,756 : 7,827 |
| : contracts : : awarded - : : |
| : : : complete : : |
|-------------------------------------------------------------------------|
| : Eastern Carolina : C : Contract : 187 : 173 |
| : Vocational Center : : awarded - : : |
| : : : complete : : |
|-------------------------------------------------------------------------|
| : Vehicular battery : C : Contract : 9,700 : 10,000 |
| : consignment program : : awarded - : : |
| : : : complete : : |
|-------------------------------------------------------------------------|
| : Subtotal : : : $18,643: $18,000 |
|-------------------------------------------------------------------------|
| Electron : DLA electronic : EC : Contract : 335 : 747 |
| ic : commerce mall (Emall) : : awarded - : : |
| commerce : : : in process : : |
|-------------------------------------------------------------------------|
| : Electronic catalog : EC : Contract : 263 : Unable |
| : contracts : : awarded - : : to |
| : : : in process : : foreca |
| : : : : : st |
|-------------------------------------------------------------------------|
| : Subtotal : : : $598 : $747 |
|-------------------------------------------------------------------------|
| Material : Material handling : PV : Precontrac : b : b |
| : equipment initiative : : t award : : |
| handling : : : : : |
| : : : : : |
| equipmen : : : : : |
| t : : : : : |
|-------------------------------------------------------------------------|
| : Global mobility : PV : Precontrac : b : 50 |
| : material handling : : t award : : |
| : equipment : : : : |
|-------------------------------------------------------------------------|
| : Subtotal : : : b : $50 |
|-------------------------------------------------------------------------|
| Land- : M9 armored combat : VPV : Award : b : b |
| based : earthmover virtual : : uncertain : : |
| systems : prime vendor : : : : |
|-------------------------------------------------------------------------|
| : M939 five-ton truck : VPV : Canceled : b : b |
| : virtual prime vendor : : : : |
|-------------------------------------------------------------------------|
| : Grove North America : C : Contract : b : 913 |
| : corporate contract : : awarded - : : |
| : : : complete : : |
|-------------------------------------------------------------------------|
| : Subtotal : : : b : $913 |
|-------------------------------------------------------------------------|
| Maritime : Warren Pump : C : Precontrac : b : b |
| systems : corporate contract : : t award : : |
| : (composite material : : : : |
| : pumps) : : : : |
|-------------------------------------------------------------------------|
| : Warren Pump : C : Precontrac : b : b |
| : corporate contract : : t award : : |
| : (metallic pumps) : : : : |
|-------------------------------------------------------------------------|
| : J.A. Moody corporate : C : Contract : 1,221 : 1,221 |
| : contract : : awarded - : : |
| : : : complete : : |
|-------------------------------------------------------------------------|
| : Milwaukee Valve : C : Contract : b : 1,798 |
| : corporate contract : : awarded - : : |
| : : : complete : : |
|-------------------------------------------------------------------------|
| : Air Dry Corporation : C : Precontrac : b : 90 |
| : of America : : t award : : |
|-------------------------------------------------------------------------|
| : Dante Valve Company : C : Contract : b : 125 |
| : : : awarded - : : |
| : : : complete : : |
|-------------------------------------------------------------------------|
| : Subtotal : : : $1,221 : $3,234 |
|-------------------------------------------------------------------------|
| Other : Closed loop re- : C : Contract : 30 : 588 |
| initiati : refined oil program : : awarded - : : |
| ves : : : complete : : |
|-------------------------------------------------------------------------|
| : Industrial gases : PV : Contract : 396 : 350 |
| : : : awarded - : : |
| : : : complete : : |
|-------------------------------------------------------------------------|
| : Lubricating oils : C : Contract : 5,545 : 8,481 |
| : long-term contracts : : awarded - : : |
| : : : complete : : |
|-------------------------------------------------------------------------|
| : Fire-fighting : PV : Contract : b : 1,400 |
| : equipment logistics : : awarded - : : |
| : support : : in process : : |
|-------------------------------------------------------------------------|
| : Marine lifesaving : PV : Contract : b : 1,013 |
| : and diving equipment : : awarded - : : |
| : logistics support : : in process : : |
|-------------------------------------------------------------------------|
| : Photographic : C : Contract : 10,000 : 8,040 |
| : industry contracts : : awarded - : : |
| : : : complete : : |
|-------------------------------------------------------------------------|
| : Modern burner unit : C : Contract : b : 12,100 |
| : : : awarded - : : |
| : : : complete : : |
|-------------------------------------------------------------------------|
| : Rekeyable lock project: C : Contract : b : 6 |
| : : : awarded - : : |
| : : : complete : : |
|-------------------------------------------------------------------------|
| : Regional integrated : PV : Contract : 1,200 : 5,700 |
| : suppliers for : : awarded - : : |
| : metals, metal : : complete : : |
| : products, and services: : : : |
|-------------------------------------------------------------------------|
| : Aqua Chem corporate : C : Contract : b : 2,340 |
| : contract : : awarded - : : |
| : : : complete : : |
|-------------------------------------------------------------------------|
| : Filter elements : C : Contract : b : 8,730 |
| : corporate contracts : : awarded - : : |
| : : : in process : : |
|-------------------------------------------------------------------------|
| : Blackmer Pump : C : Precontrac : b : b |
| : corporate contract : : t award : : |
|-------------------------------------------------------------------------|
| : Components for : C : Precontrac : b : b |
| : diesel engines : : t award : : |
| : corporate contract : : : : |
|-------------------------------------------------------------------------|
| : Gears, gear boxes, : C : Precontrac : b : b |
| : and repair kits : : t award : : |
| : corporate contracts : : : : |
|-------------------------------------------------------------------------|
| : Subtotal : : : $17,171: $48,748 |
|-------------------------------------------------------------------------|
| All : Total : : : $1,873 : $2,247 |
| supply : : : : ,696 : ,683 |
| types : : : : : |
---------------------------------------------------------------------------
Legend
PV = Prime vendor
C = Contract
EC = Electronic commerce
BPA= Blanket purchase agreement
VPV= Virtual prime vendor
D = Demonstration
aSales data for the national pharmaceutical wholesaler are included in the
sales data for the national mail order pharmacy.
bNot applicable, either because there is no contract in place or the
contract was awarded too recently for it to have generated any sales in
fiscal year 1998.
cWhile the original schedule listed four energy demonstrations, studying
them was not within our scope of the review.
COMMENTS FROM THE DEPARTMENT OF DEFENSE
=======================================
*****************
*****************
*****************
*****************
GAO CONTACTS AND STAFF ACKNOWLEDGMENTS
======================================
GAO Contacts
Charles Patton (202) 512-4412
Robert Repasky (202) 512-9868
Acknowledgments
In addition to those named above, Kay Kuhlman, Nancy Lively, Tracy
Whitaker, Lindsay Musser, and Bill Woods made key contributions to this
report.
RELATED GAO PRODUCTS
====================
Inventory Management: More Information Needed to Assess DLA's Best
Practice Initiatives (GAO/NSIAD-98-218, Sept. 2, 1998).
Inventory Management: DOD Can Build on Progress by Using Best Practices
for Reparable Parts (GAO/NSIAD-98-97, Feb. 27, 1998).
Defense Inventory Management: Expanding Use of Best Practices for Hardware
Items Can Reduce Logistics Costs (GAO/NSIAD-98-47,
Jan. 20, 1998).
Inventory Management: Greater Use of Best Practices Could Reduce DOD's
Logistics Costs (GAO/T-NSIAD-97-214, July 24, 1997).
Inventory Management: The Army Could Reduce Logistics Costs for Aviation
Parts by Adopting Best Practices (GAO/NSIAD-97-82, Apr.15, 1997).
Inventory Management: Adopting Best Practices Could Enhance Navy Efforts
to Achieve Efficiencies and Savings (GAO/NSIAD-96-156, July 12, 1996).
Best Management Practices: Reengineering the Air Force's Logistics System
Can Yield Substantial Savings (GAO/NSIAD-96-5, Feb. 21, 1996).
Inventory Management: DOD Can Build on Progress in Using Best Practices to
Achieve Substantial Savings (GAO/NSIAD-95-142, Aug. 4, 1995).
Commercial Practices: DOD Could Reduce Electronics Inventories by Using
Private Sector Techniques (GAO/NSIAD-94-110, June 29, 1994).
Commercial Practices: Leading-Edge Practices Can Help DOD Better Manage
Clothing and Textile Stocks (GAO/NSIAD-94-64, Apr. 13, 1994).
Commercial Practices: DOD Could Save Millions by Reducing Maintenance and
Repair Inventories (GAO/NSIAD-93-155, June 7, 1993).
DOD Food Inventory: Using Private Sector Practices Can Reduce Costs and
Eliminate Problems (GAO/NSIAD-93-110, June 4, 1993).
DOD Medical Inventory: Reductions Can Be Made Through the Use of
Commercial Practices (GAO/NSIAD-92-58, Dec. 5, 1991).
(709384)
*** End of document. ***