Commercial Practices: DOD Could Reduce Electronics Inventories by Using
Private Sector Techniques (Chapter Report, 06/29/94, GAO/NSIAD-94-110).

The value of the Defense Department's (DOD) secondary inventories, which
include spare parts for weapon systems, electronic, and other hardware,
increased by $60 billion between 1980 and 1988. Private sector firms are
streamlining their operations by adopting innovative inventory
management strategies that cut costs and improve service. In most areas,
however, DOD has not streamlined operations and continues to buy and
store redundant levels of electronic items, valued at more than $2
billion. The size of DOD's electronic inventory reflects a philosophy of
meeting customer needs by having huge stocks on hand. The Defense
Logistics Agency's large inventory turns over slowly--about once every
four years on average, contains large levels of excess and obsolete
items, and costs DOD millions of dollars each year to hold. DOD is
trying to improve its logistics system, including using private sector
practices--long-term contracting, electronic ordering systems, and
direct delivery program--to manage some electronic supplies. Efforts to
implement these practices, however, affect only a small portion of
electronics supplies.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-94-110
     TITLE:  Commercial Practices: DOD Could Reduce Electronics 
             Inventories by Using Private Sector Techniques
      DATE:  06/29/94
   SUBJECT:  Military inventories
             Military procurement
             Electronic equipment
             Federal supply systems
             Military cost control
             Equipment inventories
             Spare parts
             Inventory control systems
             Logistics
             Non-government enterprises
IDENTIFIER:  F-14 Aircraft
             A-6 Aircraft
             DLA Standard Automated Materiel Management System
             DLA Paperless Order Placement System
             San Diego (CA)
             
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