Navy Material Handling Equipment Costs Can Be Reduced

The Navy has long recognized that material handling equipment (MHE) can increase productivity in operations involving the physical handling of materials. However, because of the high initial investment costs for MHE, as well as repair and maintenance costs, activities should acquire and maintain only that equipment which is actually needed.

Underutilization of, and excessive allowances for, MHE appear to be widespread throughout the Navy. The basic causes of the excessive MHE are: allowances for MHE have not been updated to reflect current requirements, identified excess MHE has not been disposed of or redistributed, and recommendations made by internal auditors to improve MHE utilization and management have not been carried out. At the five Navy activities reviewed, it was estimated that elimination of unneeded MHE, establishment of reasonable equipment allowances, and efficient use of needed equipment would save $5.3 million in future replacement costs and would substantially reduce annual maintenance and repair costs. Many Navy installations have excessive quantities of MHE onhand, and as a result: much of the MHE is greatly underused, almost all MHE qualifies for disposal based on age before it has provided the amount of service anticipated when it was bought, Navy activities are incurring millions of dollars to replace and repair unneeded MHE, and imbalances exist in the distribution of MHE among Navy activities with some having excess MHE while others need identical equipment.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Henry W. Connor Team: General Accounting Office: Logistics and Communications Division Phone: (202) 275-4141