Defense Inventory

Opportunities to Reduce Warehouse Space Gao ID: NSIAD-95-64 May 24, 1995

The Defense Department's (DOD) 600 million cubic feet of warehouse space make DOD the world's largest inventory manager. Although DOD has substantially cut the number of its storage depots and the inventory stored there--ranging from medical supplies to clothing to spare parts--it could reduce inventory levels still further, particularly among deteriorated or obsolete items. DOD should focus on getting rid of unneeded items that take up a lot of space and involve more than 20 years' supply on hand. This report determines (1) the size of DOD's secondary inventory, (2) the amount of space occupied by secondary inventory that DOD does not need to satisfy current war reserve and operating requirements, (3) the cost of storing this inventory, and (4) the time it will take to use it.

GAO found that: (1) DOD secondary inventory occupies about 218.8 million cubic feet; (2) 60 percent of the secondary inventory is not needed to satisfy current war reserve or operating requirements, however, many items may have potential future use; (3) the inventory not currently needed consists of 2.2 million different types of items; (4) DOD has more than a 20-year supply for some items, but many others have deteriorated or become obsolete; (5) DOD should get rid of unneeded items that occupy space and exceed more than 20 years of supply; (6) although DOD has begun programs to reduce the secondary inventory, its efforts have been partially offset by decreasing inventory demands and increasing returns of materials by deactivated forces; (7) DOD disposed of secondary inventory items valued at $43 billion during the past 3 fiscal years; and (8) the Defense Logistics Agency is implementing a pricing procedure that should increase inventory managers' incentives for disposing of unneeded items.

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: Team: Phone:


The Justia Government Accountability Office site republishes public reports retrieved from the U.S. GAO These reports should not be considered official, and do not necessarily reflect the views of Justia.