Defense Inventory

The military's initiatives dating to the early 1970s to improve the management of identical repair parts have been largely ineffective. Many identical parts continue to be managed by more than one service, even though opportunities for savings and management efficiencies exist by using a single manager when there are multiple users of the same part. GAO believes that the savings from better management of identical parts would be considerable. Because of planning and management weaknesses, the Defense Department initiatives have not been successful in moving to an approach that would result in a single manager performing all inventory management duties.

GAO noted that: (1) DOD initiatives dating to the early 1970s to improve the management of identical parts have been largely ineffective; (2) many identical parts continued to be managed by more than one service, even though opportunities for savings and management efficiencies exist by using a single manager when there are multiple users of the same part; (3) while GAO cannot precisely quantify the savings from improving management of identical parts, GAO's work and past DOD studies showed that they would be considerable; (4) for example, GAO's analysis of 7,683 identical parts, with assets on hand valued at $474 million, showed that they should have been managed by one DOD component; (5) this condition is similar to what existed in 1995 when the DOD Inspector General reported that the primary inventory manager did not have information on over $400 million in assets held by the other services and that over $140 million of these assets could have been used to fill the needs of the primary manager; (6) due to planning and management weaknesses, the DOD initiatives have not been successful in moving to an approach that would result in a single manager performing all inventory management functions; (7) these weaknesses include not developing an implementation plan that contains performance objectives, milestones, and outcome measures linked to DOD's Logistics Strategic Plan, and not establishing oversight accountability for implementing the single manager approach Department-wide; and (8) these weaknesses are similar to long-standing problems noted in GAO's high risk reporting on DOD's inventory management that have hindered other major inventory management improvement initiatives.

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: