DOD's 2010 Comprehensive Inventory Management Improvement Plan Addressed Statutory Requirements, But Faces Implementation ChallengesGao ID: GAO-11-240R January 7, 2011
Our analysis showed that DOD's Plan addressed each of the eight required elements in section 328 of the NDAA for Fiscal Year 2010. The Plan contains eight sub-plans that each address a required element, as well as a ninth sub-plan that focuses on accomplishing several improvements that extend beyond the elements required by section 328. The sub-plans support the Plan's two overall goals: (1) DOD will reduce total on-order excess inventory from 8.5 percent of total obligated on-order dollars in fiscal year 2009 to 4 percent by the end of fiscal year 2016 and (2) DOD will reduce the on-hand excess inventory from 11.3 percent of the total value of inventory in fiscal year 2009 to 10 percent by the end of fiscal year 2012. The Plan addressed the eight required elements, but DOD faces a number of implementation challenges, including: aggressive timelines and benchmarks, identification of resources, implementation of enterprise resource planning (ERP) systems, standardization of definitions, processes, procedures, and metrics, and coordination and collaboration among multiple stakeholders. Our analysis showed that DOD's Plan addressed three characteristics and partially addressed the three remaining characteristics of a comprehensive, results-oriented management framework to guide implementation. The Plan addressed the characteristics of mission statement; goals, objectives, activities, milestones, and performance measures; and organizational roles, responsibilities, and coordination. For example, the Plan identifies a performance management structure that is intended to provide oversight and ensure actions are progressing as planned while monitoring for adverse effects on operational readiness. The Plan partially addressed the characteristics of problem definition, scope, and methodology; resources and investments; and key external factors that could affect goals. In particular, the Plan did not present the methodology used to develop the Plan; fully identify resources and investments needed to carry out the actions in the Plan; assign responsibility for monitoring external factors; or discuss how external factors, such as challenges in implementing the ERPs, could affect the ability to achieve the desired goals.