Defense Inventory:

Improvements Needed in DOD's Implementation of Its Long-Term Strategy for Total Asset Visibility of Its Inventory

GAO-05-15: Published: Dec 6, 2004. Publicly Released: Dec 6, 2004.

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For more than 30 years, the Department of Defense (DOD) has worked to achieve full visibility over and accessibility to its spare parts inventory. This initiative, called total asset visibility (TAV), aims to provide timely, accurate information on the location, movement, status, and identity of units, personnel, equipment, and supplies. In 1999, GAO examined DOD's TAV implementation approach and recommended that DOD develop a strategic plan to guide its efforts. DOD did not concur and stated it would rely on the components to individually achieve TAV. DOD's current target to achieve TAV is 2010. As requested, GAO examined DOD's progress towards, and impediments to, achieving TAV over its spare parts inventory. GAO also assessed DOD's progress in ensuring that its inventory management systems comply with federal financial management standards.

Although DOD, the military services, and the Defense Logistics Agency (DLA) made varying degrees of progress toward achieving visibility over in-storage assets, DOD did not meet its prior goal to achieve TAV by 2004. In a series of reports issued since March 1999, GAO reported that DOD also lacks visibility and control over items being shipped from one location to another. GAO's most recent work indicates that the military services and DLA generally have inventory management systems that provide visibility over specific segments of their inventories, but existing systems cannot always share data on a near real-time basis within their organizations or across the department. While DOD and the components all have ongoing efforts to modernize their business systems and improve the capability to share data on a near real-time basis, the requirements, time frames, and cost estimates for these additional systems have not been developed. Consequently, DOD's ability to achieve the new TAV goal of 2010 remains uncertain. Three significant impediments hinder the achievement of TAV. First, DOD does not have a clear long-term strategy for achieving TAV. While DOD has identified TAV as a key goal of its departmentwide effort to refine and implement a business enterprise architecture, components' plans and initiatives lack a clear link to the architecture and DOD's long-term business management modernization program. Further, while the logistics community identified TAV as a key element in its logistics transformation efforts, it did not include TAV as a goal within its Future Logistics Enterprise, its mid-term logistics transformation plan. Consequently, the components are pursuing internal initiatives to attain TAV. Second, DOD lacks the systems integration necessary to provide TAV. As GAO recently reported, DOD has made little progress in refining its business enterprise architecture, which leaves DOD without a long-term strategy needed to successfully guide efforts to achieve TAV. Without proper oversight and approval of emerging systems, DOD will continue to deploy systems that do not have the ability to provide TAV. While DOD plans to address GAO's recommendations aimed at improving its institutional oversight of business system investments, DOD has yet to fully implement these recommendations. Third, DOD's inventory management systems have long-standing data accuracy and reliability issues. Without accurate, reliable data from these systems, new systems will also contain suspect data and not provide TAV. Unless DOD overcomes these impediments, it is unlikely that it will meet its goal of achieving TAV by 2010. DOD has made little progress in assuring that its inventory management systems are substantially compliant with federal financial management standards. DOD has recognized the weaknesses within its financial management and feeder systems, and stated in its Performance and Accountability Report for fiscal year 2003 that its systems did not substantially comply. GAO's review of two emerging logistics systems raises concerns regarding DOD's lack of policies and procedures.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Matter for Congressional Consideration

    Matter: If the Congress wants a better understanding of the department's plans and progress for attaining TAV, it may wish to consider having the Secretary of Defense include a section specifically addressing TAV implementation in its annual report to the Congress on the progress it is making in refining and implementing the business enterprise architecture in support of the business management modernization program, as required by section 332 of the fiscal year 2005 national defense authorization act. Specifically, the Congress may wish to consider requiring the Secretary of Defense to outline in this annual report the department's plans, milestones, performance measures, and progress for attaining TAV throughout the department.

    Status: Closed - Not Implemented

    Comments: DOD, in conjunction with OMB, has developed a plan to guide the department's effort to have supply chain management removed as a high risk area for DOD. Achieving total asset visibility is one of the key elements of DOD's plan. This effort has been the subject of Congressional hearings in October 2005 and July 2006 and will continue to be monitored by Congress. Therefore, DOD will be reporting the status of efforts to achieve TAV to Congress on a periodic basis, which was the intended outcome of this recommendation.

    Recommendations for Executive Action

    Recommendation: DOD should develop a cohesive, departmentwide plan to ensure that TAV is achieved. Specifically, the Secretary of Defense should develop a departmentwide long-term TAV strategy as part of the Business Enterprise Architecture that establishes outcome-oriented TAV goals and performance measures for all relevant components and closely links the measures with timelines for improvement.

    Agency Affected: Department of Defense

    Status: Closed - Not Implemented

    Comments: While DOD has developed a plan to remove supply chain management as a high risk area, which include achieving TAV, the plan does not identify specific outcome-oriented goals and performance measures with respect to TAV. GAO has continually identified the need to identify the goals and performance measures with respect to TAV and we continue to believe the department needs to identify appropriate goals and performance measures. GAO will continue to monitor the plan and DOD's progress as the department continues its efforts to improve supply chain management.

    Recommendation: DOD should develop a cohesive, departmentwide plan to ensure that TAV is achieved. Specifically, the Secretary of Defense should develop a departmentwide long-term TAV strategy as part of the Business Enterprise Architecture that identifies how departmentwide systems issues that affect implementation of TAV will be addressed.

    Agency Affected: Department of Defense

    Status: Closed - Implemented

    Comments: DOD has developed a plan to remove supply chain management as a high risk area. This plan identifies asset visibility as one of three key focus areas and identifies achieving total asset visibility as one of its long-term goals. In addition, the plan requires the department to more fully incorporate asset visibility into DOD's logistics business enterprise architecture. By linking asset visibility to the logistics BEA, systems issues will be addressed since DOD's systems used to provide asset visibility will have to be compatible with the architecture.

    Recommendation: DOD should develop a cohesive, departmentwide plan to ensure that TAV is achieved. Specifically, the Secretary of Defense should develop a departmentwide long-term TAV strategy as part of the Business Enterprise Architecture that identifies the resource requirements for implementing TAV and includes related investment analyses that show how the major information technology investments will support TAV goals.

    Agency Affected: Department of Defense

    Status: Closed - Implemented

    Comments: While DOD has developed a plan to remove supply chain management as a high risk area, which include achieving TAV, the plan does not identify the resource requirements needed to achieve TAV or to implement the plan. GAO has continually identified the need to identify the resource requirements associated with the supply chain management to the department and we continue to believe the department needs to identify its resource requirements. GAO will continue to monitor the plan and DOD's progress as the department continues its efforts to improve supply chain management.

    Recommendation: DOD should develop a cohesive, departmentwide plan to ensure that TAV is achieved. Specifically, the Secretary of Defense should develop a departmentwide long-term TAV strategy as part of the Business Enterprise Architecture that describes the complete management structure and assigns accountability to specific offices throughout the department, with milestones and performance measures, for ensuring timely success in achieving TAV.

    Agency Affected: Department of Defense

    Status: Closed - Implemented

    Comments: By including TAV as part of its efforts to remove supply chain management as a high risk area, DOD has created the departmentwide plan as we recommended. The DOD plan creates a management structure for addressing supply chain issues, including TAV, and assigns responsibility for achieving TAV to specific offices within the department. In addition, the initiatives identified in the plan have milestones and performance measures to ensure success in achieving the plans goals, including TAV.

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