Army Inventory Management in Korea
LCD-77-214: Published: May 9, 1977. Publicly Released: May 9, 1977.
- Full Report:
The Army's inventory management system in Korea is part of the direct support system. The purpose of the system is to reduce the large peacetime investment in overseas depot stocks for the support of combat divisions and their support units. The Army has reestablished a 30-day depot safety level of stocks at Camp Carroll which consists of 12,500 items valued at about $2.5 million.
The data used to identify the items and compute the requirements did not accurately represent the items or quantities that should make up the safety level. This safety-level concept represents, in general, the same one to which the Army Audit and GAO took exception in 1973 and 1974. The rationale for the reestablishment of the depot safety level was questionable, and a reevaluation of the safety level of stocks is needed. The reestablished safety level is not necessarily related to mission-essential items or high-priority needs. Increased stockage has not been the solution to unit "stock-out" problems, and the present program for redistributing stock fund excesses has not been effective.
Recommendation for Executive Action
Comments: Please call 202/512-6100 for additional information.
Recommendation: The Secretary of Defense should reevaluate the need for the 30-day safety level, taking into consideration: (1) the downward trend in order-ship time for requisitions; (2) the 90-day order-ship time used by units in Korea to compute requirements; and (3) economic order quantity computations for most stock-fund items, which provide more than 30 days of operating stocks. In addition, he should defer replenishment of safety-level stocks in Korea; cancel related on-order quantities pending reevaluation of the need for these stocks; and provide an improved automated redistribution of unit stock-funded excesses.