Millions of Dollars Can Be Saved by Storing Air Force Inventories Nearer the User and Improving Distribution Practices
LCD-80-105: Published: Aug 22, 1980. Publicly Released: Aug 22, 1980.
- Full Report:
The Air Force Logistics Command (AFLC) has not positioned its spare parts inventories at the air logistics centers which could best serve customers while still minimizing distribution cost. Most of this inventory is first stored at an air logistics center with item management responsibility and then shipped long distances to using activities located at or near other air logistics centers. The Air Force can save money on inventory investment costs and in handling, transportation, and inventory holding costs by storing spare parts at the air logistics center located nearest the ultimate user. More can be saved by eliminating reshipments of reparable items to repair centers.
Air Force Logistics Command managers already have data at hand to aid in correcting the problems which GAO noted. The key is management emphasis to assure continual attention to the problems of positioning and routing. Positioning all stocks at the center nearest the customer may not be practical because of varying use rates, and increased transportation and handling costs when prorating some shipments. However, future investments in inventory can be substantially reduced and supply responsiveness improved by better positioning of stocks. Misrouting the shipment of items needing repair results equally from the lack of instructions and from lack of compliance where instructions are provided.
Recommendation for Executive Action
Comments: Please call 202/512-6100 for additional information.
Recommendation: The Commander of the Air Force Logistics Command should stress the importance of proper positioning of spare parts and monitor air logistics center progress in implementing the latest regulations. He should increase efforts to insure that users are provided accurate shipping instructions, establish procedures for isolating misrouted items so the items can be quickly identified and resolved, and issue shipping instructions to users who do not have them.