Navy Material Handling Equipment Costs Can Be Reduced

LCD-80-31: Published: Jan 30, 1980. Publicly Released: Jan 30, 1980.

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The Navy has long recognized that material handling equipment (MHE) can increase productivity in operations involving the physical handling of materials. However, because of the high initial investment costs for MHE, as well as repair and maintenance costs, activities should acquire and maintain only that equipment which is actually needed.

Underutilization of, and excessive allowances for, MHE appear to be widespread throughout the Navy. The basic causes of the excessive MHE are: allowances for MHE have not been updated to reflect current requirements, identified excess MHE has not been disposed of or redistributed, and recommendations made by internal auditors to improve MHE utilization and management have not been carried out. At the five Navy activities reviewed, it was estimated that elimination of unneeded MHE, establishment of reasonable equipment allowances, and efficient use of needed equipment would save $5.3 million in future replacement costs and would substantially reduce annual maintenance and repair costs. Many Navy installations have excessive quantities of MHE onhand, and as a result: much of the MHE is greatly underused, almost all MHE qualifies for disposal based on age before it has provided the amount of service anticipated when it was bought, Navy activities are incurring millions of dollars to replace and repair unneeded MHE, and imbalances exist in the distribution of MHE among Navy activities with some having excess MHE while others need identical equipment.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of Defense should direct the Navy to establish controls at a high enough management level to ensure all that recommendations made by the Naval Audit Service and concurred in by the affected activities are promptly and effectively carried out.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of Defense should require commanders of all activities which are authorized to make one component of their activities responsible for control of all MHE and for its efficient use.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of Defense should direct the Navy to redistribute within the Navy, or transfer to the Defense Property Disposal Service for reutilization screening or disposal, all equipment that exceeds the updated MHE allowances.

    Agency Affected: Department of Defense

  4. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of Defense should direct the Navy to base its 1982 and future years' budget requests for funds to purchase or lease MHE on updated allowances that represent actual need.

    Agency Affected: Department of Defense

  5. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of Defense should emphasize the need for maximum utilization of MHE and direct the Navy to establish realistic usage standards for MHE and, on the basis of these standards, update authorized MHE allowances.

    Agency Affected: Department of Defense

  6. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of Defense should direct the Navy to report on the implementation of these recommendations. The report should include, by activity and by type of equipment, the quantities and dollar value of MHE authorized: under allowances; onhand; under or over allowances; redistributed within the Navy; and transferred to the Defense Property Disposal Service.

    Agency Affected: Department of Defense

 

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