Better Controls and Data Needed To Distribute Defense Medical Supplies

LCD-80-77: Published: Jun 25, 1980. Publicly Released: Jun 25, 1980.

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The Department of Defense's (DOD) multiple systems for distributing medical supplies to the military services were evaluated regarding medical supply purchasing, inventory control and distribution, and possible duplication among systems. The Surgeons General of the Army, Air Force, and Navy were among the officials consulted. Field medical activities in the United States, Japan, Korea, and the Philippines were visited to examine the distribution methods used and to analyze the data provided by these activities on supply distribution effectiveness.

Distribution was hindered by excessive and old inventories, limited monitoring by the Defense Logistics Agency (DLA) of the diverse DOD purchasing and delivery systems, and weaknesses in the DLA centralized supply system. High medical supply inventories throughout the system increased cost and handicapped control over perishable items. The DLA personnel support center disposed of $12 million of its fiscal year 1978 medical inventory because the supplies were either outdated or no longer needed. Overseas depots stocked up to two and three times the authorized levels. These high inventories and inventory control weaknesses contributed to the high rates of loss for perishable supplies. During the first quarter of FY 1979, $10 million worth of perishable medical supplies were unusable or were of limited use because shelf lives would expire soon. Field activities experienced unnecessary losses when they received outdated supplies or did not properly store perishable items. Reporting on disposals was inadequate. DLA depots shipped too many supplies out of their assigned regions. Only Air Force requisitions regularly reached DLA within the DOD 2-day standard. The timeliness of Army and Navy orders was reduced by sequential edits and reviews by intermediate organizations. DLA experienced serious difficulty in meeting its goal of delivering nonstocked medical items within 30 days after receiving the requisition. Consolidating medical support functions in Japan, Korea, and Hawaii could reduce cost and improve control.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of DOD should direct DLA and each military service to eliminate excess medical supply inventories, maintain future inventories more in line with authorized levels, and review and improve inventory management practices and controls over perishable medical supplies. To improve DLA management of locally purchased nonstandard items, the Secretary of DOD should instruct the Director of DLA to take the following actions and require the military departments to cooperate in the DLA efforts to: establish a uniform numbering system for locally purchased nonstandard medical supplies; develop uniform criteria for reporting such supplies; prepare a DOD-wide directory of nonstandard medical supplies; and expand monitoring of local purchases to include all medical supplies shown on triservice reports, so that all possible candidates for central management can be considered. To reduce transportation costs, the Director of DLA should prepare and approve a plan to reduce unnecessary out-of-area shipments by DLA depots and set a specific timetable to carry out the plan. To improve timely processing of requisitions for medical items, the Secretary of DOD should direct the military departments to reconsider the need for sequential edits of such requisitions being sent to the Defense Personnel Support Center. Further, the Director of DLA should increase current efforts to improve timeliness of service by carrying out interim changes now, even where changes to the automated system are planned for the future. The Secretary of DOD should direct Defense Retail Interservice Program managers to prepare implementation plans to consolidate medical supply support in Japan, Korea, and Hawaii. Where the plans show opportunities to reduce medical support costs and to increase supply effectiveness, the Secretary should direct the military services to consolidate these functions.

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