Air Force Logistics:

Improved Redistribution of Retail Inventories Needed

NSIAD-91-165: Published: Jul 10, 1991. Publicly Released: Jul 10, 1991.

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Pursuant to a congressional request, GAO examined the Air Force's management of its excess retail inventory, focusing on whether the Air Force: (1) accurately and completely reported the inventory; (2) properly considered it in procurement decisions; and (3) used it to fill other retail activities' requisitions.

GAO found that: (1) between September 1987 and March 1990, inventories of consumable items and low-cost equipment that exceeded Air Force operating needs increased from $442 million to $927 million; (2) the Air Force accumulated about $1 billion in excess retail inventories due to limited visibility over retail excess by wholesale inventory managers and the Defense Program for the Redistribution of Assets (DEPRA); (3) limited visibility occurred because the Air Force does not require complete reporting of retail-level excess and allows retail activities to prematurely cancel reports of excess; (4) air logistics centers (ALC) did not always use reported excesses to fill backorders and DEPRA was not aware of many redistribution opportunities; (5) ALC issued redistribution orders to fill backorders in only about 21 percent of 244 excess reports; (6) the primary reasons for excess retail inventory included decreasing demands, customer turn-ins, requisitioning problems, inventory adjustments, and deletion of adjusted levels; and (7) the Air Force is studying inventory growth to develop strategies for reducing inventories, but it is not broad enough to identify specific corrective action.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The recommended action was taken in June 1991.

    Recommendation: The Secretary of the Air Force should direct major commands to use the quarterly DEPRA operations report to monitor whether bases are reporting their excess assets.

    Agency Affected: Department of Defense: Department of the Air Force

  2. Status: Closed - Implemented

    Comments: AFLC issued instructions to ALC on July 1, 1991, reinforcing the need for item managers to laterally redistribute base excesses to fill backorders.

    Recommendation: The Secretary of the Air Force should direct the Commander, Air Force Logistics Command (AFLC), to: (1) minimize the manual processing of reports of excess; and (2) ensure that ALC item managers have clear guidance on the procedures that should be used to manually direct the redistribution of reported excess to fill backorders.

    Agency Affected: Department of Defense: Department of the Air Force

  3. Status: Closed - Implemented

    Comments: On January 28, 1991, the Air Force directed its Standard Systems Center to modify the Standard Base Supply System to report all assets above the requisitioning objective to wholesale managers. The action was completed in February 1992.

    Recommendation: The Secretary of the Air Force should require retail supply activities to report all assets above their requisitioning objectives to wholesale inventory managers and to DEPRA.

    Agency Affected: Department of Defense: Department of the Air Force

  4. Status: Closed - Implemented

    Comments: The Department of Defense (DOD) amended the Military Standard Requisitioning and Issuing Procedures on September 18, 1991, requiring the Defense Automated Addressing System Office to retain Air Force reports of excess for a maximum of 90 days.

    Recommendation: The Secretary of Defense should instruct the Director, Defense Logistics Agency, to hold item managers' responses to Air Force reports of excess for a maximum of 90 days rather than 75 days.

    Agency Affected: Department of Defense

  5. Status: Closed - Implemented

    Comments: The recommended action was taken in July 1991.

    Recommendation: The Secretary of the Air Force should direct the Commander, AFLC, to expand the scope of the Air Force Logistics Management Center's inventory dynamics study to enable the Center to recommend actions that will reduce the: (1) amount of unneeded materiel that Air Force units and activities buy and subsequently return; and (2) amount of excess Systems Support Division and General Support Division materiel that retail supply activities have on requisition.

    Agency Affected: Department of Defense: Department of the Air Force

 

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