DOD Food Inventory: Using Private Sector Practices Can Reduce Costs and Eliminate Problems
NSIAD-93-110
Published: Jun 04, 1993. Publicly Released: Jun 04, 1993.
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Highlights
Pursuant to a congressional request, GAO reviewed the U.S. military food supply system, focusing on: (1) the Department of Defense's (DOD) and private food industry's inventory management practices to supply food to the services; and (2) whether DOD could adopt any practices that might reduce its logistics costs.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | The Secretary of Defense should direct all four services and the Defense Logistics Agency to conduct a demonstration project of an expanded use of distributors for peacetime troop feeding within the continental United States. This project should involve a variety of installations and end-users and should test distribution of food items directly to end-users where feasible. It should also address identified concerns, such as those of some small businesses. |
Closed – Implemented
On August 16, 1993, DOD tasked the services and the Defense Logistics Agency to conduct a demonstration project on an expanded use of distributors for peacetime troop feeding. The project began in early 1994 and will end by October 1995.
|
| Department of Defense | The Secretary of Defense should ensure that DOD collects accurate information about its food distribution costs, including ordering and inventory holding costs, operating costs of base warehouse activities, and distribution costs of end-users receiving food items from base warehouse activities. |
Closed – Not Implemented
As part of a test begun in January 1995 to expand the food prime vendor program to dining facilities in the southeastern United States, DOD will measure the monetary cost and benefits, customer satisfaction, and distributor performance by comparing the traditional military food supply system to the prime vendor method. This action is in line with the intent of this recommendation, and no further followup is required.
|
| Department of Defense | The Secretary of Defense should ensure that DOD eliminates base warehouse activities that are close to one another and have redundant functions. |
Closed – Implemented
The intent of this recommendation has been achieved. In 1994, DLA began testing the use of prime vendors to supply food to military dining facilities. By the end of 1997, DLA plans to have prime vendors supporting all military dining halls in the continental United States. Since 1994, DLA has reduced peacetime inventories by over 40 percent. In a test of the prime vendor concept in a four-state area, DOD estimated it saved about $17 million in food inventory reductions and related costs. As a result, service officials said that they have been able to vacate warehouses that had been required to store food items.
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Topics
Best practicesFederal supply systemsFood industryFood servicesInventory control systemsMilitary cost controlMilitary inventoriesMilitary procurementPrivatizationWarehouse facilitiesComparative benchmarking products