Defense Inventory: DOD Actions Needed to Ensure Benefits From Supply Depot Consolidation Efforts

Highlights

Pursuant to a congressional request, GAO reviewed the Department of Defense's (DOD) supply depot consolidation program to determine: (1) the validity of DOD-estimated cost savings for the prototype consolidation and for all depots; (2) the validity of actual cost savings at the prototype depots; (3) the impact of consolidation on the depots' performance; and (4) whether impediments exist that could prevent DOD from fully achieving the projected benefits.

Recommendations

Recommendations for Executive Action

Agency Affected	Recommendation	Status
Department of Defense	To achieve the full benefits of consolidation, the Secretary of Defense should increase DOD efforts to reduce the amount of stock in the supply depots.	Closed – Implemented The Defense Logistics Agency (DLA) has completed a detailed stock-positioning plan that considers the impact of inventory reduction, force reductions, and new distribution practices. In addition, DOD recently increased its inventory reduction goals to decrease its inventory from $73 billion in 1994 to $52 billion in 2001. DOD and BRAC recommended 5 depots for closure in 1995.
Department of Defense	To achieve the full benefits of consolidation, the Secretary of Defense should accelerate efforts to develop a standard distribution system for the supply depots.	Closed – Implemented DLA has selected a standard distribution system for its supply depots and is working on a phased implementation through 1995.
Department of Defense	The Secretary of Defense should instruct the Director, DLA, to develop a supply depot organization and stock repositioning plan based on reduced DOD inventory.	Closed – Implemented DLA has completed a detailed stock-positioning plan that considers the impact of inventory reduction, force reductions, and new distribution practices. In addition, DOD recently increased its inventory reduction goals to decrease its inventory from $73 billion in 1994 to $52 billion in 2001. DOD and BRAC recommended 5 depots for closure in 1995.

Full Report

Full Report (28 pages)

Media Inquiries

Sarah Kaczmarek

Managing Director

Office of Public Affairs

media@gao.gov

Public Inquiries

Topics

National Defense

Cost effectiveness analysisDefense cost controlFederal property managementInternal controlsInventory control systemsMilitary inventoriesMilitary materielDefense logisticsMilitary forcesInventory