Defense Inventory: Management Actions Needed to Improve the Cost Efficiency of the Navy's Spare Parts Inventory
Abstract
For the 4-year period we examined, the Navy had significantly more inventory than was needed to support current requirements. The Navy also experienced some inventory deficits, though to a far lesser extent. Our analysis of stratification data identified an annual average of about $18.7 billion of Navy secondary inventory for fiscal years 2004 through 2007, of which about $7.5 billion (40 percent) exceeded current requirements. About half of the $7.5 billion of inventory exceeding current requirements was retained to meet anticipated future demands, and the remainder was retained for other reasons or identified as potential excess. Based on Navy demand forecasts, inventory that exceeded current requirements had enough parts on hand to satisfy several years, or even decades, of anticipated supply needs. Also, a large proportion of items that exceeded current requirements had no projected demand. Inventory that exceeded current requirements included both serviceable and unserviceable parts, and was predominantly associated with steady programs that is, programs that were not significantly growing or declining. The Navy also had an annual average of about $570 million of inventory deficits over this 4-year period, which represented about 7 percent of its annual reorder point requirements. Fewer items had inventory deficits than had excesses, but some items experienced persistent deficits for the 4 years we reviewed.
Document Details
- Document Type
- Technical Report
- Publication Date
- Dec 01, 2008
- Accession Number
- ADA491588
Entities
People
- Carl Barden
- Carl Ramirez
- Cheryl Weissman
- Foster Kerrison
- Lionel C. Cooper Jr.
- Minnette Richardson
- Steve Pruitt
- Thomas Gosling
- William M. Solis
Organizations
- United States Government Accountability Office