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Army Inventory: Opportunities Exist for Additional Reductions to Retail Level Inventories
GENERAL ACCOUNTING OFFICE WASHINGTON DC NATIONAL SECURITY AND INTERNATIONAL AFFAIRS DIV
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In prior reports, we recommended that the Army reduce its inventory levels at its retail activities divisions by not stocking items that were requested infrequently. The Army generally agreed with out recommendations. This report evaluates the progress the Army has made toward reducing its inventory levels for infrequently requested items and determines whether additional actions are required to streamline the Armys inventory systems at the divisions. As of September 1993, the Army had about 3.3 billion of inventory as its retail level activities. This represents a decrease from about 4 billion as of September 1991. The five divisions in our review had authorized inventory levels for common items valued at 234.2 million. Common items refer to parts for track and wheel vehicles and other support equipment and accounts for the vast majority of a divisions inventory. Common items are categorized as either demand-based or non-demand-based. Demand-based items are those demanded by division customers at least 3 times in a 12-month period. Non-demand-based items do not need a minimum number of requests in order to be stocked. Studies performed by the Army have shown similar results concerning the large number of inventory items that are infrequently demanded and contribute little toward improving supply responsiveness. These studies recommended that infrequently demanded items be removed from the authorized inventories and that the criteria for determining what items should be stocked be reevaluated.
APPROVED FOR PUBLIC RELEASE