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Inventory Management: Greater Use of Best Practices Could Reduce DOD's Logistics Costs
DOD has successfully applied best practices to improve the management of medical and food items, which account for 2 percent of the consumable items DOD manages. DODs prime vendor program for medical supplies, along with other DOD inventory reduction efforts, has resulted in savings that we estimate exceed $700 million. More importantly, this program has moved DOD out of the inventory storage and distribution function for these supplies, emptying warehouses, eliminating unnecessary layers of inventory, and reducing the overall size of the DOD supply system. Also, DOD buys only the items that are currently needed because consumers can order and receive inventory within hours of the time the items are used.
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