DoD has made progress implementing its "comprehensive inventory management improvement plan" but is just 18 months into a four-year effort and many planned activities remain, GAO has said.
It said the department’s goal is to reduce on-order and on-hand excess inventory but that it needs to set more ambitious targets for the plan to be effective in guiding further improvement.
As of September 2010 DoD had $8.4 billion worth of on-hand excess inventory, categorized for potential reuse or disposal, and $940 million worth of on-order excess inventory, already purchased but likely to be excess due to changes in requirements, according to GAO-12-493.
It said that going forward DoD faces such challenges as adjusting demand planning to changing circumstances, and enforcing consistent implementation of guidance at the military service level.
DoD agreed with recommendations to periodically re-examine its targets for on-hand and on-order excess inventory as well as to develop guidance to establish a set of metrics including standardized definitions and calculations that are then employed to monitor its inventory management practices.
