Summary: Pursuant to a congressional request, GAO examined whether the Army was taking full advantage of opportunities to streamline its logistics system, focusing on whether the Army: (1) needed to buy and maintain all of the items it stocked at the division level; and (2) could reduce its investment in divisions' inventories without adversely affecting supply responsiveness.
GAO found that: (1) the Army could reduce its stateside inventory of spare and repair items by stocking only demand-based items, and by doing so it could reduce its investment in inventory without adversely affecting readiness; (2) at the four divisions GAO studied, non-demand-based items accounted for 42 percent of the total authorized inventory items and 53 percent of the total value of the authorized inventory; (3) 76 percent of the non-demand-based items had received fewer than three demands during the recent 12 months, and 61 percent of those items were not requested at all; (4) the Army has tested and begun to implement processes that will replace the current system with a single supply system; (5) enhancements in communications, distribution, and inventory management techniques have made it possible to respond to supply needs with less stock at the divisions; and (6) although the Army has taken action to improve its inventory levels, additional opportunities exist for it to decrease inventory levels.
