Summary: Acquisition leadtime is used in inventory management to determine the quantity of items needed to meet demand while stocks are being replenished. Overstated leadtimes can swell inventories unnecessarily. During the 1980s, the Defense Department's (DOD) acquisition leadtime requirements grew by $13 billion. DOD has made only limited progress in reducing acquisition leadtime because its leadtime reduction initiatives have been unevenly implemented by the military services and by the Defense Logistics Agency. GAO also found opportunities to reduce leadtime that were overlooked by DOD. GAO believes that DOD can cut acquisition leadtime days by at least 25 percent during a four-year period at a savings of about $1 billion. This reduction can be achieved by reemphasizing prompt implementation of DOD's 1990 initiatives, periodically validating and updating old leadtime data for long leadtime items, and considering leadtime reductions in deciding whether to continue buying spare parts from the prime contractor or from the manufacturer.
