Defense Builddown And Inventory Management

DLA manages about one-fifth of DOD's $95 billion in secondary item inventory, such as spare parts to keep military equipment ready and operating. GAO has identified DOD supply-chain management as a high-risk area due in part to ineffective and inefficient inventory-management practices and weaknesses in forecasting the demand for spare parts. These factors have contributed to the creation of on-order and on-hand excess inventory. GAO was asked to review DLA's inventory-management practices. GAO reviewed, among other things, the extent to which DLA has (1) developed and met goals to reduce on-hand inventory and on-order excess inventory while reducing backorders, and any challenges faced in doing so, and (2) implemented initiatives using a comprehensive management approach to improve inventory management. GAO analyzed inventory data from 2009 through 2013, evaluated DLA's inventory processes, and interviewed DLA and DOD officials.