Navy Supply: Improved Material Management Can Reduce Shipyard Costs
(Chapter Report, 07/27/94, GAO/NSIAD-94-181).

Material management practices at naval shipyards have improved since
GAO's last review in 1985, but further improvements are possible. The
shipyards' material requirements determination process still is not
working as intended. As a result, shipyards ordered more material than
was needed to repair ships and the shipyards had unused material on hand
after the repairs were completed. The quantity of unused material
exceeded the Navy goal and had to be written off as a loss when it was
unneeded elsewhere. In fiscal years 1991 through 1993, the shipyards
wrote off $88 million in losses for unused material, including $56
million in items sent to disposal. Excess material orders resulted from
several factors, including the lack of analysis into reasons for unused
material and the absence of historical material usage data to help
determine requirements. Also, because adequate management controls were
not in place, the shipyards maintained inventories of material that went
unrecorded on official inventory records, issued more shop store
material than was needed for repairs, and did not ensure compliance with
policies to eliminate excess inventories and protect material from loss.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-94-181
     TITLE:  Navy Supply: Improved Material Management Can Reduce 
             Shipyard Costs
      DATE:  07/27/94
   SUBJECT:  Military vessels
             Property and supply management
             Shipyards
             Management information systems
             Inventory control
             Military inventories
             Inventory control systems
             Military cost control
             Naval supplies
             Repair costs
IDENTIFIER:  Defense Business Operations Fund
             DOD Wholesale Supply System
             NAVSEA Advanced Industrial Management Program
             
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