DOD's High-Risk Areas: High-Level Commitment and Oversight Needed for DOD Supply Chain Plan to Succeed Page: 6 of 15
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Chain Management Is
There are two primary reasons why it is important for DOD to have
effective supply chain management. First, supply support to the warfighter
affects readiness and military operations. In fact, the supply chain can be
the critical link in determining whether our front-line military forces win
or lose on the battlefield. Second, given the scope of the supply
requirements to support U.S. military operations, the investment of
resources in the supply chain is substantial.
While DOD maintains military forces with unparalleled capabilities, timely
supply support is critical to sustaining these forces as they are trained and
deployed to protect our national security. For example, to support
Operation Iraqi Freedom (OIF), DOD moved more than 2 million tons of
cargo-including equipment, spare parts, supplies, and other items-
thousands of miles to the Persian Gulf. Conversely, supply shortages can
adversely affect the readiness of weapon systems. During OIF, for
example, shortages of items such as track shoes prevented large numbers
of Abrams tanks and Bradley Fighting Vehicles from operating during the
summer of 2003. In another case, tire shortages caused units to strip and
leave otherwise good vehicles as well as supplies behind.
Shortages of supply items also could hurt the morale of those who employ
the weapon systems and raise concerns about forces' safety with their
Furthermore, DOD has a significant investment in inventory and spends
billions for supplies each year. For example, at the end of fiscal year 2004,
DOD had approximately $77.4 billion worth of items in its inventory, an
increase of over $15 billion since fiscal year 2001, when DOD had
approximately $62.3 billion worth. DOD estimates that the annual costs of
supplies and associated operations for fiscal year 2005 are expected to be
$51.4 billion, or about 12 percent of DOD's $419 billion requested budget.
Unless the department has a sound management plan and acts to invest
resources to buy and provide supplies to units, improve the supply system,
as well as invest in essential information systems, the risk of fraud, waste,
abuse, and mismanagement remains high at a time when DOD is
challenged to maintain a high level of military operations while competing
for resources in an increasingly fiscally constrained environment. We
recognize that improving DOD's supply chain management may not save
money in the near term because of necessary investments in information
technology and other enablers. However, improved systems with timely
and reliable data should lead to more effective investment of resources in
the future and thereby avoid future costs.
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United States. Government Accountability Office. DOD's High-Risk Areas: High-Level Commitment and Oversight Needed for DOD Supply Chain Plan to Succeed, text, October 6, 2005; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc293883/m1/6/: accessed October 17, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.