Pentagon leaders made clear when they submitted their fiscal 2013 spending plan that there is no room for error, and that any reductions beyond what they submitted to the U.S. Congress would require a rethinking of their entire strategy. There is simply no room in a budget of $631.4 billion to cut.
Similarly, much has been made of the contrasts between the House Republicans’ version of that defense spending plan and the bill forged by Senate Democrats. Although there are differences in hundreds of individual line items, the net difference between the bills is $4 billion.
And yet, the Pentagon admits that it has at least $9 billion worth of excess items in its inventory. These include spare parts for obsolete systems, perishable items that won’t be used before their expiration dates, and supplies that exceed the U.S. military’s projected requirements.
Making matters worse, the Defense Department needs to free up its warehouse space for a flood of parts, supplies, weapons and other gear coming home from Iraq and Afghanistan.
Some of this can be sold internationally, but most will either be destroyed or sold on the civilian market as surplus, with the Pentagon earning pennies for every dollar invested, a terrible waste.
The lesson here is that the Defense Department’s slow adoption of intelligent supply chain management solutions is costing it dearly, at a time when the department can least afford the waste.
It’s not necessarily a lack of data, said Marine Corps Systems Command’s Col. Edward Mays, the assistant commander foracquisition, logistics and product support. The inventory data “exists,” he said, “but we haven’t had the time to think about how to use it.”
Despite this looming crisis, retired Navy Vice Adm. Keith Lippert, former head of the Defense Logistics Agency, said he is worried that it will take congressional hearings before key decision-makers in the Defense Department begin taking this problem seriously.
“It’s probably going to take some kind of burning platform to get everyone’s attention other than a new [Government Accountability Office] report,” he said.
It shouldn’t take that much. Logistics will never garner the attention that big-ticket acquisition programs enjoy, but the Pentagon ignores its inventory problem at its peril.
And it’s well past time to get cracking — $9 billion of waste is hardly chump change. That’s more than some nations’ procurement budgets, and enough to keep 90,000 troops in uniform for a year.
This is one area where industry has a major lead on the Pentagon with best practices such as just-in-time delivery and highly evolved supply chain management solutions. The Pentagon must move faster to adopt those best practices and make them part of its standard operating procedures.