Material Receipt Acknowledgement (MRA) Issues October 29, 2009

1. Material Receipt Acknowledgement (MRA) Issues October 29, 2009

2. Materiel receipt acknowledgements are not always being submitted as required by policy within 24 hours of recording receipt Lack of materiel receipt acknowledgement… Hinders acceptance documentation research Represents an internal control weakness The scope of the problem warrants a focused effort to identify gaps and resolve issues Bottom Line Up Front

3. Recent analysis of destination acceptance procedures highlighted a lack of MRAs from customer sites for new procurements DLA DVDs from April-June 2009: Prime Vendor: 7.8% of the PV DVD shipments had no MRA reflected in DAAS, representing 17% of the total value of PV DVD shipments Non-Prime Vendor: 12.9% of the Non-PV shipments had no MRA reflected in DAAS, representing 46.3% of the total value of Non-PV DVD shipments Recent analysis of passive RFID read events in Hawaii customer locations highlighted same lack of MRAs from customer sites for shipments from depot stock Passive RFID reads aid in “pay and chase” research RFID reads provides evidence the materiel at least entered the facility Several efforts are underway to try to resolve issue Background

4. Let’s Scope the Issue…Passive RFID provides data points not previously visible • Currently, CWT measured from customer requisition date to system receipt • Passive RFID at the requisition level provides visibility of key segments of CWT Requisition Submission to MRA (Average 8.73 days; Median 6.00 days) ‘Release to Carrier’ to MRA (Average 5.75 days; Median 4.00 days) Receipt Take-up Time (Average 4.19 days; Median 1.95) Customer Requisition Release to Carrier System Receipt Transaction (MRA) Actual Arrival of Materiel (Fixed Reader Visibility Transaction) Represents average time to MRA for requisitions to Hawaii customers

5. Let’s Scope the Issue…Review reveals shipments entering facility without subsequent receipt • Analyzed all shipments from DDPH to Hawaii customers from Jan 1, 2009 - Jun 30, 2009 • 45,296 shipped from Distribution Depot Pearl Harbor to Hawaii Customers • Total value of shipments $3.7B • Of those, analyzed the passive tagged shipments (99.95% of all Hawaii shipments) • 5,602 of those passive tagged shipments had a read* at destination but had no MRA reflected in DAASC • Total value of shipments with a tag read and no receipt: $306.5M (8.2% of total Hawaii shipments dollar value) ? No System Transaction in DAAS X Actual Arrival of Materiel (Reader Visibility Transaction) *Excludes last 12 days of reads to give time to receipt materiel

6. Scope of this issue warrants attention Several efforts underway to try to resolve this issue: Receipt acknowledgements are discussed at the quarterly O-6 level Partnership Agreement Council (PAC) meetings at DLA DLA continues to work with DAASC to ensure MRA transactions being passed correctly Supply Process Review Committee is working with the Services on specific examples to try to resolve systemic errors Results of these efforts will be reported back to SCCG at a future meeting Conclusion

7. BACK UP SLIDES

8. MRO Volume & Value Data All Services* • Out of 45,296 shipments, 7,645 did not have an MRA reflected at DAAS (~17%) • Of the 7,645 shipments with no MRA, 73% of those shipments (5,602) had at least one passive RFID read that indicated the shipment had arrived at the customer site. * Jan 1- Jun 30, 2009 shipments from DDPH to Hawaii customers