DoD Item Reduction Program 4/25/00 DoD Item Reduction Program DSCC-VSC Intro 11/24/2018

Item Reduction (IR) The Item Reduction Program is defined by: Title 10 of the United States Code “Cataloging and Standardization Act” DOD 4120.24-M “Defense Standardization Program Policies and Procedures”, Appendix 8 “Item Reduction Program” 11/24/2018

Item Reduction continued 4/25/00 Item Reduction continued Item Reduction Studies (IRSs) are intended to reduce to the highest practical degree possible the number of sizes and kinds of items that are similar (considering form, fit and function) This concept supports where one item can satisfy the requirements of several items (e.g., considering: material finish, material type, size of items, head type, etc.) Defines Item Reduction in very general terms. 11/24/2018

Item Reduction continued 4/25/00 Item Reduction continued Expedited Item Reduction Study List (EIRSL) – An item reduction study listing containing items where logistics support is jeopardized. Proposed Item Reduction Study List (PIRSL) – An item reduction study listing containing items that are grouped because their form, fit, and function allows one or several items to be replaced by a single item. Defines the functions and methodologies used within IR 11/24/2018

Item Reduction continued 4/25/00 Item Reduction continued The Item Reduction Activity (IRA), as defined in SD-1, shall: Determine the cost benefit of conducting an IRS. Develop IRS. Coordinate IRS with the Custodians, Using Activities, and GSA. Resolve comments. Approve IRS after resolving comments. Submit Item Standardization Code changes to the Federal Logistics Information Service (FLIS). Print and distribute approved IRS (CIRL). Further describes the functions of IR 11/24/2018

4/25/00 IR Tools DLA uses several automated and manual tools in developing & conducting IRS: Item Reduction Web site Capability (IRWSC) Item Standardization Application-On-Line (ISA-OL) DLA’s SAMMS FLIS JEDMICS (Technical Drawings) FEDLOG Commercial Research capability: Haystack Commercial hardcopy catalogs Shows the number of tools used. Emphasized the new IRWSC used to coordinate proposals among the services. 11/24/2018

4/25/00 IR Coordination Resolving Nonconcurrences - The IRA shall resolve nonconcurrences in one of three ways: The IRA may accept the nonconcurrence The IRA may reject the the nonconcurrence with justification, allowing the submitter at least 30 working days to rebut the rejection If no reply is received in 30 working days, the IRA shall contact the custodian If the custodian is unsuccessful in getting a reply the service DEPSO will be contacted Items shall not be standardized by default 11/24/2018

4/25/00 IR Issues Timeliness of responses are particularly important for EIRSLs EIRSLs are often the result of a backorder, and the answer may be the solution to that backorder Delays in EIRSLs may result in readiness issues for the services 11/24/2018

4/25/00 IR Results Effectively, the Using Services/Agencies have identified that an NSN they currently use in their equipment can be supported with another NSN. This replacement has been coordinated with all recorded users of the NSN being replaced The IRS results in agreed to standardization relationships being recorded in FLIS 11/24/2018

4/25/00 IR Benefits The IR program benefits DLA and our customers in many ways: Increases the use of standard parts Decreases the number of redundant NSNs Decreases backorders and DMS situations Increases interoperability Decreases cost 11/24/2018

4/25/00 Cost Avoidance The benefits of Item Reduction are measured by cost avoidance Cost avoidance attempts to measure the cost that is saved due to the use of these programs It is difficult t measure the benefits of the MPCAG program. The concept used to measure these benefits is called Cost Avoidance. Cost Avoidance is the act of avoiding spending money. If spending money can be avoided a gain is realized. The difficulty is determining what that cost is, particularly in the rather complicated world of military parts procurement. 11/24/2018

Cost Avoidance continued 4/25/00 Cost Avoidance continued Cost avoidance is based on the costs associated with maintaining standard part numbers instead of non-standard ones This cost avoidance impacts DLA as well as the military services and contractors Formal Cost Avoidance is based on the cost during the life of the weapon system to maintaining multiple non-standard parts numbers versus the cost of maintaining one standard part number. These costs affect DLA and DoD to a great extent, but also impact the contractors involved. 11/24/2018

Cost Avoidance continued 4/25/00 Cost Avoidance continued Cost avoidance takes many aspects of total ownership into account Cost of additional NSNs Paperwork costs Tracking costs Bins Larger buys of fewer unique items Less DMS problems Cost avoidance takes the entire cost of ownership of that unique part number for the duration of the specific weapon system and compares it to the cost of a shared or standard part number. Costs associated with a particular part number (standard or non-standard) include: - Paperwork to put the part in the contractors, services, and DLA system Tracking costs to determine how many parts are available, where the parts are, who is making the parts etc Storage costs for maintaining an inventory of the parts. For unique parts these costs are related to a particular weapon system for the life of that system. For standard parts these costs are shared across multiple weapon systems. When true standardization is realized, everyone (DLA, Services, Contractors) benefit from the ability to buy larger quantities of fewer unique parts. This allows for economies of scale. Also, standard parts are generally available longer, thereby lessening the problems and costs associated with DMS problems. This can be a very big benefit of using standard parts. 11/24/2018