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

2. 2 Bottom Line Up Front  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

3. 3 Background  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

4. 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 System Receipt Transaction (MRA) Customer Requisition Actual Arrival of Materiel (Fixed Reader Visibility Transaction) Receipt Take-up Time (Average 4.19 days; Median 1.95) 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) Release to Carrier Represents average time to MRA for requisitions to Hawaii customers

5. 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. 6 Conclusion  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

7. 7 BACK UP SLIDES

8. 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