[This article was first published in Army Sustainment Professional Bulletin, which was then called Army Logistician, volume 3, number 2 (March–April 1971), pages 16–19, 44. The text, including any biographical note, is reproduced as faithfully as possible to enable searchability. To view any images and charts in the article, refer to the issue itself, available on DVIDS and the bulletin’s archives at asu.army.mil/alog/.]
EXCESS INVENTORY is a serious and costly problem common not only to Army elements but also to many large private industries. The U.S. Army Tank-Automotive Command (USATACOM) was searching for an answer to the problem of excess inventory as early as 1966. The question was how to turn excesses — or liabilities — into useful stocks — or assets. A task force was established to look for an answer to that question. The task force assumed the name, Project USE — meaning “Utilization of Serviceable Excess,” a particularly appropriate acronym. The object of Project USE was to determine if excess items could be used for purposes other than those for which they were originally intended, and if such reuse could be achieved economically.
This is the story of how the Project USE task force took excess items and was able to find ways of converting them to Government use.
USATACOM’s major responsibility is procuring and supplying repair parts for the tracked and wheeled vehicle fleet used by all U.S. military services and many friendly foreign nations. USATACOM provides support for more than a million vehicles. The management practices used in disposing of excess inventory have an impact on the total funding required by this command to effectively carry out its mission. The Project USE task force operated as a three-man team for its first year. Its early investigations made clear that there was a potential for significant reductions in the cost of doing business. After a year of exploratory studies and a notable degree of progress, the task force was given permanent status in January 1967. The team was expanded to six members and today functions within USATACOM’s Materiel Directorate.
The effectiveness of Project USE relates directly to its organization and to the skills of its personnel. Each individual has a minimum of ten years’ experience in his specialty. From a skills point of view, Project USE has the equivalent of a program analyst, a cost estimator, an engineer, an automotive equipment specialist, a maintenance specialist, a cataloger, and an administrative specialist.
In dealing with the problem of excess inventory, a small, highly specialized organization has a number of advantages that are denied larger groups. Movement from one USATACOM element to another is easier, affording a direct approach to problems. This direct approach is often lacking in large operating elements. The somewhat independent status of Project USE gives it an objectivity — an ability to view the forest without having the line of vision obscured by surrounding trees. A small, dynamic group who understands the varying terminology and programing procedures of USATACOM’s specialized activities can communicate quickly. They comprehend the “big picture” and respond by developing solutions in specific problem areas.
As a first step the Project USE team developed a checklist against which all excess inventory could be evaluated. Still an essential management tool of Project USE procedure, the checklist considers every available alternative for excess items from the modification of old assemblies to meet current requirements to disposal through public sale as unserviceable surplus. Three such alternatives on the checklist include modification of an excess item for a new and different application, disassembly of kits and assemblies to allow use of components, or determination that an excess item has value as Government-furnished materiel. These are but three of the major alternatives to disposal of excess items.
There are many other techniques used by the Project USE team that involve critical reviews and item studies. One of the most effective review techniques compares items that perform basically similar functions but have different Federal stock numbers. For example, a heater used in a vehicle cab requiring 20,000 to 30,000 BTU’s was compared with other heaters having different Federal stock numbers. The team discovered that excess heaters used in the M38-series jeep could be modified and used to meet heater requirements for the M151 series jeep. By adding four holes, elongating two bracket holes that held the heater in place, and rotating the outlet 90 degrees, it was possible to use the excess heaters. This modification reduced heater procurement by a thousand heater units and saved more than $62,000.
The same principle is used to meet engine requirements. The technique used involved taking the engine-block assembly of one engine, making minor modifications, adding appropriate items, such as the generator, spark plugs, pulley, and air cleaner, to the basic block to produce the required engine. Even more important than the dollars saved by this method is the valuable time saved by being immediately responsive to a customer’s engine requirements. In one instance this method made it possible to provide an additional 82 engines when they were most needed and save $31,000 in new procurements in the process.
An earlier effort of Project USE netted a savings of more than $13,000 by recovering 2,500 gasoline filter assemblies salvaged from surplus winterization kits. The assemblies were the kind that USATACOM and the U.S. Army Aviation Systems Command (USA-AVSCOM) had on back order under separate Federal stock numbers. Though the USATACOM and USA-AVSCOM filter assemblies carried different numbers, their functions were basically the same. The USA-AVSCOM filter, though somewhat different in design from that used by USATACOM, could be used without adverse affect on operating efficiency.
As a direct result of this kind of Project USE action, more than 200 numbers have been deleted from the Federal stock number supply system.
Each case requires its own unique solution. The indicated solution for a specific case could involve improved management techniques or a revision of instructions contained in maintenance, technical, or inspection manuals. The solution might suggest a value-engineering approach, or it might require developing a program of standardization.
The standardization approach is being used in a study of deep-water fording kits for the 1/4-ton, 3/4-ton, 2 1/2-ton, 5-ton, and 10-ton trucks. There are 10 different fording kits in the system. A study still in progress suggests that ultimately it may be possible to develop one kit that will do the job for all.
Cold weather starting kits used in the Arctic were declared excess about two years ago. There were 1,483 of them valued at $1,728 each. A review of the kits showed they contained several components that were in short supply. Batteries that USATACOM had on back order were found in the kits. The kits contained cables that both USATACOM and the U.S. Army Weapons Command were in the process of buying.
By salvaging, modifying, and reissuing, many components from the kits originally earmarked for disposal as surplus were put to use, thus achieving a sizable savings.
Under the original concept, the Project USE team generated its own investigation of items. USATACOM computers identified excess items and surplus sales catalogs were closely scanned for salvageable items. As the accomplishments of Project USE continue to grow, the team has taken on what amounts to a consultant mission. Item managers are advised on a variety of management procedures. They are advised to increase retention levels when studies reveal new or additional applications. When investigation shows that engineering efforts are about to result in the introduction of an improved item, managers dealing with the earlier version of the item are advised to reduce procurement or increase disposal.
The consultation services introduce sound management techniques difficult to measure in tangible benefits. The primary advantage of the consultant service is that it reduces ordinary inventory loss that occurs through normal surplus disposal channels.
When the Project USE team gets a study request, the approach to the problem usually fits a standard pattern. Technical manuals, drawings, procurement requests, standardization documents, and other data associated with the item to be studied are intensively reviewed. The specific course of action finally taken is based on factors revealed during the review process.
One case the Project USE consultant service studied involved unusually high demands for steering wheels. The study request stated that steering wheels on 3/4-ton trucks were being replaced at the unusual rate of one steering wheel a year for every two trucks in the inventory. Seven steering wheels a year were being replaced on each 5- and 10-ton truck in the system. The high mortality rate on steering wheels was costing the government an estimated $100,000 a year. The problem was identified as cracks appearing in the wheels. A number of the wheels were brought to USATACOM where testing revealed cracking, not in the wheel itself, but only in the rubberized coating material covering the wheel. The cracks had no effect on the capability of the wheel to withstand road impact and continued use of the wheel posed no threat to the safety of personnel.
Unrealistic Standards Changed
Inspection procedures being used required the replacement of “cracked” steering wheels regardless of the cause of the cracking. This was an example of unrealistic inspection standards. Inspection criteria have since been changed and the savings as a result of reduced requirements have totaled $1.5 million over a three-year period. As an additional plus factor, depot storage space previously used for storing steering wheels is now available for other purposes.
In addition to requests from item managers for evaluation studies, similar requests originate from Army depots or result from informal discussions with USATACOM liaison personnel in the field.
A study of front axles on the 10-ton gasoline-powered truck is another case in point. The Project USE team was notified that 100 axles requiring minor repairs were about to become excess. An analysis of the review factors determined that potentially excess axles could be converted with little difficulty to meet axle requirements for 10-ton diesel trucks. The conversion resulted in cancellation of a $172,000 procurement request and the subsequent use of $423,000 worth of excess axles. Storage space was recovered within the depots and item managers were provided with new standardization and interchangeability information as well.
Review and disposal of excess inventory is as big a challenge as any the U.S. Army has to offer. The value judgments made reflect a broad range of experiences, and though the decisions have been right more often than they have been wrong, there are imponderables in this business. Suppose you must decide whether or not to dispose of specialized items that require special tooling. If you decide to get rid of the items, the replacement cost will be extremely high should they ever be needed again. You must consider whether or not the storage cost of holding the item will be greater than the high-dollar replacement cost. Factors that cannot always be anticipated can — in some instances — make either decision a “bad” one. The Project USE performance record indicates the right decisions far outweigh the wrong ones.
In terms of tangible benefits, Project USE has put to use $7.6 million in inventory by configuration changes only. It has been credited with more than $2.5 million in validated savings under the Department of Defense Cost Reduction Program in its short history and at least two of the Project USE team members have been singled out annually for individual cost reduction awards. Project USE salaries, travel expenses, and other administrative costs have amounted to only $270,000 over a three-year period.
The tangible rewards of Project USE are substantial, but perhaps the most significant result has been a noticeable change in thinking among those in USATACOM who have benefited directly by the program. A new and enlightened attitude is taking hold on the subject of excesses. Supply people and others are on the lookout for salvageable excesses. They're thinking imaginatively and coming up with sound proposals for using excess inventory. Engineering and maintenance personnel are giving greater attention to developing techniques that will make it possible to exert more precise control.
Project USE began as a USATACOM experiment, but there is now significant interest expressed at the U.S. Army Materiel Command (USAMC) level. After a USAMC study and review of the USATACOM program, Project USE personnel were requested to conduct separate briefings for all USAMC commodity commands. The briefings have been completed and there are encouraging indications that the Project USE concept is achieving acceptance in other USAMC commodity commands.
Mr. Wayne Wood was a program analyst and chief of the Project USE operation at U.S. Army Tank-Automotive Command. He joined the Detroit-area installation after World War II, following two years of duty with the U.S. Marine Corps. Mr. Wood served as special assistant to the Detroit Arsenal Comptroller before taking the Project USE assignment in 1966.
| Date Taken: | 06.26.2025 |
| Date Posted: | 06.26.2025 11:22 |
| Story ID: | 501577 |
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