United States General Accounting Office

GAO National Security and International

Affairs Division

May 1995 BEST PRACTICES

METHODOLOGY

A New Approach for

Improving Government

Operations

GAO/NSIAD-95-154

Preface

Private sector organizations are recognizing that in order to survive in the

future, they have to initiate major changes within their organization that

will make them more productive and reduce costs. Today, many federal

agencies are facing that same reality.

The Department of Defense (DOD)1

 is a prime example of an agency facing

the challenge of streamlining for efficiency and lower costs while

maintaining quality. DOD has accomplished that goal in several areas. For

example, since 1992, as a direct result of our recommendations, the

Defense Logistics Agency (DLA) has taken steps to have private sector

vendors supply certain personnel items directly to military facilities in lieu

of the traditional military supply system. As a result, by 1997, DLA expects a

53-percent reduction in its 1992 inventory level of these items.

What is behind these improvements? In large measure, these organizations

have benefited from GAO studies emphasizing “best practices,” carried out

by the Defense Management and NASA (DMN) issue area within the

National Security and International Affairs Division (NSIAD). The best

practices approach to change involves identifying organizations that are

widely recognized for major improvements in their performance and

efficiency in a specific area, such as inventory management. The

processes, practices, and systems identified in these organizations are

referred to as best practices, and provide a model for other organizations

with similar missions. Frequently, benchmarking is used to gather

information on these practices from a number of different organizations,

which is then applied to improving operations. Benchmarking is also an

effective approach for promoting organizational change.

By applying a best management practices approach, DMN has been able to

make recommendations intended to radically change DOD processes and

correspondingly produce substantial savings. To date, DMN has issued 14

reports related to implementing and managing best management practices.

Many of these reports illustrate the benefits from a best practices review.

Appendix I contains a listing of these reports.

The best practices approach need not be confined to our defense issues. In

this report, we explain how others could go about using the same

principles and techniques to promote and implement improved processes.

1

DOD remains the largest U.S. government entity, employing 3.5 million personnel with annual budgets

ranging from $240 billion to $250 billion.

Page 1 GAO/NSIAD-95-154 Best Practices Methodology
Preface

If you have any questions about this strategy, please contact me on

(202) 512-8412. Major contributors on the best practices assignments are

listed in appendix II.

Donna M. Heivilin

Director, Defense Management

 and NASA Issues

Page 2 GAO/NSIAD-95-154 Best Practices Methodology
Page 3 GAO/NSIAD-95-154 Best Practices Methodology
Contents

Preface 1

What Are Best

Management

Practices?

6

Why Use the Best

Management

Practices Approach in

Evaluations?

7

When Is a Best

Practices Approach

Appropriate?

9

How Do You Perform

a Best Management

Practices Review?

11

Understanding the Government Process You Want to Improve 12

Researching to Plan the Review 12

Selecting Appropriate Organizations 13

Collecting Data From Selected Organizations 14

Identify Barriers to Change 14

Making Recommendations for Change Constructive and

Convincing

15

What Else Do You

Need to Know?

17

Appendixes Appendix I: GAO Reports on Best Management Practices 20

Appendix II: Major Contributors in DMN’s Best Management

Practices Assignments

24

Figure Figure 1: Results in DOD’s Inventory Management Following

GAO’s Best Practices Reviews

8

Page 4 GAO/NSIAD-95-154 Best Practices Methodology
Contents

Abbreviations

DLA Defense Logistics Agency

DMN Defense Management and NASA Issues

DOD Department of Defense

GAO General Accounting Office

NSIAD National Security and International Affairs Division

Page 5 GAO/NSIAD-95-154 Best Practices Methodology
What Are Best Management Practices?

Best management practices refer to the processes, practices, and systems

identified in public and private organizations that performed exceptionally

well and are widely recognized as improving an organization’s

performance and efficiency in specific areas. Successfully identifying and

applying best practices can reduce business expenses and improve

organizational efficiency. Best practices we have identified in our work

resulting in recommendations to the defense community include:

(1) relying on established commercial networks to manage, store, and

directly deliver defense electronic items more efficiently; (2) using private

sector food distributors to supply food to the military community faster

and cheaper; and (3) adopting the use of supplier parks to reduce

maintenance and repair inventories.

Most of the Defense Management and NASA’s (DMN) best practices reports

have focused on using best management practices to improve a specific

the Department of Defense (DOD) process. DMN has also reported on

management concepts that are important in successfully implementing

best management practices throughout an organization, such as reporting

on techniques companies use to achieve and manage change.1

 See

appendix I for a list of the reports related to the use of best management

practices and additional information on each report’s findings.

1

See the reports Reengineering Organizations: Results of a GAO Symposium (GAO/NSIAD-95-34, 

Dec. 13, 1994) and Organizational Culture: Techniques Companies Use to Perpetuate or Change Beliefs

and Values (GAO/NSIAD-92-105, Feb. 27, 1992).

Page 6 GAO/NSIAD-95-154 Best Practices Methodology
Why Use the Best Management Practices

Approach in Evaluations?

DMN chose initially to look at applying best management practices

techniques in the area of supply management, because DOD’s supply

system has been an area with long-standing problems in which proposed

solutions seldom corrected the conditions identified. Also, DOD’s supply

management is a large budget item so the potential for large dollar savings

was present. DMN believed that comparing DOD’s supply management

practices to those that had a proven track record in the private sector

would provide a picture of what improvements were possible and indicate

proven strategies. A GAO consultants’ panel, consisting of retired DOD

officials and logistics business and academic experts, agreed that looking

at private sector practices would help us find ways to improve DOD

operations, because many private sector companies had made

fundamental improvements in logistics management.

DMN’s best practices work can result in radical changes in certain DOD

processes, as well as substantial dollar savings. Since 1992, as a direct

result of our recommendations, the Defense Logistics Agency (DLA) has

taken steps to have private sector vendors supply pharmaceutical

products, medical supplies, food, and clothing and textiles directly to

military facilities in lieu of the traditional military supply system. As a

result, by 1997, DLA expects a 53-percent reduction in its 1992 inventory

level of these items. With fewer days’ worth of supplies on hand, DLA depot

overhead costs will decline also. Other examples of results of best

management practices reviews are shown in figure 1.

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Why Use the Best Management Practices

Approach in Evaluations?

Figure 1: Results in DOD’s Inventory

Management Following GAO’s Best

Practices Reviews

Page 8 GAO/NSIAD-95-154 Best Practices Methodology
When Is a Best Practices Approach

Appropriate?

Deciding whether to use a best practices approach involves considering a

number of factors. Our experience shows that the following questions can

serve as a guide in making the decision.

• Have GAO and others reported on the acknowledged problem areas

before, and to what extent has there been attempts to make the

process work as designed? In our case, GAO had reported on DOD’s

inventory problems for over 30 years, and DOD had generally agreed with

our observations and had often taken steps to improve the process.

However, improvements were incremental at best and failed to achieve

significant gains in effectiveness or dollar savings.

• Is there a process with similar requirements that can be compared

to the one being examined but is implemented in a way that

provides significantly better results? For example, a military and

private hospital both depend on timely and accurate delivery of supplies.

• Do the areas being considered have an established counterpart in

the private or public sector that will provide evidence of the

benefits of a new process? For example, we compared the way DOD

procures, stores, and delivers food to base dining halls to the way

institutional food users in the private and public sector obtain food. Other

areas looked at, such as medical, clothing, and spare parts inventories,

also allowed us to make comparisons with processes with similar

objectives in the private and/or public sector.

A best practices review can be applied to a variety of processes, such as

payroll, travel administration, employee training, accounting and

budgeting systems, procurement, transportation, maintenance services,

repair services, and distribution. You may consider looking at an area

where the agency has already begun to implement some best management

practices, but with limited success. Additional work in the area may

provide a crucial boost to an agency’s efforts. Looking at current industry

trends in contracting out business functions (also referred to as

“outsourcing”) can also suggest areas that could benefit from a best

practices review. For example, private sector companies are beginning to

outsource logistics functions, primarily transportation and distribution,

and data processing functions.

The decision to use a best practices review should be made in a larger

context that considers the strategic objectives of the organization and then

look at the processes and operating units that contribute to those

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When Is a Best Practices Approach

Appropriate?

objectives. Ask questions like (1) What drives the costs in a particular

process? and (2) Is the process effective in achieving its goals? An initial

step is to determine all the variables that contribute to the expenditures

associated with the area. Another early step is to start with the areas that

the customers think are of major importance to the organization being

reviewed.

Identifying the scope of the process you plan to review is not always easy.

It is not always clear where you begin and where you stop when you

decide to benchmark a process. It is important that the entire process be

considered, rather than just part of the process. For example, in reviewing

DOD’s food supply, we examined the entire food supply system, including

buying, storing, and distributing food rather than just a part of the system

such as distribution because these parts are interconnected and changes

in one part will impact the others. If you fail to capture the entire process

then you may push costs into another section of the process or create an

improvement that is inhibited by trying to marry old ways with new ways

that are in conflict with each other. However, you cannot look at

everything. At least initially, select a process which is about ready to

accept change.

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How Do You Perform a Best Management

Practices Review?

Under a best practices review, you are forced to consider new approaches.

Specifically, you will compare how an organization performs functions

with one doing them differently—such as a function in a unique

government agency with a company performing the same or similar

function in the private sector. The different approach may turn out to be a

much better way of performing a function. Implementing this better way to

perform a process throughout the organization is what allows an agency to

make meaningful changes.

In identifying best practices among organizations, the “benchmarking”

technique is frequently used. In benchmarking with others, an organization

(1) determines how leading organizations perform a specific process(es),

(2) compares their methods to its own, and (3) uses the information to

improve upon or completely change its process(es). Benchmarking is

typically an internal process, performed by personnel within an

organization who already have a thorough knowledge of the process under

review. Our approach is similar. However, GAO’s role is to look at the

process from the outside, much like a consultant, and determine if that

process can be improved upon or totally changed.

The best practices evaluation will look not only at quantitative data, such

as costs, but also at how other processes and aspects such as

organizational culture might be affected by change.

In our work, we have found several elements that any best practices

review should include. These elements are listed below and then discussed

separately in detail:

(1) Gaining an understanding of and documenting the government

process you want to improve.

(2) Researching industry trends and literature, and speaking with

consultants, academics, and interest group officials on the subject matter.

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How Do You Perform a Best Management

Practices Review?

(3) Selecting appropriate organizations for your review.

(4) Collecting data from these selected organizations.

(5) Identifying barriers to change.

(6) Comparing and contrasting processes to develop recommendations.

Understanding the

Government Process

You Want to Improve

The first step in beginning a best practices review is to thoroughly

understand the government process you are reviewing before you go out

to speak with officials in various organizations. This will help not only to

fully understand the process but to recognize opportunities for

improvement. Understanding the process will ease your analysis by

defining a baseline for comparison and providing more focus to your

questions when you make inquiries on the best practices identified in

other organizations. Further, a good depth of understanding is essential to

selecting appropriate comparison companies. Discussing the process in

detail with agency officials and flowcharting the process will facilitate data

gathering from the comparison organizations and the comparative

analysis.

Researching to Plan

the Review

Preliminary planning and research are key elements in preparing a best

practices review; both must be done before selecting the organizations for

comparison. Performing a literature search, researching industry trends,

and speaking with consultants, academics, and industry/trade group

officials will provide valuable background information on the process

under review. It will also provide you with the names of leading edge

companies and public sector organizations.

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How Do You Perform a Best Management

Practices Review?

The people you speak with before selecting the organizations for

comparison can give you useful information on the best practice you are

reviewing, as well as the names of leading edge organizations. They may

also be able to provide you with a contact into an organization. You will

find the names of consultants, academics, and industry/trade groups

during your literature search. Other resources for finding these names

range from telephone book listings of industry groups to faculty rosters for

schools that specialize in the area you are evaluating.

Obtaining company annual reports or other background information on

the organization before your visit will help you to prepare for your

meetings with officials. Most of the leading edge organizations receive

calls from many others to learn about their practices. Therefore, they will

only provide you with a limited amount of time. Having a thorough

background on the issue, including the government’s process, will allow

for an effective use of both parties’ time.

Selecting Appropriate

Organizations

After you have reviewed the literature and after all of your discussions

with consultants, academics, and industry/trade group officials, you will

have compiled a list of many organizations cited as “best” in their

respective industry for the process you are reviewing. The next decision is

determining how many organizations to visit. In our best practices reports,

we visited an average of nine companies per job. Visiting too many

companies can cause “analysis paralysis,” according to benchmarking

experts. These experts say to keep the number of companies to a

manageable number, which can be as low as five.

Officials from each organization that you speak with will also be able to

tell you which companies are the best in a given area. You may want to

add a company to your list if it is one that you keep hearing about. Getting

the names of other leading edge organizations from these officials will also

help to confirm that you selected the right companies to visit and provide

additional leads on others.

Depending on the process under review, you may want to select

companies that are geographically dispersed. We used this criterion for the

selection of companies in the DOD food inventory report. You will need to

determine the criteria that best meet your needs.

Your criteria need not require finding the “best of the best” if the

difference in the process is not significant among leading edge

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How Do You Perform a Best Management

Practices Review?

organizations. In these cases, what is important is to find companies that

are considered by experts to be among the best at the process you are

reviewing. Such companies may be able to give you more time than the

very best, which may be flooded with requests to study them.

Collecting Data From

Selected

Organizations

After you have researched and begun planning your review, you should

develop a list of questions to use as a guide for discussions with the

consultants, academics, and industry/trade group officials. You may need

to refine the questions after these discussions and prior to your first

interview with private sector company or public sector officials. You may

also need to refine the questions again after your first interview with these

officials. A standard list of questions will ensure that you are obtaining

comparable information among the organizations you speak with.

As with the process of the agency you are evaluating, you will need a

thorough understanding of the process in the private sector before you can

compare and contrast the two and make effective recommendations. The

list of questions will help you obtain the information needed from all

sources in order to make a detailed analysis. Your analysis will involve

looking for common practices and characteristics among the organizations

you have identified as having best practices in the selected function you

are reviewing.

Identify Barriers to

Change

A major challenge to ensuring that your final recommendations will be

implemented and effective lies in identifying the barriers to change,

whether real or perceived. Your discussions with agency officials and your

background research should provide information on such potential

sources of barriers as regulatory requirements, organizational culture, and

the impact of the change on the agency and its services.

Government agencies often must operate under many statutory

requirements that do not exist in the private sector. While such regulations

do not always prevent the use of best management practices, they may

make change difficult. For example, DOD officials were concerned that

using private sector distributors to deliver food to base dining halls would

eliminate the participation of small businesses. This concern was

alleviated when we demonstrated that most private sector food

distributors were already small businesses.

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How Do You Perform a Best Management

Practices Review?

Organizational culture may be a major obstacle. In our work, we were

faced with the fact that DOD has been doing business the same way for

over 50 years. Such an entrenched system could make changes difficult to

implement. As a way to encourage and support new ways of operating, we

did a review on how leading edge companies were able to change their

organizational culture in the face of radically new operations. The report

provided an impetus for DOD to think differently. However, this work also

showed that immediate and comprehensive change is unlikely in any

organization: it can take 5 to 10 years or longer to change an organization’s

culture.

A paramount consideration should be the effect of recommendations on

the agency’s future ability to provide its service. For example, if your

review leads to recommending that a function be privatized, you will need

to consider the impact this will have on taking the function away from the

government. You will need to raise—and answer—such questions as what

would happen if a strike should occur at the company that takes on the

function, a natural disaster destroys the company building, or the

company goes out of business. However, it is likely that the private sector

may provide information on these instances since the same events would

equally have an impact on the private and public sectors.

Making

Recommendations for

Change Constructive

and Convincing

The final step in the best practices review is to compare and contrast the

agency’s process to the processes of the organizations you benchmarked,

and to decide whether the agency would benefit from implementing new

processes. If the answer is “Yes,” remember that flexibility is a key theme,

as it may not be possible for the agency to do things exactly as they are

done in the other organizations.

A successful recommendation strategy in our work that encourages the

idea of change is to give the agency a “basket of ideas” from which to

choose and adapt to their unique operations. Demonstrating possible

savings and recommending key steps for change will help to promote that

change. Photographs of the consequences of the government’s process

versus the private/public sector’s process are a convincing tool to illustrate

the effectiveness of a recommended change.

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How Do You Perform a Best Management

Practices Review?

In addition, we have tried to help DOD one step past issuance of the report.

Specifically, we have tried to use the knowledge gained during the review

to help in facilitating the change. For example, we have met formally and

informally with key officials to discuss how the change can be

implemented. We also made presentations to groups affected by the

change. In work such as this, “follow through” means staying in touch and

educating and influencing with whatever assistance can be provided. At

the same time, we maintain our ability to critique the results in a

constructive way.

Perhaps the most convincing argument for implementing

recommendations for radical change lies in the environment of tight

budgets. At DOD, such constraints have forced DOD officials to look toward

new ways to do business and, in turn, save money. Consequently, most

officials have been receptive to many of our streamlining

recommendations.

Page 16 GAO/NSIAD-95-154 Best Practices Methodology
What Else Do You Need to Know?

Much of what we have learned about doing best practices reviews goes

into any evaluation-related work. However, we have some specific

practices that were so useful to us that we created an ongoing list of

helpful tips. These should help in planning the review and in establishing

productive relationships with the selected organizations.

• We used two different approaches to arranging a meeting with the desired

officials of the target organization. First, if you have a contact’s name, you

can call the person directly and request an interview. You might either call

first or send a letter followed up with a call. Second, if you were not able

to obtain a name through the literature or through your discussions with

the consultants, academics, and industry/trade officials, you can contact

the office of the president of the company either by phone or by letter.

This office will be able to direct you to the appropriate official(s). With

either approach, your letter or your phone call should state your purpose

very clearly and ensure them that the information will only be used for

benchmarking.

• Send a copy of the questions to the organization’s officials before your

visit. This will allow them the opportunity to prepare for the meeting,

gather requested information, and invite pertinent personnel. If the list of

questions is long, you may want to consider sending a shorter version.

• After you have set up a meeting time, date, and place, it is best to mail (or

fax) a letter of confirmation. Your questions can be sent with this letter. It

is also a good idea to reconfirm the meeting a few days prior to your

scheduled time. After the meeting, follow up with a thank you letter.

• On average, plan to spend between 1/2 day to a day and 1-1/2 days with the

company. However, the amount of time a company will give you will vary.

DMN’s experiences have run the gamut from a 1-hour phone interview to a

2-week detailed look at a company’s operations.

• If you plan to use the organization’s name in the report, ask for permission.

• Inform all interviewees that you will be providing them with a draft or

relevant portions of the report for their review. This will help ensure that

you correctly interpreted the information obtained from interviews. It also

allows the company the opportunity to ensure that they did not give you

any proprietary information during the interview.

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What Else Do You Need to Know?

• Plan for your review (planning, data collection, and analysis) to take an

average of 12 months. As pointed out above, these reviews take a lot of

up-front work, and getting into leading-edge companies can take a long

time. Nonetheless, we have found that the results of these reviews have

justified the time spent.

• Throughout the review, pay attention to establishing good working

relationships with these organizations. As in any evaluation, this provides

a sound foundation for future contacts.

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Appendix I 

GAO Reports on Best Management Practices

Reengineering Organizations: Results of a GAO Symposium (GAO/NSIAD-95-34,

Dec. 13, 1994).

We conducted a symposium to address private sector best practices in

reengineering in an effort to provide insight into the Department of

Defense’s (DOD) efforts to streamline its business practices. Five principles

for effective reengineering emerged from the symposium, including:

(1) support from top management helps remove barriers to change; (2) an

organization’s culture is receptive to reengineering goals and principles;

(3) major improvement and savings are realized by focusing on the

business from a process rather than functional perspective;

(4) reengineering efforts are based on a clear notion of customer needs,

anticipated benefits and potential for success; and (5) process owners

manage reengineering projects with teams that are cross-functional,

maintain a proper scope, focus on customer metrics, and enforce

implementation timelines.

Commercial Practices: Opportunities Exist to Enhance DOD’s Sales of

Surplus Aircraft Parts (GAO/NSIAD-94-189, Sept. 23,1994).

In fiscal year 1993, DOD’s proceeds from the sale of commercial-type

surplus aircraft parts averaged less than 1 percent of what DOD paid for

them. In contrast, commercial airlines realize proceeds on the order of 

40 to 50 percent. The large difference in proceeds reflects the different

incentives and marketing practices at work within DOD and the private

sector. While DOD is driven by policies designed to dispose of the parts

quickly, commercial companies use marketing techniques that enhance

the visibility and marketability of their parts.

Organizational Culture: Use of Training to Help Change DOD Inventory

Management Culture (GAO/NSIAD-94-193, Aug. 30, 1994).

DOD has acknowledged that to reduce the size and cost of its inventories it

must change its inventory management culture. As reported in an earlier

report, training has been shown to be a key vehicle for helping

organizations change their cultures. However, DOD has yet to take essential

steps for using training to foster change.

Partnerships: Customer-Supplier Relationships Can Be Improved Through

Partnering (GAO/NSIAD-94-173, July 19, 1994).

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Appendix I 

GAO Reports on Best Management Practices

The decision to use a partnership approach in a business relationship is

based on whether the potential partners believe they can benefit from

such a relationship and the benefits outweigh the costs. Partnering that

has been successfully implemented by some companies has resulted in

reduced costs and improved service and quality for both parties. DOD has

recognized the potential benefits of partnering, and the Army Corps of

Engineers has had successful partnership experiences with its contractors

as well as among internal divisions in the Corps.

Commercial Practices: DOD Could Reduce Electronics Inventories by Using

Private Sector Techniques (GAO/NSIAD-94-110, June 29, 1994).

DOD continues to buy and store redundant levels of electronics items,

valued at over $2 billion. During the past decade, many private sector

companies have adopted modern inventory management practices that

have significantly reduced electronics inventories, decreased procurement

times, and saved millions in associated operating costs while improving

the availability of stock. The companies rely on established commercial

distribution networks to manage, store, and directly deliver inventory on a

frequent, regular basis.

Commercial Practices: Leading Edge Practices Can Help DOD Better

Manage Clothing and Textile Stocks (GAO/NSIAD-94-64, Apr. 13, 1994).

DOD continues to store redundant levels of clothing and textile inventories

throughout its wholesale and retail system, with 10 years of supply on

hand for some inventories. Private sector firm have learned to cut costs by

moving to just-in-time inventory concepts that help keep inventories low,

turn stock frequently, fill orders quickly. Many private sector firms and

some federal agencies with uniformed employees are relying on prime

vendors to manage their clothing inventories.

Defense Transportation: Commercial Practices Offer Improvement

Opportunities (GAO/NSIAD-94-26, Nov. 26, 1993).

Commercial shippers have integrated their transportation functions with

the entire logistics process, limiting the number of carriers they use to

those that provide high-quality service at a competitive price, expanding

the use of information technology, and contracting out certain logistics

operations. DOD has acknowledged that it can benefit from transportation

practices performed in the commercial sector and has made some

progress in improving transportation management.

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Appendix I 

GAO Reports on Best Management Practices

Defense Inventory: Applying Commercial Purchasing Practices Should

Help Reduce Supply Costs (GAO/NSIAD-93-112, Aug. 6, 1993).

DOD’s replenishment formula used to compute optimum order quantities

for secondary items is not conducive to today’s business operations

because it is based on some assumptions that are rarely met, such as

constant demand. Private sector companies are using alternative

purchasing methods such as quick response. Even though DOD’s reasons

for holding inventory differ from that of private sector companies, it must

find a balance between inventory depth and supply cost. Commercial

replenishment strategies offer better opportunities for DOD to meet this

balance.

Commercial Practices: DOD Could Save Millions by Reducing Maintenance

and Repair Inventories (GAO/NSIAD-93-155, June 7, 1993).

DOD can reduce maintenance and repair inventories by adopting

commercial practices, such as the use of supplier parks and direct delivery

programs. These practices could reduce unnecessary inventory

requirements at military industrial centers and eliminate the need to store

supplies in the Defense Logistics Agency’s depot system.

DOD Food Inventory: Using Private Sector Practices Can Reduce Costs and

Eliminate Problems (GAO/NSIAD-93-110, June 6, 1993).

The military food supply system, which is generally outmoded and

inefficient, offers the opportunity to achieve cost savings by using private

sector food distributors. Many of the costs DOD incurs for holding,

handling, and transporting large quantities of food are unnecessary

because the existing network of private sector full-line distributors can

supply food to DOD much more efficiently. Because of heavy competition

within the industry, distributors have an incentive to cut costs, keep prices

low, and provide excellent customer service.

Organizational Culture: Techniques Companies Use to Perpetuate or

Change Beliefs and Values (GAO/NSIAD-92-105, Feb. 27, 1992).

An organization’s decision to change its culture—the underlying

assumptions, beliefs, values, attitudes, and expectations shared by an

organization’s members—is generally triggered by a specific event or

situation, such as a change in the world situation or severe budget

reductions. It usually takes a company between 5 to 10 years to make a

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Appendix I 

GAO Reports on Best Management Practices

complete cultural change and involves using a combination of many

techniques. The two key techniques are top management commitment and

training that promotes and develops skills related to desired values and

beliefs.

DOD Medical Inventory: Reductions Can Be Made Through the Use of

Commercial Practices (GAO/NSIAD-92-58, Dec. 5, 1991).

DOD’s health care system can save millions of dollars by increased use of

inventory management practices pioneered by leading civilian hospitals.

These practices include standardization of supplies, electronic ordering,

and just-in-time and stockless delivery programs.

Commercial Practices: Opportunities Exist to Reduce Aircraft Engine

Support Costs (GAO/NSIAD-91-240, June 28, 1991).

The value of DOD’s secondary inventories (including spare parts and

components for aircraft, ships, and general supplies) increased $60 billion

between 1980 and 1988. Both the Air Force and commercial airlines use

the F-108 engine, but DOD bought millions of dollars of excess engines and

spare parts. Commercial airlines estimate their requirements to more

closely reflect actual experience and rely more heavily on the

manufacturer to provide spare parts. The Air Force could benefit from

adopting some commercial practices to prevent the purchase of excess

engines and parts.

Defense Logistics: Observations on Private Sector Efforts to Improve

Operations (GAO/NSIAD-91-210, June 13, 1991).

Private sector firms have found that integrated logistics management can

help reduce costs and increase their competitiveness. Major elements for

successful implementation of integrated logistics management include

total cost analysis and top management commitment. DOD may be able to

benefit from private sector experiences in improving their logistics

operations.

Page 23 GAO/NSIAD-95-154 Best Practices Methodology
Appendix II 

Major Contributors in DMN’s Best

Management Practices Assignments

National Security and

International Affairs

Division, Washington,

D.C.

Uldis Adamsons

Claude T. Adrien

Carolyn S. Blocker

John J. D’Esopo

Thomas W. Gosling

Diane Blake Harper

Joan B. Hawkins

Donna M. Heivilin

John J. Klotz

M. Glenn Knoepfle

Kenneth R. Knouse, Jr.

Kay D. Kuhlman

Marilyn Mauch

F. Earl Morrison

B. Scott Pettis

Nancy L. Ragsdale

Arnett Sanders

George C. Surosky

Nomi R. Taslitt

David R. Warren

Marilyn K. Wasleski

General Government

Division, Washington,

D.C.

Ken Miyamoto

Keith E. Steck

Resources,

Community, and

Economic

Development

Division, Washington,

D.C.

Stephen L. Jones

Page 24 GAO/NSIAD-95-154 Best Practices Methodology
Appendix II 

Major Contributors in DMN’s Best

Management Practices Assignments

Cincinnati Regional

Office

Donald L. Allgyer

Cheryl K. Andrew

Bruce D. Fairbairn

Shari A. Kolnicki

Laurie R. Housemeyer

Matthew B. Lea

Brian T. Mullins

Robert L. Repasky

Richard L. Strittmatter

Detroit Regional

Office

Audrea L. Buck

Robert W. Herman

Daniel J. Martin

Louise N. Roy-O’Connell

Norfolk Regional

Office

Tracy W. Banks

George O. Morse

Johnnie M. Phillips

Harry E. Taylor, Jr.

Office of General

Counsel, Washington,

D.C.

John A. Carter

Michael D. Hipple

(709090) Page 25 GAO/NSIAD-95-154 Best Practices Methodology
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