# C&T reconciles millions through new, audit ready resolution process

/ Published Aug. 5, 2016
PHILADELPHIA, 

A new inventory resolution process is striking a balance between operational effectiveness and audit readiness, impacting millions of dollars for Defense Logistics Agency Troop Support Clothing and Textiles’ operations, a C&T supervisor said.

General supply specialist supervisor Juan Sanchez and his team of 15 resolution specialists have affected $105 million in sales and $80 million in back orders since October 2015, by changing how inventory transaction failures are reconciled.

The fundamental role of a resolution specialist is to ensure material availability for C&T’s military customers, making sure that all transactions are in sync with DLA’s enterprise business systems, Sanchez said.

All transactions, including receipts or shipments, have a dollar value attached to them based on the price and quantity of the items, Sanchez said. A transaction failure occurs when physical inventory, either at a warehouse or with a customer, doesn’t match what is available on EBS. Resolution specialists fix these failures so that customer account specialists can make these items available to customers, he explained.

In preparation for DLA’s upcoming independent public audit, C&T resolution specialists worked with DLA Troop Support’s Process Compliance directorate and accounting contractors from KPMG to analyze transactions, find the root cause of failures and gauge trends to eliminate multiple errors.

“What we do directly impacts the financial statement and that’s what the auditors are going to be looking at,” Sanchez said. “This is just the beginning of what needs to be done.”

Sanchez, who has three years of audit readiness experience, restructured the workload and mindset of the team by encouraging them to be proactive when addressing inventory transaction failures.

Per DLA Headquarters’ instructions, C&T’s resolution specialists are addressing high-dollar value and high quantity transactions first. They have also put together an effective tracking system to measure how many transactions are being processed, their dollar value and a root cause analysis, Sanchez said.

Streamlining the DLA Enterprise Inventory Quantity Reconciliation process results in an increased percentage of reconciled inventories, reduced workloads for resolution specialists and the retention of critical evidentiary matter, Michelle Burke, an Audit Readiness branch chief, said.

“The key to audit readiness is to ensure that we maintain documentation for the reconciliation packages, basically showing the action taken and why,” Burke said. “This is what we mean by having evidentiary matter and [this] is what the auditors will want to see.”

By requiring evidentiary matter for the reconciliation packages, the new process helps ensure all of C&T’s divisions are also audit ready, Sanchez said.

“Collaboration with other areas is key because we are kind of the center of the operation,” Sanchez said. “Everything that fails in contracting, supply or even [technical quality], it comes to us. We have a part in that.”

C&T is the first supply chain to successfully implement the “one-on-one” model, in which skilled KPMG personnel mentor resolution specialists individually, Burke said. The mentors guide the resolution specialists through preparing EIQR packages to improve their methodology and overall quality of the final reconciliation package.

Best practices identified through C&T’s implementation of this model will be reiterated in other DLA Troop Support supply chains, Burke said. Several systemic issues causing inventory deviations between the vendor or military service depots at the enterprise level were also identified and resolved through this process.

“We’ve achieved a lot in a short period of time,” Sanchez said. “I have a great team [and] we have created an environment where everyone on the team can bring their ideas. And most of them have been great ideas because it’s coming from the people who are actually doing the work.”