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terial off-loaded was 1,563 line items which generated a fleet credit of $36,357 because Navy inventory managers were in a buy position for materials offloaded from this destroyer. In the supply overhaul, 4,068 line items were found to be partially or totally deficient at an aggregate cost of $62,541. The cost to accomplish this was 392 man-days (216 military plus 176 civilian) at an estimated total cost of $6,112. As the program evolves performance standards will be developed ; 101 active ships are scheduled for supply availabilities in fiscal year 1959 and 279 ships in fiscal year 1960. Results have been gratifying to date 6. A float electronic accounting machine (EAM) requisitioning

Based on extensive tests conducted with Atlantic and Pacific Fleet units in conjunction with selected shore stations, the Navy has developed a standard EAM card requisitioning system for use by all fleet units. This improved system will be implemented during January 1959 in the Atlantic Fleet and by April 1 in the Pacfiic Fleet. It is anticipated that the use of EAM requisitioning will be extended to cover shore station transfers and internal ship and shore station requisitions during calendar year 1959. It is estimated that EAM requisitioning afloat, will effect savings in forms alone approximating $700,000 per year. 7. Coordinated shipboard allowance lists

The coordinated shipboard allowance lists (COSAL's) were effectively used in the processes of verifying ships, installed equipments and purifying onboard allowances of technical repair parts. The indexes and stock number sequence lists of the COSAL's provided the fleet with the tools for efficiently accomplishing the much-needed actions of verification and purification. COSAL provides the ships with a single management tool which has increased supply readiness ca. pability. COSAL also eliminates the necessity of searching many publications for requirements and increases purification of equipments and parts, thus providing added savings. To date, 239 ships have been provided individual COSAL's. The target date for all ships is June 30, 1960. 8. Use of electronic data processing machines in supply management

The Bureau of Supplies and Accounts is continuing its program to install electronic data processing (EDP) systems at all of its activities where the size of inventories and volume of business justifies. The Navy has recognized that the full development of the integrated supply system is dependent upon the capacity for processing millions of transactions affecting inventory management decisions. Efforts have been directed toward utilizing equipments which can best serve the purpose of providing responsive and efficient supply support to the operating fleet. During the period July-December 1958, electronic data processing equipments have been installed at the Submarine Supply Office, the Navy Ships Store Office, and the Naval Supply Depot, Bayonne. Proposals have been developed and approved for installation of EDP systems at the Naval Supply Center, Norfolk, and the Naval Supply Center, Oakland, the yards and dorks supply office, and the ordnance supply office. The new installations of EDP equipment have made possible the implementation of transaction reporting. It is expected that significant reductions in investment levels will follow. Budget forecasting, inventory stratification, shipboard allowance preparation, and main. tenance of technical records are more timely and realistic. The recent crisis in the Near East demonstrated the advantages of EDPM's in making an orderly expansion of supply support in the event of mobilization. 9. Stock coordination program-Accelerated item reduction program

The Department of Defense accelerated item reduction (AIR) program mas implemented in Navy during the year. This program is designed to effect a reduction in the number of items in the military supply system on a speed up basis. The first step of this program involves status coding by inventory man agers: i.e., distinguishing between active, inactive, discontinued, and to be discontinued items, etc. The supply demand control points completed review and status coding of 269.898 items during the year. As a result of this review and item status coding. 23,974 items were eliminated from the Navy supply system.

Step IV of the AIR program is designed to accomplish shortcut standardization of housekeeping and administrative type items in 24 Federal supply classes. The Office of the Secretary of Defense assigned responsibility for six of these classes to the Navy in a memorandum dated January 10, 1958. Standardization de

cisions apply to all military services. During calendar year 1958 the following was accomplished: Number of items in 6 FSC classes assigned to Navy

21, 412 Number of items deleted (inactive, obsolete, etc.).

10, 430 Number of items to be reviewed for standardization.

10, 982 Number of items reviewed in calendar year 1958.

7, 121 Number of items determined to be standard

2, 084 Number of items determined to be nonstandard

5, 037 Number of items remaining to be reviewed.-

3, 861 10. Marine Corps Supply Center, Albany

The Electronics Section, by the use of radiography to supplement the magnaflux and borescope method of inspection of gun tubes, has saved the rejection of approximately 15 gun tubes in 3 months that were serviceable but because of surface flaws would have been rejected, at a total savings of $60,000. 11. Rehabilitation of material

The rehabilitation programs for Bureau of Ships controlled material in 1958 have resulted in restoration of approximately $33 million of “unfit for issue" material to “good as new” condition. The rehabilitation, costing $12 million, has offset new procurement by providing equipments to meet known requirements. Since present-day replacement costs for the restored equipments are normally much higher than the book value quoted, the savings are substantially greater than the figures shown above.

(NOTE.—Similar statements with respect to the Department of the Army and the Department of the Air Force may be found on pp. 444 and 938, respectively.)

LIST OF WITNESSES

Abrams, Brig. Gen. C. W..
Amory, R. W.-
Beardsley, Rear Adm. G. F.
Bogart, Brig. Gen. T. F.
Brucker, Hon. W. M-
Burke, Adm. Arleigh.
Cabell, Gen. C. P---
Campbell, Brig. Gen. F. P-
Colglazier, Maj. Gen. R. W., Jr.
Donnelly, Maj. Gen. H. C----
Douglas, Hon. J. H.-
Dulles, A. W-
Ensey, Rear Adm. Lot..
Evans, Col. D. L., III.
Ferguson, Maj. Gen. James.
Ferguson, Col. R. E.---
Friedman, Brig. Gen. R. J.
Garlock, L. S.----
Gates, Hon. T. S., Jr.---
Gayler, Capt. N. A. M-
Glass, Henry-
Gray, Capt. L. P-
Guest, Capt. W. S--
Lanham, Capt. H. P-
Lanman, M. H..
Logan, H. R----
JacIntyre, Hon. H. A-
McElroy, Hon. Leil---
Miller, Rear Adm. F. B..
Moore, Maj. Gen. R. S.
Munn, Maj. Gen. J. C.
Pate, Gen, R. McC.
Rasmessen, Col. E. B.
Seawell, Col. W. T.---
Soughton, Brig. Gen. T. R_-
Taylor, Gen. M. DC.
Traub, Maj. Gen. D. W.
Twining, Gen. N. F.
Warner, J. S.---
Webster, Maj. Gen. B. J..
Weller, Maj. Gen. D. M.
White, Gen. T. D---
Wieseman, Brig. Gen. F. L---
Wood, Maj. Gen. R. J----

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