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Armed Forces Business Guide

11Documented Cases
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All 11 Documented Cases

Excess Medical Inventory and Buffer Stock in Military Treatment Facilities

Several million dollars per year across the DLA medical supply chain and Army medical treatment facilities due to over‑stock, obsolescence, and expiry (exact enterprise dollar figure not disclosed, but stock-keeping units were cut from ~1,600 to 1,100 to reduce carrying costs, indicating large recurring savings and corresponding prior losses).

Military medical units historically maintain large buffer stocks of medical supplies to guarantee readiness, leading to excess, slow-moving, and expiring inventory. Studies of the Defense Logistics Agency (DLA) Medical Supply Chain and Army medical logistics document significant over‑stock and subsequent rationalization programs to cut items and move toward just‑in‑time models, implying prior recurring waste.

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Regulatory and Policy Non‑Compliance Risk in Military Medical Distribution

Typically in the hundreds of thousands of dollars per year across large commands for remediation projects, additional inspections, training, and system upgrades triggered by audit and compliance findings in medical supply operations.

NATO and DoD medical distribution standards require strict compliance with Good Distribution Practice, national laws, and internal regulations for pharmaceuticals and medical devices; breaches can trigger regulatory findings, forced corrective actions, or constraints on operations. While financial penalties are often absorbed as internal remediation costs rather than external fines, repeated audit deficiencies drive ongoing spend on corrective programs and additional oversight.

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Poor Sourcing and Inventory Decisions from Limited End‑to‑End Visibility

Several million dollars per year in avoidable spend and opportunity cost across the DoD medical supply chain, inferred from the scale of optimization initiatives and system‑modernization investments aimed at correcting prior inefficiencies.

DoD and Army medical logistics policies emphasize the need to align information systems, establish performance metrics, and conduct medical materiel management studies, implying that incomplete and fragmented data have historically led to suboptimal purchasing and stocking decisions. Without integrated visibility from supplier to point of care, commands risk over‑buying some items while under‑stocking others or selecting non‑standard products.

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Operational Capacity Loss from Inefficient Medical Logistics and Delayed Deliveries

Lost productivity and mission impact equivalent to several million dollars per year across the enterprise when surgeries or treatments are delayed and personnel are underutilized due to missing supplies (queueing and optimization research on military medical logistics is funded precisely because these inefficiencies are material).

Analytical studies on military medical logistics describe historically linear supply chains and long lead times that reduce the ability to respond quickly to medical demand, causing stockouts in some locations and over‑stock elsewhere. This mismatch results in reduced treatment capacity, rescheduled procedures, and diverting clinical staff time to workaround sourcing.

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