Inventory Management Centralized Inventory Management of ...

Army Regulation 710?1

Inventory Management

Centralized Inventory Management of the Army Supply System

Headquarters Department of the Army Washington, DC 28 November 2016

UNCLASSIFIED

SUMMARY of CHANGE

AR 710?1 Centralized Inventory Management of the Army Supply System

This major revision, dated 28 November 2016--

o Updates responsibilities (para 1-4).

o Updates Integrated Materiel Management and Stockage Policy (paras 2-1 through 2-24).

o Deletes selected Item Management System-Expanded (formerly chap 3, section III).

o Updates Secondary Item Management Policy (paras 4-1 through 4-17).

o Updates Financial Inventory Management Policy (paras 5-1 through 5-7).

o Adds a note to the stratification process (para 5-3).

o Deletes Reduced Price Initiative (formerly chap 5 section IV).

o Rescinds DA Form 1887 (formerly referenced in paras 5-11 and 5-17).

o Rescinds Army use of DD Form 1138-1 (formerly referenced in para 5-13).

o Updates Army Prepositioned Stocks policy (paras 6-1 through 6-22).

o Updates secondary item metric and data management policies (paras 7-1 through 7-3).

o Updates major item identification policy (paras 8-1 through para 8-13, formerly chap 9).

o Updates major item float and factors policy (paras 9-1 through 9-7, formerly chap 8).

o Updates policy for the standard study number process (paras 10-1 through 106).

o Updates data interchange policy (paras 11-1 through 11-4, formerly chap 14).

o Updates major item system map policy (paras 12-1 through 12-3, formerly chap 15).

o Updates major item distribution policy (paras 13-1 through 13-18).

o Updates Army aircraft distribution, delivery and disposition policy (paras 14-1 through 14-14).

o Adds chapter on Divestiture of class VII major items (chap 15).

o Deletes previous chapter, Total Asset Visibility (chap 16).

o Deletes previous chapter, Data Quality Assessment Execution Program (chap 17).

o Replaces Reduced Price Initiative, with Data Interchange (app B).

o Updates DA Form 5661 (app B).

o Updates DA Form 5662 (app B).

o Replaces Elements in Computing Cost, with War Reserve Secondary Item Process (app C).

o Updates Materiel Category and Structure Code (app D).

o Replaces, Special Program Requirements, with Major Item Management Guide (app E).

o Updates Internal Control and Operational Metrics (app F).

o Converts from legacy to Logistics Modernization Program terms and processes (throughout).

Headquarters Department of the Army Washington, DC 28 November 2016

*Army Regulation 710?1

Effective 28 December 2016

Inventory Management

Centralized Inventory Management of the Army Supply System

History. This publication is a major revision.

Summary. This regulation is a consolidation of several regulations that set policy and procedural guidance for management of secondary and major items, stockage categories, retention levels, financial management, operational and repair cycle float, Army war reserve, and the Automatic Return Item Program.

Applicability. This regulation applies to the Regular Army, the Army National Guard/Army National Guard of the United States, and the U.S. Army Reserve, unless otherwise stated. During mobilization, the proponent may modify chapters and policies contained in this regulation.

Proponent and exception authority. The proponent of this regulation is the

Deputy Chief of Staff, G?4. The proponent has the authority to approve exceptions to this regulation that are consistent with controlling law and regulations. The proponent may delegate this approval authority, in writing, to a division chief within the proponent agency or its direct reporting unit or field operating agency, in the grade of Colonel or the civilian equivalent. Activities may request a waiver to this regulation by providing justification that includes a full analysis of the expected benefits and must include formal review by the activity's senior legal officer. All waiver requests will be endorsed by the commander or senior leader of the requesting activity and forwarded through their higher headquarters to the policy proponent. Refer to AR 25?30 for specific guidance.

Army internal control process. This regulation contains internal controls and identifies key internal controls that must be evaluated (see appendix F).

Supplementation. Supplementation of this regulation and establishment of command and local forms are prohibited without prior approval from the Deputy Chief of Staff, G?4 (DALO?SPS), Washington, DC 20310?0546.

Suggested improvements. Users are invited to send comments and suggested improvements on DA Form 2028 (Recommended Changes to Publications and Blank Forms) directly to Director, U.S.

Army Logistics Innovation Agency (LOIA?AP), 5870 21st Street, Building 212, Fort Belvoir, VA 22060?5941.

Committee management. AR 15?1 requires the proponent to justify establishing/continuing committee(s), coordinate draft publications, and coordinate changes in committee status with the U.S. Army Resources and Programs Agency, Department of the Army Committee Management Office (AARP?ZA), 9301 Chapek Road, Building 1458, Fort Belvoir, VA 22060?5527. Further, if it is determined that an established "group" identified within this regulation, later takes on the characteristics of a committee, as found in the AR 15?1, then the proponent will follow all AR 15?1 requirements for establishing and continuing the group as a committee

Distribution. This publication is available in electronic media only and is intended for command levels C, D, and E for the Regular Army, the Army National Guard/Army National Guard of the United States, and the U.S. Army Reserve.

Contents (Listed by paragraph and page number)

Chapter 1 Introduction, page 1

Section I Purpose, References and Explanation of Abbreviations and Terms, page 1 Purpose ? 1?1, page 1 References ? 1?2, page 1

*This regulation supersedes AR 710?1, dated 20 September 2007

AR 710?1 ? 28 November 2016

i

UNCLASSIFIED

Contents--Continued

Explanation of abbreviations and terms ? 1?3, page 1

Section II Responsibilities, page 1 Assistant Secretary of the Army (Acquisition, Logistics and Technology) ? 1?4, page 1 Assistant Secretary of the Army (Financial Management and Comptroller) ? 1?5, page 1 Chief, National Guard Bureau ? 1?6, page 1 Deputy Chief of Staff, G?3/5/7 ? 1?7, page 2 Deputy Chief of Staff, G?4 ? 1?8, page 2 Deputy Chief of Staff, G?8 ? 1?9, page 3 Chief, Army Reserve ? 1?10, page 3 The Surgeon General ? 1?11, page 3 Assistant Chief of Staff for Installation Management ? 1?12, page 4 U.S. Army Training and Doctrine Command ? 1?13, page 4 Army Materiel Command ? 1?14, page 4 U.S. Army Special Operations Command ? 1?15, page 6

Chapter 2 Integrated Materiel Management and Stockage Policy, page 6

Section I Integrated Materiel Management, page 6 Overview ? 2?1, page 6 Integrated materiel management ? 2?2, page 6 Criteria for assigning item management codes ? 2?3, page 7 Interchangeability and substitutability ? 2?4, page 8 Inactive and dormant item management ? 2?5, page 8

Section II National Stockage Criteria, page 8 Stockage review frequency ? 2?6, page 8 Part-numbered items ? 2?7, page 8 Part Number Conversion Program ? 2?8, page 9 Local purchase items ? 2?9, page 9 Management determination logic schematic ? 2?10, page 9 Cost differential ? 2?11, page 12 Numeric stockage objective and insurance items ? 2?12, page 13 Diminishing manufacturing sources and materiel shortages ? 2?13, page 13 Life-of-type buys ? 2?14, page 13 Assignment of the acquisition advice code ? 2?15, page 14

Section III Materiel Support Requests, page 14 Supply support requests ? 2?16, page 14 Stockage alternatives ? 2?17, page 17 Depot maintenance repair parts support ? 2?18, page 18 Non-consumable item materiel support requests ? 2?19, page 18

Section IV Transfers of Assets, page 18 Transfers within the Army ? 2?20, page 18 Transfers between the Army and other Services ? 2?21, page 18 Transfers to allied forces ? 2?22, page 19 Transfers to Federal agencies outside the Department of Defense ? 2?23, page 19 Transfers of cryptological materiel ? 2?24, page 19

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AR 710?1 ? 28 November 2016

Contents--Continued

Chapter 3 Inventory Management Control Programs, page 19

Section I Component Items within Equipment Assemblages, page 19 Assemblage and component policy ? 3?1, page 19 Managing assemblages and components ? 3?2, page 19

Section II Positioning of Stocks, page 20 Secondary item assets ? 3?3, page 20 Class V ? 3?4, page 21 Requirements for additional storage facilities and services ? 3?5, page 22

Section III Automatic Return Items, page 22 Automatic Return Item List code ? 3?6, page 22 Applicability of automated return items ? 3?7, page 22 Automated return item policy ? 3?8, page 22 Automatic return item objectives ? 3?9, page 23 Automated return item selection criteria ? 3?10, page 23 Field maintenance level retention criteria for automated return items ? 3?11, page 23 Automatic return procedures ? 3?12, page 23 Receipt of automated return items at national/wholesale level ? 3?13, page 24 Credit for return of Supply Management, Army items ? 3?14, page 24 Disposition of automated return item components of major items ? 3?15, page 24

Section IV Centralized Ammunition Management, page 24 Overview ? 3?16, page 24 Concept ? 3?17, page 24 Objectives ? 3?18, page 25 Responsibilities (Outside and Inside the Continental United States) ? 3?19, page 25 Execution (Outside and Inside the Continental United States) ? 3?20, page 25 Reports ? 3?21, page 27 Automated tracking ? 3?22, page 27

Section V Special Commodity Control Programs, page 28 Obsolete or excess end items and threat representative targets ? 3?23, page 28 Management of reusable containers ? 3?24, page 29

Section VI Recycling Excess Materiel Inventory/Reclamation at the National/wholesale Level, page 32 Defense Logistics Agency Disposition Services reissue process ? 3?25, page 32 Introduction to reclamation ? 3?26, page 32 Reclamation roles ? 3?27, page 32 Reclamation policy ? 3?28, page 32 Reclamation funding ? 3?29, page 33 National/wholesale inventory control point functions for routine reclamation ? 3?30, page 33 Supply functions at the depot for routine reclamation ? 3?31, page 36 Life Cycle Management Command functions for priority reclamation ? 3?32, page 36 Supply functions at the depot for priority reclamation ? 3?33, page 37 DA Form 7420, Parts Reclamation List ? 3?34, page 37

AR 710?1 ? 28 November 2016

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Contents--Continued

Chapter 4 Secondary Item Requirements, Inventory and Supply Chain Management, page 40

Section I Requirements and Demand Forecasting, page 40 Inventory categories, approval thresholds and data retention ? 4?1, page 40 Demand planning, supply planning and data integrity ? 4?2, page 42 Coverage profile and procurement/repair lead-times ? 4?3, page 42

Section II Retention Management, Credit Policy and Supply Chain Metrics/Parameters, page 43 National/wholesale retention policy ? 4?4, page 43 Credit for assets returned to the national/wholesale echelon ? 4?5, page 44 Global planning parameters ? 4?6, page 44

Section III Acquisition Strategies and Supply Chain Management, page 44 Acquisition strategies ? 4?7, page 44 Supply chain management ? 4?8, page 46

Section IV Provisioning and Phase-Out Segments of the Item Lifecycle, page 47 Provisioning phase of the item lifecycle ? 4?9, page 47 Phase-out segment of the item lifecycle ? 4?10, page 47 Interim contractor support ? 4?11, page 48

Section V Other Centralized Secondary Item Inventory Management Topics, page 48 Supply performance analyzer ? 4?12, page 48 Requirements computation for spare engines ? 4?13, page 48 Item unique identification ? 4?14, page 48 Non-Army Managed Item Program ? 4?15, page 48 Counterfeit parts ? 4?16, page 49 Management of other item manager assets on Army records ? 4?17, page 49

Chapter 5 Financial Inventory Management, page 50 Scope ? 5?1, page 50 Materiel Category Structure Code ? 5?2, page 50 The stratification process ? 5?3, page 50 Special instructions on reparable items ? 5?4, page 50 Central secondary item stratification for budget ? 5?5, page 51 Objectives of reporting inventory valuations ? 5?6, page 53 Inventory valuation reports ? 5?7, page 53

Chapter 6 Management of Army Prepositioned Stocks, page 55

Section I Overview, page 55 Introduction ? 6?1, page 55 Army Prepositioned Stocks roles ? 6?2, page 56 Security classification ? 6?3, page 58

Section II Release and Use of Army Prepositioned Stocks, page 59

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AR 710?1 ? 28 November 2016

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