Department of Defence Chief Logistics 1 EXCESSIVE STOCK MANAGEMENT WITHIN THE DEPARTMENT OF DEFENCE Portfolio Committee on Defence 26 August 2003.

Department of Defence Chief Logistics

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EXCESSIVE STOCK MANAGEMENT WITHIN THE DEPARTMENT OF

DEFENCE

Portfolio Committee on Defence

26 August 2003


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DOD DELEGATIONPresenter:Major General T.A. Ntsibande - Chief Logistics

Representatives:SA Army – Brigadier General I.R. JohnsonSA Air Force – Major General E.H. DertSA Navy – Rear Admiral (JG) T.M. ButlerSAMHS – Brigadier General H. WallisDOD Log Sup Fmn – Brigadier General B. LinksLogistics Division – Colonel M.J. Craig


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AIM

To inform the Portfolio Committee on Defence on the progress made with the management of excessive stock in the DOD


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SCOPE• History

– Modus Operandi

• Current status within the DOD– ARMSCOR initiative– Present Situation– Problems encountered

• Current actions taking place in– SA Army– SA Air Force– SA Navy– SA Military Health Service


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HISTORY

• 1998 Auditor General report• SCOPA• Reasons originally given for

excessive stock position– Weapon and equipment stockpiling

during embargo period– Transformation process– DOD still determining new Force

Design


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Modus Operandi

• Each Service and Division manages own disposal plans

• Reports progress on a monthly basis to Chief Logistics

• Progress managed at top level

• Streamlined disposal process

• Use ARMSCOR as disposal agent


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CURRENT STATUS

• During 2003/2004 financial year 171 disposal plans are being managed to the total value of RB 4,812.

• Plans are being managed by– SA Army: 31 Plans – RB 2,445– SA Air Force: 98 Plans – RB 1,695– SA Navy: 34 Plans – RM 643,2– SAMHS: 8 Plans – RM 29,229


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Armscor Initiative

• ARMSCOR presently being used as an agent to manage all Cat 1 equipment that is to be disposed of, on behalf of the DOD.


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Present Situation• Disposals

– 3 Auctions – RM 5.1– 11 Tenders – RM 4.9– Donations to Namibia (144mm ammo)RM 90,45 (2 839 tons)

• ARMSCOR– 102 transactions Stock Sales – RM 155 – Stock Transfer of Cat 1 equipment - RM 325

• Problems– Ammo Disposal Plant– NCACC– Ledger values


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Problems Encountered• Ammo Disposal Plant

– 141 000 tons of ammunition– Average age – 17 years old– 90% out of manufacturers warranty (10 -11 years)– 67 000 tons expired, obsolete, redundant, re-workable,

or un-serviceable– Safety not guaranteed by manufacturer– Need a safe environmentally friendly disposal

capability– Request for proposal to industry on 4 Jul 2003– Response has been received

• NCACC– Local buyers have to register with NCACC – lengthens

process


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SA ARMY

Down Managing of Excessive Stock


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SA ARMYCURRENT SITUATION• The SA Army’s only approved force

structure is that of the transitional force design.

• Until such time as the affordable structure is approved no responsible down scaling can be done of (any) serviceable equipment.

• For this reason only obsolete and beyond economical repair equipment to the book value of RB 2.445 has been programmed for disposal.


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SA ARMYAPPROACH TO DISPOSAL • The main focus of effort concentrated on

the Auditor Generals concern that in the SA Army’s case there is excessive stock in the depots.

• With this in mind armoured vehicles, air defence and vehicle platforms were concentrated on to decrease the monetary value of the stock.

• Other systems will be handled concurrently with the view to decreasing the number of items.


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SA ARMYARMOURED VEHICLE SYSTEMS • The Army has standardised on the following

Armoured systems Ratel Mk 3, Rooikat Mk 1 (Lot 3) and Olifant Mk 1A for the medium term and Olifant Mk 1 B for the long term..

• Ratel Infantry Fighting Vehicle MK 1&2 (99) RM 325 (31 Oct 02 – 29 Aug 03).

• Ratel Mk3 Infantry Fighting Vehicle 3 (100) RM 320 (sold).

• Ratel Mk 3 Infantry Fighting Vehicle (155) RM 487 (30 Jun 03 –26 Sep 03).


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SA ARMYARMOURED VEHICLES (CONT) • Rooikat Armoured Car PPM (28) RM 196 (3

Mar 03 – 25 Nov 04).• Rooikat Armoured Car Mk 1 (6) RM 84 (3

Mar 03 – 27 Feb 04).• Eland Armoured Car (80) RM 23.5 (on

marketing list 27 Apr 03).• Olifant Tanks Mk 1A (14) RM 68 (on

marketing list 25 Mar 03).


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SA ARMYINFANTRY • After previous widely publicised disposal

efforts very little remained. The routine expiry of parachutes for safety reasons were also included

• Rifle Magazines ( 134 000) RM 6 (On stock list)

• Parachutes (2 300) RM 2 (3 Sep 03 -11 Nov 03)


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SA ARMYARTILLERY

• The GV1 25 pdr down graded to ceremonial and burial duties only the last remnants of the 140mm not donated to Angola

• GV2 140 mm Gun ( System) RM 9 (3 Apr 03 -27 Feb 04)


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AIR DEFENCE ARTILLERY


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SA ARMYAIR DEFENCE ARTILLERY • The Air Defence has standardised on the 35 mm

Mk 5 system and all other systems now obsolete

• 35 mm Mk 1 System (100 Guns) RM 1,103 (19 Mar 03 – 2 Feb 04).

• 20 mm (117 Guns) RM 115 (4 Mar 03 – 2 Feb 04).

• 14.5 mm (24 Guns) RM 6 (4 Mar 03 – 2 Feb 04).

• 23 mm (32)m RM 96 ( 29 Jul 03 – 20 Jun 07).


20AIR DEFENCE ARTILLERY


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SA ARMYCLOTHING • Major effort here was to rid the SA Army of

the remaining odd sizes of Nutria clothing not enough to issue even a single units intake.

• Nutria Clothing (System) RM 41 (On stock list)

• Obsolete Women's Clothing (Various) RM 7 (20 Jul 03 - 29 Mar 04)

• General Commodities (Various) RM 9 (20 Jul 03 - 29 Mar 04)


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SAMIL TRUCK


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SA ARMY B VEHICLES

• Samil Vehicles in Vehicle Reserve Park (1704) RM 283

(Transferred to Armscor for sale)

• Samil Vehicle Spares (Various) RM 64 (2004/2005)

• Samil Vehicles at Units (1,049)

RM107 125 978 (2004/2005)


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SA ARMY

C VEHICLES

• 580 C Vehicles will be phased out in the short to medium term

• C Vehicles (73) RM 3 191 000 (12 Feb 03-15 Aug 03)


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SA ARMY

FUTURE INTENT

• As soon as the Affordable Force has been approved by the Minister the SA Army will determine surpluses and initiate a second major wave of disposal


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SA AIR FORCE

Management of excessive stock


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SA AIR FORCE• Imperatives

– SCOPA resolutions

– Treasury Regulations

– Revenue accrued from sales

• 98 disposal plans– Consolidated into 7 groups

• Total value – RB 1,695


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Impala Mk II


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SA AIR FORCE

• Impala Mk I and Mk II aircraft– 38 aircraft, 11 on tender in Mar 03– NCACC authority awaited– Start date – 15/1/1997– Expected end date – 31/12/2003– Value – R5 430


30Mirage F1


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SA AIR FORCE

• Mirage F1 aircraft– 21 aircraft including spares– Gabon interested in 6 aircraft– Start date – 09/09/1997– Expected end date – 31/12/2003– Value – RM 520


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Cheetah C and D


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SA AIR FORCE

• Cheetah C and D aircraft– 3 Cheetah D dual seat aircraft– 17 Cheetah C single seat aircraft– Brazil interested in 14 aircraft– Start date – 12/03/1999– Expected end date – 31/12/2003– Value – RM 2 (Cheetah D)– Value – R 0 (Cheetah C)


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Alouette III


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SA AIR FORCE• Alouette III Helicopters

– 3 aircraft– 7 stripped down airframes– Stripped down airframes on tender in

March 03– Awaiting NCACC authority– Start date – 06/02/2002– Expected end date – 31/12/2003– Value – RM 1


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BOEING 707


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SA AIR FORCE

• Boeing 707 aircraft– 2 aircraft including spares– Spanish firm registered interest– Need to return aircraft to flying

condition. ARMSCOR investigating– Start date – 06/02/2002– Expected end date – 31/12/2003– Value – RM 1


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C-47 Dakota TP


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SA AIR FORCE

• C-47 TP Dakota aircraft– 2 aircraft – 1 fuselage– 2 aircraft recently sold. Finalising

sale.– Start date – 01/02/2002– Expected end date – 31/12/2003– Value – RM 6


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SA AIR FORCE

• Spares, engines, armament and tools

– 40 plans

– 11 plans on tender in Mar 2003

– Start date – 01/06/2002

– Expected end date – 31/12/2003

– Value – RB 1,135


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SA NAVY

Excessive stock management


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SA NAVY

Current situation:– Qty 34 disposal plans

consolidated into 7 groups (sub-plans) to value of RM 643,2.


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SA NAVY• Current actions taking place:

– Ordnance Spares at Depots (7 sub-plans)• EOD/IEDD Equipment• Mk 44 Torpedoes• Non Ops Small Arms• R4 Rifle Accessories• 40/60 Weapons System• Gun Mountings 40/60 Mk 5• 20mm Guns and Mountings


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SA NAVY

– Ordnance Spares at Depots (cont)• Start Date: 28/09/00• End Date: 30/09/03• Value: RM 2,29 (excluding 40/60

Weapon System as value still awaited)


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Minesweepers


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Minesweeper


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SA NAVY– TON Class Minesweepers (6 sub-

plans)• SAS KIMBERLEY (platform)• SAS EAST LONDON (platform)• SAS WINDHOEK (platform)• SAS WALVISBAAI (platform)• Influence Sweep Gear• Minesweeper Inventory

– Minesweepers• Start Date: 18/07/00• End Date: 22/10/02 (sold on tender)• Value: RM 2,6


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SA NAVY– Minesweeper Influence Sweep Gear

• Start Date: 18/07/00• End Date: 22/11/02 (to be sold on

tender)• Value: R380 184

– Minesweeping Inventory• Start Date: 03/04/00• End Date: 26/03/04• Value: Awaited


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Strike Craft


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SA NAVY– Warrior Class Strike Craft (10 sub-plans)

• SAS JAN SMUTS (platform)• SAS SHAKA (platform)• SAS SEKUKHUNE (platform)• SAS RENE SETHREN (platform)• SAS ADAM KOK (platform)• SAS ISAAC DYOBHA (platform)• SAS GALESHEWE (platform)• SAS JOB MASEGO (platform)• SAS MAKHANDA (platform)• Strike Craft Inventory


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SA NAVY (cont)

– Strike Craft• No 1- 3 No 4 No 5 No 6 No 7- 9• Start Date: 03/10/01 03/10/01 01/10/04 01/01/04

02/07/07• End Date: 20/12/02 16/09/09 11/05/05 07/09/06 05/06/09• Value: RM 90,0 RM 30,0 RM 30,0 RM 30,0 RM 90,0

– Strike Craft Inventory• Start Date: 07/01/08• End Date: 11/12/09• Value: Awaited


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SAS SPEAR


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SAS SPEAR


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SAS SPEAR

13 July 2003


5524 July 2003

SAS SPEAR


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SAS SPEAR

28 July 2003


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SA NAVY– Daphne Class Submarines (5 sub-plans)

• SAS SPEAR (platform)• SAS UMKHONTO (platform)• SAS ASSEGAAI (platform)• Submarine Spare Inventory• Submarine Weapons (Torpedoes)

– Submarines• No 1 (sold) No 2 No 3 • Start Date: 15/02/01 16/06/02 16/09/02 • End Date: 08/11/01 13/05/04 11/05/04 • Value: RM 120,0 RM 120,0 RM 120,0


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SA NAVY– Submarine Spares Inventory

• Start Date: 01/04/02• End Date: 14/05/04• Value: Awaited

– Submarine Weapons (Torpedoes)• Start Date: 01/08/03• End Date: 14/05/04• Value: Awaited


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SA NAVY– Support Ships (1 sub-plan)

• SAS FLEUR (platform)– Start Date: 21/07/03– End Date: 12/03/04– Value: RM 2,5

– Small Boats (5 sub-plans)

• Harbour Patrol Boats (donation qty 4)• Deutsche Schlauchbote (DSB’s) • Ferry “Malgoga”• Delta Boats (Qty 6)

• Vredenburg Boats (Qty 4)


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SA NAVY (cont)

– Small Boats (cont)• Harbour Patrol Boats (2 donated, 2 to be donated)

– Start Date: 15/01/02– End Date: 12/03/04– Value: R720 000

• Deutsche Schlauchbote (DSB’s)– Start Date: 03/06/02– End Date: 28/11/03– Value: Awaited

• Ferry “Malgoga”– Start Date: 03/06/02– End Date: 29/08/03

– Value: R300


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SA NAVY (cont)

– Small Boats (cont)• Delta Boats (qty 6)

– Start Date: 05/08/02– End Date: 29/08/03– Value: R538 188

• Vredenburg Boats (qty 4)– Start Date: 16/06/02– End Date: 18/09/03– Value: R299 596


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SA NAVY– Obsolete Depot Stock (ongoing)

• Bill of Material (BOM) Project by linking items of supply (IOS) to next higher assembly. IOS, which cannot be linked to an end use by means of the BOM, would therefore be candidates for disposal.

• As process is being progressed in a fragmented, but continuous manner.

• Total value to date and forwarded to the DOD Log Support Formation for disposal action is RM 3,868.


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SA MILITARY HEALTH SERVICE

Excessive stock management


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SA MILITARY HEALTH SERVICES

• Current situation:

8 disposal plans consolidated into 7 groups (sub-plans) to value of RM 29,229


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SA MILITARY HEALTH SERVICES• Disposal Plans:

– Nutria Material R985 795

– Nutria Uniforms RM 6,2

– Vehicles SAMHS R729 151

– Signal Equipment Unknown

– Rinkhals Ambulances RM 19,8

– Metro Ambulances RM 1,33

– B and D SAMHS Vehicles Unknown

– Old SAMHS rank insignia R178 000

– Total value: RM 29,22


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QUESTIONS?


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Thank You!

Department of Defence Chief Logistics 1 EXCESSIVE STOCK MANAGEMENT WITHIN THE DEPARTMENT OF DEFENCE Portfolio Committee on Defence 26 August 2003.

Documents

chief logistics progress

dod slide

process slide

excessive stock slide

sa armys

disposal agent slide

plans rm

sa army brigadier general