Original Date: 09/15/1997
Revision Date: 01/18/2007
Information : Reduction In Depreciation Costs
Tooele Army Depot (TEAD) realized that depreciation costs for installation operating equipment and property book items were extremely high, contributing to inflated labor rates. This induced TEAD to seek improvement in the reduction of depreciation costs by having the Equipment/Property Division furnish a depreciation listing to all hand receipt holders. The receipt holders were to then make a determination on the retention requirements based on current and scheduled workloads, versus the nice to-have-but-seldom-used concept. The equipment no longer needed would then be used for transfer, turn-in, or adjustment.
The new process established by TEAD continues to monitor and challenge equipment requests and new purchases for validity. Additionally, all equipment users are required to justify under-utilized equipment on a yearly basis to the Depot Commander in accordance with TEAD's Equipment Utilization Management Plan.
TEAD saved more than $800 thousand in yearly depreciation costs associated with this equipment. An additional reduction in Depot labor rates of approximately $2.67 per man-hour was realized by transferring equipment to other installations or tenant activities (activities that were originally the users of the equipment), turning in items not utilized, and adjusting items that had not been entered into the Defense Property Accountability System. This is a valuable cost reduction innovation plan to reduce and maintain lower overhead costs.
For more information see the
Point of Contact for this survey.