[This article was first published in Army Sustainment Professional Bulletin, which was then called Army Logistician, volume 3, number 2 (March–April 1971), pages 26–27. The text, including any biographical note, is reproduced as faithfully as possible to enable searchability. To view any images and charts in the article, refer to the issue itself, available on DVIDS and the bulletin’s archives at asu.army.mil/alog/.]
There are a number of methods and techniques a manager may use to evaluate the status of a particular project. One of these management tools — the dropout chart — is keyed to managing the exception. Its successful use in identifying and isolating problem areas is described here.
IN THE LOGISTICS FIELD, we have been thoroughly indoctrinated in the principle of management by exception. We establish the operational boundaries and then expend only enough effort to keep our material within these bounds. It is the exceptions, the items that exceed acceptable limits, on which we concentrate our efforts.
In the overall management of weapons systems, it is frequently necessary and desirable to direct attention to a specific group of related items. We want to tailor the listing (the established stock level for each item of supply) to our own special needs and to establish our own criteria for review. Our objective is to look at the supply status of each item, to find out which items are within the boundaries of our review criteria, to isolate the items with problems, and to identify the problems.
Although there are automated systems for producing reports on large groups of items, these are usually sophisticated reports with stereotyped formats and parameters and often general in nature. We have found the dropout chart (fig. 1) to be a valuable tool for our review purposes.
The dropout chart was designed so that as the items are reviewed, those with specific problems drop out of the mainstream into the NO blocks. Thus, all the good guys stay on the YES side, and the problem children are sorted out into their respective problem boxes on the NO side. We now know which items are in good condition, which items have problems, and what those problems are.
Chart Can Expand
The format illustrated in this article is for a group of items managed mainly by one inventory control point. For expansion, additional segments similar to that shown for the U.S. Army Tank-Automotive Command (USATACOM) can be added to accommodate other inventory control points.
We investigated the supply status of all the fillers used in the M60-series tanks. First, we compiled a list of all the fillers, showing the stock number, nomenclature, and vehicle component affected.
Next, we interrogated the computer for item master data records (IMDR’s) so that we could review the supply status of each filter with a different Federal stock number. Of the 27 types of filters involved, the initial review showed 25 were managed by USATACOM and two by the Defense Supply Agency. Of the 25 USATACOM filters, we found IMDR’s for 21. The four filters without IMDR’s presented our first problem. The other 21 filters all had supply requirement levels established and recorded, thus enabling the computer to perform its management functions. However, four of the 21 filters did not have stock on hand equal to or greater than the safety level. This was the second problem. The remaining 17 filters were found to have at least the minimal stock on hand and due in to exceed the reorder point. All other data elements were satisfactory, so we considered the supply status of these 17 filters to be good and we directed our attention to the trouble areas.
Our investigation of the four USATACOM filters without IMDR’s indicated that the stock number of one filter had been changed and its stockage position was good. We identified the other three filters as items managed by the Defense Industrial Supply Center instead of USATACOM.
We examined our second problem further, the four filters that did not have sufficient stock on hand. We found that two of these filters had a sufficient number due out and we moved them over with the good guys. The other two filters stayed on the NO side.
Problem Resolved
Tracking down the last two exceptions, we found the recorded stock for one filter was in error. This was corrected and it now exceeds the reorder point. Our problems were finally resolved when we also found the stock position for the other filter to be greater than the reorder point due to a recent procurement.
After the review, we revised the dropout chart to include the corrected data (fig. 2). We looked at all 27 filters and found problems had cropped up on six of them. Using the same techniques as we had with the first chart, we resolved the problems and corrected the records on the six.
In the M60 tank project manager office, we have used the dropout chart concept successfully with other groups of material, such as high-demand and fire-control items. Several of these charts made periodically for the same group of items are used to show progress or trends.
This technique is applicable to other subjects merely by changing the review criteria on the dropout chart. Such subjects as progress made toward completion of an engineering project, adequacy of weapons systems publications, and evaluation and progression of a group of trainees are but a few of the areas that could benefit from this technique.
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Colonel Paul W. Simpson was project manager, M60 Tanks, Warren, Michigan. He was a graduate of the Command and General Staff College and received his master’s degree in Business Administration from George Washington University in 1965. Colonel Simpson commanded the U.S. Army Maintenance Plant, Mainz, Germany, and the 1st Maintenance Battalion (DS) in USAREUR.
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