Audit Scope, Recommendations, and Key Findings


  • Whether National Defence supplies the CAF with the materiel they need, when they need it.
  • If National Defence provided materiel in timely manner while avoiding needless transportation costs
    • Audit scope consisted of materiel requests made and fulfilled between 1 April 2017 and 31 March 2019.
  • Materiel included: tools, spare parts, uniforms, specialized clothing, rations
    • Materiel excluded: aircraft, vessels, vehicles, ammunition, bombs, missiles

Key Recommendations

  • National Defence should review its materiel forecasting and positioning to ensure that sufficient stocks are maintained at the right locations. It should also review its materiel availability measures at the warehouse and national levels and use these measures to monitor whether stock levels are met.
  • National Defence should improve its oversight of high-priority requests to ensure that such requests are only used when necessary.
  • National Defence should communicate the costs of all available transportation methods and provide clear guidance on how to select the mode of transportation to ensure that decisions are founded on a full understanding of costs.

Key Findings

  • Poor supply chain management prevented National Defence from supplying the CAF with materiel when it was needed.
    • Poor stock management, late delivery
      • National defence did not adequately forecast needs to materiel to position it appropriately. This can impede CAF ability to conduct training operations as scheduled, be efficient in missions and operations, act quickly to respond to emerging situations
    • Spare parts, uniforms, rations were delivered later than requested half the time
      • 50% at least 15 days late, 25% at least 40 days late
      • High priority: 50% at least 6 days late, 25% at least 20 days late
      • There is a backlog of 162,000 requests that were more than 1 year late
      • The delays are frequently due to stock shortages
      • When stock is unavailable, materiel is located elsewhere and transported to the right location, adding additional steps and delays
    • One third (34%) of ~1 million requests were rerouted
      • This resulted in increased use of commercial transportation, which is often more costly
      • No rigorous controls exist to manage transportation costs
      • When requests did not follow established supply chain structure, commercial transportation was used three times more frequently
  • A large portion of materiel requests were submitted as high priority without justification
    • This put an excessive burden on supply chain and resulted in extra costs
    • National Defence did not have performance indicators to measure whether or not mat was stocked at the right warehouses, and whether warehouses had sufficient stock to meet the needs of military bases and units
    • The result was uncertainties and delays in supply chain, preventing the most efficient use of resources
    • National Defence could not justify the high-priority status of 67% of the reviewed requests
  • Inadequate control over transportation costs
    • National Defence requires that costs be considered when selecting transportation method. Manuals note that "premium transportation" can be used to respect the delivery date of high-priority request
    • However, National Defence's information system does not include the costs of all available modes of transportation. It includes costs commercial shipments, but not National Defence fleets.
    • A lack of clear criteria and full cost disclosure for staff to make authorize shipment methods and make well-informed decisions. It also prevents National Defence from reporting on transportation costs

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