Case Study: U.S. Defense Logistics Agency reduces spare parts costs with Minitab

Defense Logistics Agency Using Minitab to Reduce the Prices of Spare Parts

The U.S. Defense Logistics Agency (DLA) worked with Minitab to evaluate the pricing of 2,826 spare parts under a long-term Honeywell contract. Concerned that the one-pass pricing method may no longer reflect inflation or actual cost changes, the DLA needed a statistical way to determine whether prices were still reasonable and aligned with contract terms.

Using Minitab Statistical Software, the team analyzed pricing defects, created cause-and-effect diagrams, and performed process capability analysis to guide a re-pricing strategy. The results were significant: 82% of spare parts were brought within the acceptable pricing band, total spare-part prices fell by 9.4%, and the DLA saved $9.5 million, plus another $3.2 million by canceling over-procured parts.

U.S. Defense Logistics Agency