An Alternative to FSSI?

FSSI solutions provide easy access to its procurement vehicles, which offer business intelligence, best practice solutions, and greater discounts with volume increases.

Purchasing GFM and CFM from DLA Stock using DOD EMALL

In my last post, I discussed how DOD EMALL is being used by Performance Based Logistics (PBL) and Contractor Logistics Support (CLS) contractors as a price research tool for Defense Logistics Agency (DLA) inventory. Today we are going to discuss how DOD EMALL is being used to purchase that DLA inventory.

DOD EMALL as a Price Analysis and DLA Inventory Level Research Tool

DOD EMALL is a valuable tool used by prime contractors and responsible Government officials to perform market research, price analyses and researching inventory levels of these repair parts within DLA. Of the 1,600 parts on the follow-on contract which had sufficient DLA inventory to cover the annual requirement, over 50% of the DLA prices were lower for a potential savings to the government of $8M.

Benefits of Master Data Management

Managing the catalog for an eCommerce site is hard enough, but when you have a database―which receives data from multiple sources—it is easy to have duplicates without even knowing it. This makes things hard to find and is very confusing for customers. The best way to solve this issue is to move to a Master Data Management philosophy. By standardizing the item names and consolidating the item descriptions, you create a catalog that is more understandable and easier to search. Here are some of the benefits of creating a database using Master Data Management.

Reduces errors
Increases reporting accuracy
Improves data usability
Simplifies design by standardizing data validation
Provides trustworthy data
Eliminates data inconsistency and improves accuracy and consistency
Improves data sharing
Enables consistent interactions between systems
Increases the quality and reliability of data
Provides clean data for the system
Establishes an authoritative source of information

The benefits of Master Data Management focus on either improved data quality or improvements in data governance. The major outcome of implementing a Master Data Management system is providing a unified view of all catalog items and streamlining the provision of high quality, consistent, and synchronized data. These good data management practices lead to operational efficiency improvements as well as enhanced search engine performance, reliable reporting, and an overall reduced item count.

The primary benefit of a Master Data Management system is establishing good data management practices, which improve operational efficiency. It is definitely something to think about if you are managing a large database that receives data from multiple sources.

Creating Our Own Search Engine

Shortly after the first web search engine appeared in 1993, Partnet began investigating the use of the Internet to help engineers locate parts they needed for designs. The results of this investigation were the basis for the most valuable single software patent in history. Partnet sold the patent but Partnet SearchExec™, under agreement with the license holder, is immune from intellectual property infringement for this patent (US Patent #6094649) which states how search engines may interact with databases. Partnet was granted such rights due to it being the original patent holder.

Today, Partnet is the primary contractor on DOD EMALL and we have become experts in the field of Information Retrieval (IR). DOD EMALL has at times contained nearly 70 million government and commercial items. In an effort to find a search engine capable of efficiently indexing and searching such a large volume of data, Partnet evaluated nearly every major search engine. In the end, none of these search engines was capable of satisfying the high-volume demands of DOD EMALL. This led Partnet to develop SearchExec™—a high-performance search engine designed to quickly search large data sets to identify and retrieve both unique government data elements and commercial content and present them in a unified view to the user. Partnet’s Distributed Internet Commerce™ technology enables SearchExec™ to simultaneously search multiple remote catalog databases and return the search results (including price and availability) in real-time to the customer.

eCommerce Support of Procurement Models

Acuity (Consultants) Ltd Executive Interm Manager and ACUITY Director, Tony Colwell’s Blog post this week titled 5 Models for Procurement Organisation, discusses the differences in the definition between Procurement and Purchasing. It also outlines the different types of procurement models. There are three basic models for procurement, any others being a combination of these three:

Local – All activity, decision making and control is performed locally and is autonomous.

Central – Decision making and procurement activity is centralized. (There may be local activity and controls outside the scope of procurement, for example, calling off supply under a centrally negotiated contract.)

Networked – Activity is co-ordinated across local units. Decision making is not independent but is controlled in some way by a node, or nodes, on the network

Being a great advocate of eCommerce, I was struck by how eCommerce was compatible with each of the models.

In a Centralized system, Company/Agency wide contracts can be offered and easily used by anyone with ordering capability. Rules and workflows can be put in place to facility large buys and prevent rogue purchases. Consolidated purchasing data is collected which can be used for strategic sourcing and other business analysis.
In a Localized system, a centralized eCommerce site can still be used. Rules can be put in place to display local contracts only to local users. These users can receive regional pricing. Each local buying group will have the feel and control of a local system, but the company can still gather the consolidated purchasing data for business analysis.
A Networked system can show both the Centralized and Local contracts and include business rules for specific items.  It could allow unrestricted purchasing for certain dollar thresholds and workflows for higher priced items or items whose […]

Why Strategic Sourcing Works

I saw a discussion recently on LinkedIn discussing why companies are turning toward having a few preferred suppliers rather than selecting items on price alone. This strategy is known as Strategic Sourcing. The question spurred quite a discussion.  Here are some of  the key points.

Price alone has nothing to do with material standards, product quality, or timeliness of delivery. Most often a manufacturer can excel at two of three key things…price, quality or service. A savvy buyer develops relationships for their company that balance all three.
Consolidating vendors helps reduce costs, and increases price leverage opportunities. A reduced vendor base can also help focus the procurement department’s ability to focus on quality, service and pricing.
Once you have developed a relationship with a supplier and know that they are reliable, you are often able to negotiate better pricing than they would offer to others. Another reason is that they know that you can deliver, such as paying on time,  which further solidifies their willingness to do business with one company over another. It goes both ways.
The simple answer is “Value.” Preferred suppliers are chosen for many reasons including: pricing, quality and service.  Some companies sell strictly on pricing and the notion that “you get what you pay for” usually holds true. I suggest that you demonstrate value and you may get more results than strictly pricing.
With a few preferred suppliers you can develop a kind of partnership which means long-term benefits for both parts, a win-win situation. Along with your supplier you can sometimes even develop or change products by using your joint knowledge and other things that you are unable to affect if you are frequently changing suppliers.
The movement toward fewer preferred suppliers is a […]

The Impact of eCommerce

Over the last 15 years, eCommerce has fundamentally changed the way we buy things. Before the advent of eCommerce,  individuals and businesses looking to purchase items were forced to either shop from store to store, or search through stacks of paper catalogs and then call the merchant to order.

Now you can sit at a computer in the convenience of your home or office and purchase things from all over the world.  They will arrive at you home or office in 2 to 7 business days or overnight for a little extra money. This has been a boom for the both the consumer and the business person, particularly the small business owner. Instead of setting up a brick and mortar storefront, many small businesses start with an online store. They have immediate access to millions of customers who might need their wares. Consumers who live in smaller communities have easy access to goods and services that might not be available locally.

Although online sales have steadily increased since the advent of the internet and are expected to increase into the future, event more sales are influenced by on-line research. The Forrester Research Group did a resesent study of s web-influences sales. While $155 billion worth of consumer goods were bought online in 2009, a far larger portion of offline sales were influenced by online research. Forrester estimates that $917 billion worth of retail sales last year were “Web-influenced.” It also estimates that online and Web-influenced offline sales combined accounted for 42 percent of total retail sales and that percentage will grow to 53 percent by 2014, when the Web will be influencing $1.4 billion worth of in-store sales.

There is a lot of room for improvement in helping […]

Transforming Government Supply Chain Management

While re-arranging my office space, I came across a book on government supply chain management. In 2004, the Honorable Jacques S. Gansler, former Under Secretary of Defense for Acquisition, Technology and Logistics, and Robert E. Luby Jr., Vice President, Supply Chain Management at IBM published a book titled: Transforming Government Supply Chain Management. In the book, among other things, they document two government eCommerce initiatives; DLA’s Medical eCAT and the DOD EMALL.

They state in the book that the Medical eCAT program, which at that time allowed web-based ordering of 650,000 medical items, “saved the DOD customers over 25 % of the product and handling costs  involved in obtaining the items through other means like local purchase.”

In Chapter 15, they document the benefits of the DOD EMALL in the following way.

Customer Benefits:

Assurance of ordering against establish contractual vehicles and compliance with federal regulations
Desktop access to product information and availability
Single point of entry , search and ordering across all electronic sources
Convenient payment mechanisms
Increased buying office productivity
Security

They conclude that web based ordering from commercial distributors using standard eCommerce transactions allows customers to receive products in a fraction of the time at a fraction of the cost.

Though this book was published some years ago, the benefits and cost savings are still true today. In fact, both of these systems still exist and are saving the government money every day. It just goes to show that there are ways for the government to save money and every little bit helps.

Future-Proofing Enterprise IT with SOA

Continuing our discussion of Service Oriented Architecture, let’s look at some of the chief benefits.

SOA is designed to eliminate dependencies on a particular implementation technology. When services are accessed through a common interface, the underlying implementation can change without changing the systems that build upon them. The implementation of the service can change for many reasons, such as:

Replacement of aging hardware
Changes to operating systems or application servers driven by security policy or cost considerations
Selection of a more productive software development platform

One or more of these components can change without impacting any of the dependent processes if implemented within a proper architecture.

This is valuable when trying to leverage legacy systems for new applications. Perhaps there are many potential clients for the legacy system, but the respective clients might use different software development platforms. Hand-writing the software necessary to integrate with a system of moderate complexity can take several weeks.

Rather than asking each client to duplicate this effort, the legacy system can provide a web service adapter with a machine-readable description. Then, each client or business process can automatically integrate with the service—skipping the time-consuming, expensive, and error-prone process of manual integration.

Reliability is enhanced as well, since there is only one piece of software to be tested (the web service adaptation layer) rather than an integration layer within each client.

There are cases when an entirely new system is being designed, and an architect might have the power to mandate a particular implementation technology. Even then, accessing the constituent services through a standard interface is a wise choice for two reasons:

1)       It provides a measure of “future-proofing” to the system. As new implementation technologies emerge, they can be adopted piece-meal by different services and their dependent processes.

2)     […]

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