DoD Prime Vendor Where We Have Been, Where We Are Going. Cliff Healy Materiel Manager, WHASC

Transcription

1 Cliff Healy Materiel Manager, WHASC

2

3

4 1992- The typical DoD MTF spent 43% of its operating budget just doing business - 19 % Product costs - 24 % Overhead Costs - Acquisition & Delivery Leadtime averaged days - Numerous supply sources and huge ordering costs

5 Pricing AgreementsDAPAs & IAs 2 types of Pricing Agreements support the Medical/Surgical Prime Vendor (MSPV) Program Distribution & Pricing Agreements (DAPAs) manufacturer/supplier national or regional government pricing (covers majority of MSPV sales) Regional Incentive Agreements and Incentive Agreements (RIAs and IAs) discounted pricing based on committed volume resulting from MMESO standardization process DAPA or RIA Price + PV Distribution Fee + DLA Cost Recovery Rate (CRR) Customer Price

6 Depot-Stocked Items Commercial Suppliers DLA Troop Support Prime Vendor & E-Commerce Where we are today 86% Depot-Stocked Items Medical Customers Local Purchase and Credit Card Buys Past Today Future

7 MED/SURG PRIME VENDOR REGIONS FOR GEN III

8 MED/SURG PV REGIONS FOR GEN IV

9 GEN IV: What s Improved 100% Real Time Price Verification of Order Confirmations (EDI 855) Prime Vendor Exclusive DAPAs (PVE-DAPAs) replace ACPOP Each Customer has both Backorder & Back-up capability Both Primary & Back-up PVs must provide Estimated Shipping Date (ESD) when responding with Back-order Status (IB) Customers can request Delayed Deliveries (up to 6 mths) by indicating RDD on the order (EDI 850). Primarily used to support Assembly Builds Master Ordering Facilities (MOF) can require delivery to New Delivery Locations to support Contingencies / Homeland Security / Disaster Relief

10 GEN IV Fill Rate Requirements DLA Troop Support Medical s Fill Rate Calculation is the Authoritative Fill Rate Source, not the Vendors Varies with Customer/Order Type Basic Fill Rate - 90% OCONUS Depot Sites - 83% PV War Readiness Material (PVWRM) 100% Delayed Delivery Orders 98% Premium Options: Stockless & Wound Closure 99%

11 GEN IV Product Pricing Unlike ACPOP, all GEN IV Product Prices must be pre-approved by a DLA Troop Support Contracting Officer Distribution and Pricing Agreements (DAPAs) Traditional DAPAs (Independent Manufacturers / Suppliers) Incentive Agreements (DAPA Discounts resulting from MMESO Standardization) PV Branded DAPAs (PV s own brand-name/private-label product lines) PVE-DAPAs (Prime Vendor Exclusive DAPAs) (DAPA of last resort; Total Delivered PV Price Agreement) Customer Price = DAPA + PV Distribution Fee + DLA Cost Recovery Factor or = PVE DAPA Price + DLA Cost Recovery Factor

12 PVE DAPAs & New Item Requests DLA Troop Support will send the Prime Vendors PVE-DAPA candidate items based on ACPOP items not having DAPA coverage via a newly developed PVE-DAPA E-Log PVs are required to respond using the newly developed POE (Price Offering & Evaluation) application PCO evaluates PVs price support information and makes price reasonableness determination Initial list of PVE DAPA items will be approved prior to Go-Live Detailed Process models for the NIR process have been developed. All New Item Requests will be checked to determine if item is already available via DAPA, ECAT or any long-term contract prior to consideration as a PVE-DAPA candidate.

13 GEN IV Real-Time Price Verification Real-Time Price Verification Performed on the PV s Confirmed Price (EDI 855) PV Notified via an EDI 824 if Confirmed Price does not Match Master Catalog File Price Master Catalog Price will obligate the correct price in both DMLSS and DLA s EBS PV s EDI 810 Invoice will be held in MRA until corrected

14 Gen IV Service-Level Elections Reduced Delivery Frequency (1-4 days per week)* Reduced PV Customer Service Visits (Mthly-Qrtrly-Telephonically)* Increased Delivery Sites within Facility (2-10 sites)* Increased Delivery Sites outside Facility < 25 miles (1-15 sites)* Increased Delivery Sites outside Facility > 25 miles (1-15 sites)* Low Unit of Measure (LUM) Stockless Service* Wound Closure Management Service* Outside U.S. Semi-Annual PV Customer Service Visits Full-Time, On-Site Customer Service Representative * U.S. Routine Ordering Facilities only

15 Med/Surg Prime Vendor Evolution

16 GEN IV Transition Plan 3 Months Vendor Systems Development (Apr-Jun 11) 5 Months Govt./Vendor Integrated Systems Testing (Jul-Feb 12) Regional Training & Go-Live Schedule: Global South Mar 12 Training & Apr 12 Go-Live Global West Feb 12 Training & Mar 12 Go-Live Global North Mar 12 Training & Apr 12 Go-Live Medical Air Bridge for supporting OCONUS North will transition from O&M to Cardinal when Global North goes live (Apr 12) Cardinal will continue MAB operations in Global West Must complete transition before GEN III Bridge Contracts Expire (April 19, 2012)

17 Database Synchronization and Conversion Synchronize DMLSS MASTER & the Medical Master Catalog (MMC) Associate Local Catalog Records to MASTER Synchronize Local Catalog Records with MASTER Report / Recommend Updates Site Prime Vendor Conversion

18 Synchronize the Local DMLSS Master Catalog with the Medical Master Catalog The local version of the DMLSS Master Catalog must be synchronized and remain synchronized with the MMC. Two methods can be utilized Complete Overlay or online Delta Transaction processing. Complete Overlay Complete overlay of existing DMLSS Master Inserts last transaction number into local database Delta Transactions The Preferred Method DMLSS calls the web service, compares transaction numbers, and downloads needed updates DMLSS processes each individual transaction once and only once and updates the local DMLSS Master accordingly Automatic notification of DMLSS technical support staff of failures

19 Associate SOS & MTF Catalog Records to the Master Catalog The SOS and MTF catalog records will be associated to their exact matching records in the Master Catalog. Once associated, DMLSS will lock pre-determined elements within the record and prevent user editing. Source of Supply Association By Med/Surg Prime Vendor Item Number (PVON) By Pharmaceutical Prime Vendor Item Number (NDC) By ECAT Supplier ID/Catalog ID By NSN By Supplier Name and Vendor Catalog Number (VCN) MTF Catalog Association By NDC By MFG Name & Part Number Records will be disassociated if the record no longer exists in the MMC.

20 Synchronize Local Records with MMC Data Once DMLSS Master has up to date data, it applies those updates to the local records. It will auto-update associated (locked) records and either auto-update or recommend updates to non-associated records. Summary of Synchronization Activities Packaging Pack Qty, Price, and other packaging details Sourcing Vendor Item Number, Order Product Number, Pricing Agreement #, Type Vendor Item, and other sourcing details Product Item Descriptions, MFG Cat Number, MFG Name, NDC, NSN, and other product details NSN Expiration Type code, Shelf Life Code, AAC, CIIC, Demilitarization, Precious Metal and other NSN details NDC AHFS, Dosage Form, Drug Strength, DEA Code, Orange Book, and others

21 Report Catalog Changes Once the update process has completed, the system will produce an MTF Catalog Change Report for the user. The user can view changes that occurred automatically and make a decision on changes that were not automatically updated. Automatic Updates The user can review automatic changes and report suspected discrepancies to the Medical Master Catalog owner. Recommended Updates Two sections are available for Review-Critical and Non-Critical: User can decide whether to Accept or Reject changes User can decide on how long to suppress a rejection up to 12 months

22 Bottom line: E-Commerce has been and continues to be the way forward for the DoD whether through Prime Vendor or another E-Commerce vehicle. Manual ordering is the last resort. Concerns exist as far as supply chain reliability during a time of war is concerned, but is vigorously being worked to assure supply chain continuity to the maximum extent possible. Standardization and Cost Containment and resources are two major driving forces for the DoD and its acquisitions processes. QUESTIONS?

23