Coherent/Cohesive Use of Electronic Commerce in the 21st Century


       Our vision for EC in the 21st century envisions a fully automated electronic process for our buying and paying functions.  In the next century, VA will utilize prime vendor proprietary order processing systems and web-based electronic catalogs to place most, if not all, of our small purchase orders electronically.  These order processing systems will be seamlessly integrated with electronic payment processes such as purchase cards and EDI.  “Using service” and “purchasing personnel” will be able to access vendor and VA electronic catalogs from their desktop computers to view items, compare prices, determine stock availability, place orders using point and click technology, and pay for line items ordered using their purchase cards.  Because both the buying and paying functions will be fully automated, we will be able to analyze the data that will be captured, for procurement history purposes.

       We have already developed and completed the testing of a new Internet-based system for VA contracting officers to use in support of the acquisition process entitled the “VA Business Opportunities System.”  This systems will provide electronic tools allowing for increased competition, centralized data collection, and document processing/distribution.  A workshop will be conducted Wednesday and Thursday on the VA BOS, and I encourage you to attend to learn more about it.


Integrated Logistics Revenue Generation in the 21st Century


       We are in a unique position, and a very enviable position, to enhance our VA resources---provided we take full advantage of it.  DoD entities, Indian Health Service, Center for Disease Control, and HCFA, just to name a few, have approached VA to provide contracting and logistics support at both the National and the local levels.  DoD’s own IG has even recommended that DoD begin relying on VA for its medical commodity contracting needs.  The Transition Commission seemingly supports that premise.  But, what we need to do is collectively take advantage of the opportunity that has presented itself.  We have done some of that with the "summits" we have sponsored which have brought together Federal entities in various geographic regions.  We have collaborated as a system to provide support to various DoD initiatives.  But we can do better.  It is my belief and expectation that working with the new VHA Logistics Office, and the logistics liaisons in the other administrations, that VA’s full logistics system, Nationally and locally, can become the preferred contracting and logistics provider of choice within the Federal Government.

       1VA + Fund -- Later this week, there will be a workshop that will review some of the more unique successes experienced in the first year of the 1VA + Fund program.  In the initial year, there were 121 agreements processed for nearly $90 million.  That means program offices elected 121 times to preserve available year end funds to allow time for the most effective expenditure to achieve identified and bona fide program needs.  Every major office within VA, including the Inspector General, executed at least one agreement.

       During the first half of this fiscal year, contract awards were made totaling $23.4 million against 45 of the agreements.  It is encouraging to note that at the present rate, most of the first year monies will be expended in the current year.

       While the 1VA + Fund program continues to work favorably for VA, we are still experiencing unresolved problems in the attendant fiscal policy and accounting transactions.  Nevertheless, we are expecting even more program office participation in this, the second year, of the 1VA + Fund program.  It is fulfilling an important need and continuing throughout VA.

       But, important changes are nonetheless in the making.  We are pressing an FY 2001 legislative initiative that would allow for use of the 1VA + Fund for NRM projects and to open the program to OGAs.  OGA authority would assist our joint contracting initiatives and would also be a new revenue opportunity.  Another change will initiate a 1% fee for use of the 1VA + Fund program.  The 1VA + Fund workshop later this week will provide more detail.


Supply Fund Capital Leasing Program -


       The Capital Lease program enables program offices to acquire needed assets on a lease-to-own basis without up-front scoring of the lease obligation.  Under the Capital Lease program, equipment can be procured in advance of appropriated funding and can be paid for in part or in whole from savings generated by the use of the equipment.  While this may not be a panacea to be used carelessly, it is nevertheless an excellent and cost-effective tool in instances where it serves the needs of a program office.

       I am pleased to say that the Capital Lease program has come into its own during this past year.  We have more leases and more dollar value under lease than ever before.  As of April 30, we have executed 25 leases worth $16.1million  There are another 4 proposals worth $2.9 million that are awaiting signatures at medical centers, VISNs, or other program offices.

       I would like to mention just one example of creative use of the Capital Lease program.  Lacking funding to purchase space saving furniture and fiber-optic cabling, a VA office found that, by obtaining the furniture and cabling through a Capital Lease, they could reduce the square footage of their GSA-leased space and more than offset the capital lease payments through savings in space rental costs.  Now that is creative.  And, creative is what we must be in these times of tight budgets and competition to protect base program costs.


Optimum Materiel Management Strategies for the 21st Century


       In the materiel management area, we envision two developments that will have a major impact on the way VA conducts its logistics business.  First, new technology will become available that will dramatically improve materiel management operations.  We operate in an automated age, and this automation will continue to change the business practices in almost everything we do.  This is no different in the materiel management field.  for example, IFCAP/GIP has been the backbone of the VHA inventory management program in VA for the past 10 years.  It has been continuously improved to the point where its integration with the rest of VISTA is so complicated that it is difficult to modify.  Recently, we added bar code capability to GIP, and my office arranged the purchase of bar code scanners for all VA Medical Centers.  Now, we are looking at a new technology, described as point-of-use equipment, that automatically tracks the utilization of supplies.  This equipment dispenses supplies to authorized users and records every transaction, even down to the patient if necessary.  Initial studies have shown this equipment to dramatically reduce the amount of standing inventory and to decrease supply consumption by as much as 30 percent!  In addition, we are working on developing interfaces between our computer systems and prime vendors, which will create a seamless and paperless arrangement for ordering and payment.

       Second, In our household goods program, our move management services contractor, working with Bill Bardwell of my staff, has implemented an Internet solution for scheduling and providing information on moves for transferees.  As a result, household goods moves can be arranged instantly through Internet transactions, and status information is available up-to-the-minute.


       Third, in the forms and publications program arena, we are developing an electronic forms system to enable users to access forms directly from the internet.  Currently, VA stocks over 9,000 forms at our Service and Distribution Center at Hines, Illinois.  As you can imagine, that is a heck of a lot of paper and probably not the best way to do business.  Therefore, we think electronic storage of forms may be a technological answer to an antiquated system of warehousing paper.

       In addition, our Publications Service has obtained state-of-the art duplicating equipment that enables it to produce professional quality, customized documents for our customers’ smaller jobs without having to contract the work to commercial printers.  This not only speeds up the process, but it also saves our customers money.

       Finally, at the Denver Distribution Center, VA’s most recent Cary Award Trophy winner, the Remote Order Entry System, or “ROES,” will be completely redesigned to provide more features to users.  For example, we hope to develop a centralized patient database and to include some web-based applications.

       In summary, these new technologies will improve VA’s operations for our customers, reduce costs, and keep VA’s Materiel Management systems among the most progressive in the industry.  My office will continue to seek out opportunities to apply technology to VA’s programs where it makes sense to do so.  Never before have so many options become available, and even more are likely to emerge.

       Whatever wonders our technology brings, It is a fact of life that Materiel Management presently relies on people to physically distribute supplies to wherever they need to be.  However, there are some ways to do this that are better than others, which brings me to the second development we envision for the next millennium.  That is, the realization that Materiel Management operations must be carefully coordinated to obtain the efficiencies required by today’s austere resources.

       The VISN structure has encouraged a significant amount of much needed innovation to the VA system.  However, like all experiments, not all ideas work as well as intended.  A case in point, we believe, is the practice of separating logistics functions, particularly materiel management functions, and distributing them to various organizational elements.

       For example, we sometimes see at the same facility warehousing assigned to Engineering Service, distribution assigned to Pharmacy Service, and SPD assigned to Nursing Service.  While well intentioned, it is our view that fracturing the materiel management system is counterproductive.  Separating Materiel Management functions eliminates the efficiencies that are possible if the operation were properly coordinated.   A well-coordinated Materiel Management program provides a system to effectively obtain supplies, facilitate product standardization, efficiently distribute supplies, and provide expert knowledge in the preparation and utilization of products. 

      We have already seen some facilities that had broken up Materiel Management recombine the operation.  They have recognized the benefits that a single logistics operation offers.  For example, the PROGRESS program OA&MM has been advocating for the past 5 years encourages the use of dedicated materiel managers to provide automatic supply support to users.  In this manner, inventory management is performed by materiel management professionals who can devote the time, effort, and expertise necessary to assure proper utilization of supplies.  Furthermore, health care practitioners need not take time away from patient care to do inventories, replenish supplies, and conduct other Materiel Management tasks.  Wherever implemented, a PROGRESS-type approach always has resulted in, at a minimum, hundreds of thousands of dollars in cost savings.

       For these reasons, we are quite certain VA materiel management in the new millennium will see increased application of technology and a return to centralized logistics organizations.  These two developments have the potential to reduce VA supply costs through better inventory management.


Reduced/Redeployed Logistics Staffing in the 21st Century


       The VA logistics systems, particularly in VHA and OA&MM, have already experienced significant reductions in staffing brought about by new technologies and new techniques.  In my organization, for example, we are over 40% fewer in staff than 5 years ago, primarily due to the closure of our Depot system.  That closure was an economic decision and was based upon our ability to distribute products more efficiently through private sector mechanisms.  Field logistics organizations have also experienced significant reductions because of JIT delivery systems and increased use of the purchase card.


I think the reductions in logistics staffing at the field level will inevitably continue.  I believe those reductions will be prompted by the reasons identified here.  If mandatory use of standardized items is directed; if mandatory medical/surgical PV is directed, as now is the case for pharmaceuticals and subsistence; if there is increased use of national contracts; if there is made available an "electronic catalogue;" and if there is increased utilization of point-of-use technology----all of which I have predicted----then reduction in the need for logistics staff as currently constituted is inevitable.  Frankly, I think it is inevitable in any event, due to the shrinking resource base.


I do believe, however, that with these reductions and changes come possibilities.  The VHA logistics community, where the changes will be the most dramatic, have the Enhanced Sharing legislation that provides them an opportunity to focus on revenue enhancement possibilities.  Many heretofore “purchasing logisticians” have already made that transition.  That alternative, and others, should be carefully considered if, as I predict, staff reductions in traditional logistics functions occur.


“There is nothing stable in the world; uproar’s your only music.”

--John Keats


What I have attempted to provide you is my perspective, my predictions if you will, regarding where we are and should be heading as a logistics system in the new millennium.  It is perhaps not a comfortable scenario.  But as Keats so rightly said approximately 200 years ago, whether you buy into my predictions or not, our system will change, it will not remain stable.  But that does not mean that we cannot guide that change, take advantage of that change, and even make some of those changes.


What is also perfectly clear to me is that we must work together, my organization at the National level and the logisticians in the field, with the coalescing force of the VHA Logistics Office, and the liaison offices in the other administrations.  We must manage the on-going change to the best advantage of VA.  OA&MM is prepared to work with these liaison offices to achieve this positive change.  We owe the taxpayer and the veteran no less.


OA&MM will continue to be responsible for National contracting and will provide oversight to the Acquisition and Materiel Management system of VA.    But, most certainly, we cannot do these things in isolation and must and will work with VHA, VBA, NCA, and the field structure to ensure a coherent logistics system.  Todd Grams will speak on Thursday and provide his perspective on the new VHA Logistics Office; I urge all of you to take advantage of this opportunity for hearing his perspective.  One priority I know Todd shares with me:  that is the intent to make VA"s logistics system the most efficient, effective, and streamlined system it can be.  I am equally confident that everyone in this room shares that objective.


Thank you.


发表于: 2005-11-09 22:22 肖利华 阅读(2099) 评论(0) 收藏 好文推荐