Defense Medical Logistics Standard Support (DMLSS)

1. Defense Medical Logistics Standard Support (DMLSS) DMLSS Overview to Purchase Card Program Office June 19th , 2003 COL Dan Magee, MS, USA DMLSS Program Manager

2. DMLSS Wartime/Contingency DMLSS Mission Statement • Dramatically improve the responsiveness of medical logistics support • Implement business innovations that significantly increase effectiveness of logistics support while reducing costs • Develop a high-quality, integrated medical logistics automated system for use by all Army, Air Force and Navy forces in both peace and war • Materiel • Facilities • Equipment & Technology Management • Wholesale Functions Peacetime MHS Operational Continuum

3. BoD MHS CIO PEO IT Exec DMLSS Program Structure Joint Charter Assistant Secretary Of Defense Health Affairs Deputy Under Secretary of Defense (Logistics & Materiel Readiness) Defense Logistics Agency • EB/EC Partners • DoD CIO / Defense • eBusiness Program Office • DoD Comptroller / DFAS Health Industry Federal Advisory Committee (HIFAC) DSCP Commander DMLSS Program Manager Service Medical Logistics Chiefs DSCP - Medical Voting Members 3 Service Medical Logistics Chiefs TRICARE Management Activity, Program Operations Directorate Medical Director of the Defense Supply Center - Philadelphia

4. Reengineering Medical Materiel Sources Moving to Electronic Commerce 2.5% Depot-Stocked Items 40% Goal 95% • DSCP Prime Vendor • Web-Based Ordering • e-Commerce Medical Customers Commercial Suppliers 20% 40% Local Purchase and Credit Card Buys 2.5% Past Today Future

5. DMLSS Goals • Price we pay for supplies/drugs is lowest in US Healthcare • 80% of items received in less than 24 hours • Other 20% of items received in 48 - 72 hours • DoD inventories of supplies/drugs nearly eliminated • Contracting, ordering and bill paying prices totally electronic • Current use supplies/drugs go to deploying units from commercial vendors • One standardized medical logistics Automated Information System Electronic Commerce - “The Technology to Accomplish the Vision”

6. DMLSS Goals:Reducing Costs By MovingTo Centralized Acquisition Average Central Contract Item Wholesale Price DLA/VA Price Prilosec 20 MG $4,614.37 $2,078.71 Zocor 40 MG $396.80 $75.60 Allegra 180 MG $235.15 $60.00 Flonase 0.05 Nasal Spray $65.01 $13.82

7. DMLSS Goals:Commercial Electronic Commerce • Items Received in Less Than 24 Hours • Increased Use of Prime Vendor Program • Items Received in Less 48 - 72 Hours • Increased Use of Electronic Catalog (ECAT)

8. DMLSS Goals:Reduced Inventory • Reduced $ Value of Wholesale Medical Inventory • Reduced $ Value of Medical Stocks at DoD Hospitals (Retail Level) * * * FY02 Estimates

9. DMLSS: One System Peace and WarArmy, Air Force, and Navy • Legacy Systems to be Shut Down • AMEDDPAS • BIOFACS • CPD • MEDLOG • MICRO-MICS • TAMMIS • (MEDSUP, MEDASM, MEDMNT) Target Materiel Equipment Facilities DMLSS

11. Integration of DoD Web ProductsUsing The Web To Acquire Goods and Services • Machine-to-machine (replenishment) with backend processes - where we want most of the volume • Man-to-machine (shopping) with backend processes - limited scope, good for product identification • Man-to-machine (shopping) with no backend processes - pencil and paper of new millennium Customer Support on the Web (CSW) ECAT DMLSS Trading Partner ECAT Web Browser Amazon.com Staples.com

12. Integration of DoD Web Products“Shop Once on the Web - Order Computer to Computer” First Time Orders or Non-Routine Orders (C2B) - 10% of Orders Web-Based Orders (ECAT) E-Commerce Transaction E-Commerce Transaction Supplier • Electronic Catalog (ECAT) • External Focus • Identify Products • Place Non-Routine Orders • Track Orders Routine Reorders (B2B) - 90% of Orders E-Commerce Transaction E-Commerce Transaction Supplier E-Commerce Ordering Engine Only

13. DMLSS Medical Logistics Applications DMLSS Wholesale(DLA Funded) Contract Data (DAPA Mgmt System (DMS)) Catalog Data (Medical Electronic Customer Assistance (MECA)) Electronic Catalogs (ECAT) Readiness Data (Readiness Mgmt App (RMA)) Contract Mgmt (Corporate Data for Medical Intelligence App (CDMIA)) National Mail Order Pharmacy (NMOP) DMLSS (MHS Hospitals and Theater)(MHS Funded) DMLSS Release 1 DMLSS Release 2 DMLSS Release 3 Facility Mgmt Version 2 Integrated Prime Vendor Interface Facility Mgmt Version 2 Integrated Prime Vendor Interface Facility Mgmt Version 1 Standalone Prime Vendor Interface Customer Support Includes Web Version Customer Area Inventory Mgmt Forward Customer Support Customer Support Includes Web Version Customer Area Inventory Mgmt System Services Contract Services System Services Stockroom Readiness Inventory Mgmt Equipment Mgmt Assemblage Mgmt Equipment Maintenance DMLSS Echelon 1/2 MEDLOG Component of TMIP for Echelon 2 and below (TMIP Block 1) Joint Medical Asset Repository (JMAR) MEDLOG Component of TMIP for Echelon 2 and above (TMIP Block 2)

14. Evolutionary Development and Deployment • DMLSS Release 2 • Deployment completed to 109 sites - December 01 • DMLSS Release 3 • Successfully operating at 46 DoD Hospitals • Replaces legacy systems • Performing all medical logistics systems support DMLSS Release 3 DMLSS Release 1 DMLSS Release 2 Facility Mgmt Standalone Prime Vendor Interface Facility Mgmt Integrated Prime Vendor Interface Facility Mgmt Integrated Prime Vendor Interface Forward Customer Support Customer Support (Web Enabled) Customer Area Inventory Mgmt Customer Support (Web Enabled) Customer Area Inventory Mgmt System Services System Services Contract Services Stockroom Readiness Inventory Mgmt Equipment Mgmt Assemblage Mgmt Equipment Maintenance

15. Customer Area Inventory Management Replenishment Processing/Wireless Processing Release 3 Modules Customer Support on the Web Materiel Orders/Catalog Search/ Work Orders Assemblage Management Readiness Tool Stock Room Inventory Management Physical Inventory/External Customer Support/Quality Assurance Integrated Common System Services Equipment & Technology Management Life Cycle Management of Equipment Facility Management Computer Aided Drawings/ Facility Inventory

16. Customer Support on the Web (CSW) CSW is a web-based interface to DMLSS that provides the user the capability to research, order approved products / order new items, track status and order facility services Catalog Search Work Request

17. Customer Area Inventory Management (CAIM) • The system supports multiple • replenishment processes • Screen entry • Automatic from Point of Use Systems • Hand Held Terminals (HHTs) This is a view of the outgoing order file in Electronic Data Interchange (EDI) format (ANSI X.12 850 transaction set)

18. Stock Room Inventory Management (SRIM) Catalog Search Requisition Management Physical Inventory Quality Assurance

19. Facility Management (FM) Computer Aided Drawings Facility Inventory

20. Equipment and Technology Management (E&TM) Ordering and Receiving Equipment Equipment Information and Accounting Maintaining Equipment Contract Management

21. Assemblage Management (AM) Manage Contingency Stocks Supplies Equipment

22. Electronic Catalog Web-Based Ordering DAPA Management System Feeds Product Price Catalog DMLSS DLA Supply Chain Enablers DMMonline Customer Relationship Corporate Data for Medical Intelligence Application Business Intelligence on orders to DLA Readiness Management Application Readiness Modeling Tool

23. Digital Catalog Data - Foundation for Supply Chain Management National Stock # Data File • Pricing Data • DAPA Mgmt System • VA Extract • Product Classification • Data File • First Data Bank - Pharmacy • Owens Healthcare - Med/Surg MECA (Medical Electronic Customer Assistance) On-line tool for Wholesale Managers • Supplier Management Data • Customer Demand Management • Information Application (CDMIA) UDR (Universal Data Repository) • Service Unique • Readiness Data • Sets, Kits & Outfits • D-day List CD-ROM Stand-Alone Tool Catalog Extract MTF MTF MTF

24. Challenges • Provide customers an integrated credit card reconciliation process • Provide an effective integrated local purchase interface

25. Challenge: Providing customers an integratedpurchase card order and reconciliation process DMLSS System Customer call/fax/email order to vendor Customer creates purchase card order in DMLSS 1 2 Customer enters order and Vendor Reference # in CARE Customer enters Vendor Reference # into DMLSS which ties it to purchase card order 4 3

26. DMLSS System End of month billing cycle: Customer prints bank invoice from CARE DMLSS end-of-day process generates cost allocations to appropriate customer accounts 6 5 Customer reconciles purchase card in CARE Using bank invoice, customer reconciles purchase card in DMLSS 8 7

27. Interface Process Improvements Steps 4 and 8 would be eliminated from the current purchase card process, saving untold hours spent in keeping two sets of books on purchase card calls. As an aside, Army and Air Force are requiring that all of their sites enter detail registers of Purchase Card Orders into CARE. A waiver would have to be obtained from each service stating that DMLSS would be the system of record for purchase card buys along with an interface to eliminate paragraphs 5 and 8.

28. DMLSS / Citibank Proposed Purchase Card Interface DMLSS Citibank • On a daily basis DMLSS will either pull or Citibank will push site vendor paid call reconciliation data to DMLSS by either using an EC/EDI 821 or a Flat File • The reconciliation file will contain: • Bulk Document Number for billing cycle • Card Number • Vendor Reference Number, if available • Date of payment • Vendor Name • Amount • DMLSS will align the bank information to the DMLSS purchase card register primarily using vendor reference number. Records lacking that will use vendor name, amount and payment date • Upon the completion of the billing period, purchase card holders and their Administrative Officers will reconcile in DMLSS using the bank information • Once reconciliation in DMLSS is complete the purchase card invoice will be certified in Citibank Direct • 3 June 03 meeting with Chuck May of Citibank to work interface details

29. Benefits Summary Return on Investment (FY2002-2012) Benefit to Cost Ratio 5.98:1 COSTS $604M “For every $1 DMLSS needed, $5.98 is realized” BENEFITS $3,614M • 2003 E-Business Transformation Award • 2003 Excellence.Gov Award • 2002 Federal Acquisition Award • 2002 Accenture and MIT Digital Government Award • 2002 FGIPC Intergovernmental Solutions Award • 2001 Post Newsweek Government Information Technology Award • 2001 E-Gov Explorer Award • 2001 DoD Electronic Commerce Pioneer Award • 2001 Federal Computer Week’s Federal 100 Award • 2000 E-Gov Pioneer Award • 1999 DoD Electronic Commerce Pioneer Award • 1998 National Performance Review “Hammer Award” • 1998 Federal Computer Week’s Federal 100 Award • 1998 ComputerWorld Smithsonian Award For Innovative Technology • 1997 Government Information Technology Services Award For Electronic Government • 1997 Government Technology Leadership Award

30. Backup Slides

31. Present DMLSS Purchase Card Reconciliation • A DMLSS user, that is privileged to order using a purchase card, selects purchase card items that they wish to order and enters the amount they want to order in the DMLSS System and they BPS (Build Process Submit) the order. • They call or email the vendor and submit the order, confirming the amounts ordered with the vendor. • User enters the vendor reference number for the order into DMLSS. The DMLSS system populates the user’s unique purchase card register with the vendor reference number, line items ordered and the call number of the order automatically. • The DMLSS purchase card user then must go to the Bank’s CARE system and manually enter the same information into CARE. • In DMLSS: end of day process cost reallocations are cut from the Purchase Cards LOA (Line of Accounting) for those items ordered for departments that use different expense centers than the one used for the LOA of the Card. In addition, if the EOR (Element of Resource) for the card does not match that of the one used in the LOA, a cost reallocation is cut for these transactions as well. This is done automatically with no user intervention in a DFAS end of day process. • At the end of the billing cycle users go on line in CARE and print out the Bank’s Invoice. • This information is then used in DMLSS to reconcile the Purchase Card for the Month. This process is necessary to identify variances between the order price and what the bank was billed by the vendor. The system identifies these variances to the card holder and transactions are generated to account for the funds. • When reconciliation is completed in DMLSS the user must go on line in CARE and reconcile the purchase card items there.

32. DMLSS Wholesale: Currently Funded - DLA DMMonline • Customer Relationship Management (CRM) tool for wholesale medical logistics • Provides current wholesale medical logistics information for management and acquisition of medical materiel • Links to other web-based tools including ECAT, CDMIA, DMS and RMA • Coordination site for Regional Standardization

33. DMLSS Wholesale: Currently Funded - DLA Electronic Catalog (ECAT) e-Commerce Engine for Non-Prime Vendor Products • Web-based application for ordering non-prime vendor products • Provides ordering through multiple vendor catalogs • Browser based application • Accepts credit card payment • Medical component for DoD EMALL • Takes orders directly from Service Legacy System • Captures demand history • Enables product and price comparison • Supports cumulative discounts

34. DMLSS Wholesale: Currently Funded - DLA Corporate Data for Medical Intelligence Information Application (CDMIA) Provides Timely Business Intelligence • Business Intelligence tool for wholesale medical logistics orders (prime vendor, ECAT, depot) • Provides item-level visibility of prime vendor sales • Facilitates business decision-making, price negotiation and budget forecasting • Segments by market, region, program, organization and customer • Accommodates on-line queries with immediate response • Web-based multidimensional database with on-line analytical processing

35. DMLSS Wholesale: Currently Funded - DLA DAPA Management System (DMS) Enables Rapid Exchange of Products and Prices with Vendors • Web-based application for product identification and pricing for all Federally contracted items • On-line posting by manufacturers of products and pricing available to the Government • Paperless agreement review, acceptance and management • Veterans Affairs and National Contract Prices • Near-real time update capability • Manages over 130,000 items from 650 vendors • Cross-reference NSN to commercial identifiers • Allows manufacturers to post volume discounted tiered pricing

36. DMLSS Wholesale: Currently Funded - DLA Readiness Management Application (RMA) Maintains Situational Awareness • Medical logistics readiness modeling tool • Decision support for readiness investments in medical materiel • Asset visibility of medical materiel readiness contracts • Asset visibility of wholesale and commercial stocks • Web-based multidimensional database with on-line analytical processing • What if analysis modeling • Accommodates on-line queries with immediate response • Provides real time medical materiel wholesale asset status • Compares commercial trends against readiness requirements