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Comparison of Costs for the Distribution of New Digital Talking Book Machines (DTBMs)

Section 4 - Modifications to Information Systems Costs

4.1 Operations at MLAs

If additional labor is not to be deployed at the MLAs to facilitate the exchange of information between MLAs and the Producer/Distributor that will be necessary using the Alternative Method, then this effective bifurcation of the available machine inventory must be made completely transparent to the staff responsible for placing orders for machine shipments and engaging in machine inventory control functions. To become transparent and not require additional labor to make duplicate entries and "manually" update their systems, certain enhancements must be made to the information systems presently used by the MLAs so that the additional tasks are completely automated.

1. Query Available Inventory. A Reader Advisor or equivalent, who determines that a reader should be issued a machine of a particular type, must be able to query their system and see the number of machines available for issue, as they do now. But in the Alternative Method, the system must show the total number of machines available both in-house ("used") and available (for that MLA) at the Producer/Distributor’s facility ("new"). Ideally, it would display both of these inventories to the user, and a total, but separately displaying them would not be essential.

2. Order from Producer/Distributor. MLA staff must be able to place an Order with the Producer/Distributor on their system so that it will be transparent. The Order would contain a unique MLA-assigned Transaction Number (probably the NLS Code plus Patron ID plus Date/Time, which would uniquely identify the transaction), the DTBM model (Basic or Advanced) to be shipped, and Patron Name and Address.

3. Process Order Status. The order should be classified as accepted or rejected by the Producer/Distributor’s system (and if rejected, noting the reasons) and this status reported back to the MLAs, this "feedback" being important for reliable data communications. The MLA information system must be able to process Status responses from the Producer/Distributor system automatically.

4. Process Shipped Transactions. The Producer/Distributor’s system must inform the MLA system that an Order has been Shipped and the date on which it was shipped (likely by referring to the Transaction Number). The MLA system must automatically process these responses from the Producer/Distributor’s system and update both the MLA machine inventory and reader records accordingly.

5. Ability to Place Inquiries with the Producer/Distributor: The MLA staff must be able to place inquiries with the Producer/Distributor, whether via the information system and/or by telephone, email, etc. which will require staff committed to responding to such inquiries.

6. Process Undeliverable Transactions: (TBD/maybe not applicable). There may or may not be USPS undeliverables at the Producer/Distributor facility under the Alternative Method, because the shipping labels may only use the MLA return address (on both sides), in which case machines will be returned to the MLAs. However, machines may be returned to the Producer/Distributor, in which case the Producer/Distributor system must communicate such actions and the MLA systems must receive and process these communications and update machine inventory and patron records accordingly.

All the types of MLA information systems in use would have to be modified to accommodate the above changes and provide the required functionality for implementation of the Alternative Method for distribution of new DTBMs. NLS would be responsible for costs associated with enhancements to the READS system, which are estimated by NLS staff to be approximately $75,000, and would be a one-time cost.

4.2 Operations at Producer/Distributor

The special, although possibly not unique, requirements for distribution of new DTBMs under the Alternative Method would likely require several enhancements to the information system used by the Producer/Distributor, which are listed below. This entity, whether or not a subcontractor for the machine manufacturer, is assumed to already be in the "fulfillment" business, and possess an infrastructure of facility space, storage equipment, material handling equipment, staff, and information system support, e.g. FBA.

1. Maintain and Apply Perpetual Available Inventory by MLA. The Producer/Distributor’s system would have to be able to calculate and maintain a perpetual, available, new DTBM inventory, by MLA, based upon: (1) actual receipts of new machines passing NLS QA: (2) NLS machine allocation quotas for MLAs; and (3) actual shipments of new machines to readers. A machine would only be shipped by the Producer/Distributor for an MLA if: (1) there is available stock-on-hand; and (2) the perpetual inventory of the MLA is positive, i.e., it has not exceeded its quota.

2. Capture and Convey S/N of Machine in Shipping Transaction. There is a requirement for the Producer/Distributor’s system to capture and communicate to the MLA systems, in the Shipped transaction, not only that a DTBM model (Basic or Advanced) was shipped on a given date to a given reader with an associated Transaction Number, but that a particular Serial Number was shipped. The Serial Number must, therefore, be scanned by the Distributor either: (1) as an input function, if the Producer/Distributor uses labels with codes/barcodes that are affixed to items and scanned at the time of receipt; or (2) as an output function, if instead the Producer/Distributor does not put their own labels on items, but instead scans a shelf label where the machines are stored (to acquire the SKU, i.e., the Producer/Distributor’s unique product number) and then the barcode of the S/N is scanned (to get the S/N). For some or all distributors, this may indeed require a system enhancement.

3. Use of the 3" x 5" Cards. Use of the standard mailing cards, with return addresses for 57 different MLAs, will present an additional complexity if the cards are also to be used for readers’ addresses - which they normally are. Use of this feature may require associated system enhancements.

Whichever distribution method is implemented, the Producer/Distributor would be required to send information on machines shipped for the update of BPHICS, by S/N, by MLA. In the Alternative Method, shipping machines to readers would have to be considered equivalent to shipping to MLAs. There would be no net cost differences between the two distribution methods with respect to this requirement.

It is estimated that, in order to implement and test the information systems enhancements, and to continue to manage the MLA-to-Producer/Distributor information exchange and resolve problems, a cost and level-of-effort equal to 1 FTE will be required for the Transition Years and 0.25 FTE will be required for the Maintenance Years. Assuming a fully-loaded labor cost of $60,000 per year per FTE for the performance of this function, a 10-year cost of $375,000 will be incurred by the Producer/Distributor and thus by the NLS in order to implement the Alternative Method.

4.3 Total Cost for Information System Enhancements

It is estimated that NLS will incur approximately $450,000 more over the 10-year planning horizon for implementation of the Alternative Method of distributing new DTBMs than for the Current Method. This difference is attributable to $75,000 for modifications to the READS system and $375,000 for enhancements to the Producer/Distributor’s system.

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Posted on 2007-09-27