# Presentation: 765722

## eGovernment Smart Choice

Web-based Supply Chain Management Kick Off Meeting

May 20, 2003

**Web-based Supply Chain Management Kick Off Meeting**
- May 20, 2003

## Agenda

**     ****Project Overview**

**     ****Building on the Pre-select**

**     ****Approach and Deliverables**

**     ****Team Structure and Initial Activities**

**     ****Next Steps**

**     ****Welcome and Introductions**

**Notes:**
High energy Welcome.

Get jazzed.  

Good things are happening:

	EITIRB meeting tomorrow for 30 minutes exclusively on 	eGov

	EC and I will be meeting with DS ideally this week as well 	but may slip to next week

	Relatively positive feedback from OMB based on our 	efforts – only Yellow

Thanks for efforts to date.  Time to roll up sleeves again.

## Agenda

**     ****Project Overview**

**     ****Building on the Pre-select**

**     ****Approach and Deliverables**

**   ****Team Structure and Initial Activities**

**     ****Next Steps**

**     ****Welcome and Introductions**

**Notes:**
High energy Welcome.

Get jazzed.  

Good things are happening:

	EITIRB meeting tomorrow for 30 minutes exclusively on 	eGov

	EC and I will be meeting with DS ideally this week as well 	but may slip to next week

	Relatively positive feedback from OMB based on our 	efforts – only Yellow

Thanks for efforts to date.  Time to roll up sleeves again.

## WBSCM is strategically important to USDA

**The WBSCM Initiative supports several key programs and goals of USDA:**
- WBSCM comprises 1 of 5 strategic “Smart Choice” initiatives contained in USDA eGovernment Strategic Plan FY2002-2006
- WBSCM will assist in supporting the President’s Management Agenda and the Secretary’s Agriculture Vision for improving the food aid program
- A WBSCM system will enhance USDA’s capabilities to achieve its missions while reducing costs to USDA, MARAD, USAID, business partners, and citizens
**This current project will significantly advance the WBSCM Initiative by:**
- Identifying the** business/functional and technology requirements **(supply chain value opportunities)
- Defining what activities need to be completed in order to capture the supply chain opportunities and identifying the **new enabling technologies**
**Justifying the funding **required to support the WBSCM investment
**Defining an implementation plan **for building the system and describing the process changes required to build and support it

**Project Rationale**

## USDA has a complex and extensive supply chain complicated by an inadequate technology infrastructure

- US Freight
- Carriers3

- MARAD

- US Ports2,4

- Schools (27,000 school dists, 94,000  schools)
- Indian Tribal Orgs (125 ordering agencies)
- Non-Profits (60 ordering agencies)

*Domestic *

*Foreign*

- World Food Organization
- Foreign Governments (67 Nations)
- Private Volunteer Organizations (30+)

***Distribution***

***Customers***

***Suppliers***

**BUY**

**DISTRIBUTE/**
**SHIP**

**RECEIVE**

**PRODUCE**

- FNS

- FAS

- FSA

- AMS

- USAID

- KC
- Operations

- USDA

***Gov’t Agencies***

*Warehouse**1*

*Warehouse**1*

- Warehouses are Government owned or private sector leases
- US Ports play a significant role in managing foreign shipments
- Government Agencies are responsible for shipping
- Foreign customers are responsible for shipping

**USDA has a complex and extensive supply chain complicated by an inadequate technology infrastructure**

## This project will recommend alternatives to the aging PCIMS

**Planning/Ordering**

- EDI data exchange between SDA’s and PCIMS

**International Purchasing**
- (Paper based system – Orders are mailed/faxed to be entered into PCIMS)

**PCIMS**

- Records and monitors entitlement data
- Distributes surveys of available commodities
- Processes commodity orders
- Creates bid invitations, receives and analyzes bids
- Process invoices. payments and claims Processing and purchase data  transmitted electronically to Financial System
- Manages financial activities and reports
- Reconciles tri-agency accounts

**Domestic Purchasing**

- DEBES

- Bid Entry over internet by vendors

- EBES

- EDI

- FEEBES
- Bid Entry and
- Evaluation System

**Purchasing**

**Bidding/Distributing**

- ECOS Will  replace EDI

- FARES
- PVO’s will be able
- To enter/modify orders
- In PCIMs and review status

- Financial System

- PCIMS only supports 1,500 users (only 200 of which can access system simultaneously) – need for at least 35,000 users.
- Average operations and maintenance costs are $12 million**/**year.
- PCIMS does not enable on-line procurement capabilities (bid, procure, contract and invoice)
- PCIMS operates in an outdated technological infrastructure
- Nightly batch processing limits flexibility and timely execution, prohibiting real-time tracking, reconciliation and closeout functions
- Inflexible design often requires extensive coding changes to implement relatively simple modifications in program operations.
- Data extraction is cumbersome

- ED-3

- Financial Data view to payees over internet

**PCIMS Pain Points**

**Financial Pain Points**

- Inadequate funds control and inaccurate accounting due to time lags between procurement and financial transaction reconciliation
- Inaccurate Accounts Payable due to limited visibility and reconciliation of goods receipt
- Lack of Centralized Disbursement capabilities
- Inaccurate inventory accounting

## Our efforts will focus on the Select phase, which develops a business case and required technical architecture

**Our efforts will focus on the Select phase, which develops a business case and required technical architecture**

**Select**

**Control**

**Evaluate**

**Pre-Select**

**Steady State**

**Capital Planning and Investment Control (CPIC) Phases **

- Identifies business needs
- Establishes relationship between Department and Agencies for planning efforts
- Begins analysis of costs and benefits
- Identifies gaps

**Evaluates investment for cost, schedule, benefit, and risk**
**Ensures technical alignment of investment to other IT systems**
**Begins planning for system phase-out/replacement**
**Sets investment milestones and review schedules**
**Completes Select-level business case**

- Determines whether the investment met its objectives (performance, cost, and schedule)
- Determines extent to which the investment process improved the outcome of the investment

- Reviews existing investments to ascertain their current effectiveness

- Selects software
- Confirms the technical architecture
- Implements the IT investment
- Evaluates the investment on an on-going basis

## Agenda

**     ****Project Overview**

**     ****Building on the**** ****Pre-select**

**     ****Approach and Deliverables**

**     ****Team Structure and Initial Activities**

**     ****Next Steps**

**     ****Welcome and Introductions**

**Notes:**
High energy Welcome.

Get jazzed.  

Good things are happening:

	EITIRB meeting tomorrow for 30 minutes exclusively on 	eGov

	EC and I will be meeting with DS ideally this week as well 	but may slip to next week

	Relatively positive feedback from OMB based on our 	efforts – only Yellow

Thanks for efforts to date.  Time to roll up sleeves again.

## This project will build on the work of the Pre-select Business Case conducted in 2002

- Identified how the WBSCM Initiative will support Agency and Departmental goals
- Developed a preliminary vision for the WBSCM system
- Defined the WBSCM value proposition and estimated potential costs and benefits
- Identified significant potential savings, based on assumptions, that would result from a WBSCM system
- Provided justification for the investment of time and resources to conduct the current project and its Select-level Business Case

**Results of the Pre-select Business Case**

## The Pre-select Business Case highlighted a number of opportunities and set the stage for the Select-level Business Case

** ****1.1  Serve more people and better meet customer demands**
- Allow for 1000 times more users by expanding nationally  and internationally to customers
**1.2  Reduce costs for customers**
- Eliminate/reduce storage costs paid by school districts for late deliveries
**1.3  Increase food aid and meals**
- A $50 million savings would fund the annual cost of FDPIR.

**2.1 Reduce total commodity spending **(estimated value: $120 million/year in 3-5 years)
- 5% reduction in annual spend of $2.4 billion equates to approximately $120 million in savings.
**2.2 Reduce transportation costs **(estimated value $22-35 million)
- Currently, transportation costs for foreign distribution are estimated at $800 million/year.
**2.3 Reduce inventory and warehouse costs and investments **(estimated value: $0.3-$0.6 million)
**2.4 Reduce information technology cost **(estimated value $5-$8 million).

** ****3.1 Improve timely delivery of USDA commodities and reduce processing cycles**
- Current on time delivery averages at 88%. Estimated improvements to 95%-99%
- Reduce the order cycle time by more than 50% (from 24 days to less than 10 days).
**3.2 Improve collaboration and integration across Departments**
- New effort contains USAID, FAS, MARAD, FNS, FSA, and AMS (as opposed to 3 agencies) to include foreign and domestic programs.
- Food aid duplication and waste was identified as a target issue for resolution in the 2001 President's Management Agenda.·
**3.3 Ensure timely financial management and reconciliation and improved reporting capabilities**

**Strategic***

**Financial***

**Operational***

**“****Better, Cheaper, Faster”**

- *Based on Pre-Select Analysis – to be verified and updated during the Select-level analysis.

**Notes:**
The Web-based Supply Chain is designed to best meet the needs of USDA’s food customers and agricultural suppliers. It allows for over 1000 times more customers and suppliers to use the system (current PCIMS supports 3000 users, only 200 simultaneously, and the new system would allow over 40,000). Customers will have an increased voice and participation in placing orders, a broader selection and range of commodities that are visibility and available to them and real-time feed back about shipments and desired products. The proposed system will give customers and suppliers what they want, when they want it.

## Agenda

**     ****Project Overview**

**     ****Building on the Pre-Select**

**     ****Approach and Deliverables**

**     ****Team Structure and Initial Activities**

**     ****Next Steps**

**     ****Welcome and Introductions**

**Notes:**
High energy Welcome.

Get jazzed.  

Good things are happening:

	EITIRB meeting tomorrow for 30 minutes exclusively on 	eGov

	EC and I will be meeting with DS ideally this week as well 	but may slip to next week

	Relatively positive feedback from OMB based on our 	efforts – only Yellow

Thanks for efforts to date.  Time to roll up sleeves again.

## Our approach involves documenting business case requirements and defining technical requirements in order to complete the Select-level Business Case 

**Analyze Current Capability**

**Determine Desired Capability**

**Define Value Proposition**

**Determine Impact on USDA**

**Conduct Alternatives Analysis**

**Baseline **
**Current Capabilities**

**Assess &**
**Benchmark**
**Performance**

**Define Future Capability**
**Requirements**

**Define Functional Requirements**

**Define Technical Requirements**

**Develop Implementation**
**Plan**

**Refine and Develop Hypotheses**

**Project Approach**

**Timeline & Key Milestones**

- Project
- Kickoff

- Sponsor
- Checkpoint(s)

- I-TIPS
- Populated

## The project will produce four primary deliverables all driven from the Select-level business case and will yield significant outcomes

**Project Plan**

**Capability Blueprints**

**Select-level **
**Business Case**

- Overall project plan *(Complete)*
- Bi-weekly Project status reports

- USDA business capability blueprints
- Trading partner business capability blueprints
- USDA financial management business capability blueprints

- Business case document templates:
- Business profile
- Risk profile
- Financial profile
- Technological profile
- Management and planning profile
- Detailed timeline
- Overview documents
- OMB Exhibit 300
- I-TIPS business case entry

**Implementation Plan**

- Implementation roadmap
- Delivery approach

- Identification of technical solution alternatives to provide required capabilities
- Characterization of technology enabled supply chain value opportunities that will most enhance the USDA’s supply chain
- Identification of tangible, financial savings and additional benefits such as improved customer service and supplier relations

**Outcomes**

**Project Deliverables**

## The project plan deliverable describes the activities necessary to complete this initiative.  This project plan is complete and has been submitted for review

**Define Future Capabilities Required**

**Project Approach**

- Project
- Kickoff

- Sponsor Checkpoint(s)

- I-TIPS
- Populated

**Refine & Develop Hypotheses**

**Mobilize Team**

**Assess & Benchmark Performance**

**Baseline Current Capabilities**

**Define Future Functional Requirements**

**Define Future Technical Requirements**

**Perform Cost-Benefit Analysis**

**Develop Implementation Plan**

**Develop OMB Exhibit 300**

**Define Target System Architecture**

## The Capability Blueprints provide an enterprise-wide set of future supply chain business capabilities required by USDA

**Fulfillment**

**Procurement**

**Financial  Management**

- Strategic Network Planning

- Inventory Planning

- Supply Planning

- Demand Planning

- Distribution Requirements Planning

**Supply Chain Planning**

**Supply Chain Event Management**

- Suppliers

- Supplier Collaboration

- Customer Collaboration

- Customers

- Transportation Management

- Transportation Planning

- Accounts Receivable

- Control

- Warehouse
- Management

- Inventory
- Management

- Inventory Accounting

- Simulate

- Order
- Management

- Fulfillment Planning

- Invoicing

- Measure

- Strategic Sourcing

- Centralized Disbursement

- Monitor

- Contracting

- Accounts Payable

- Notify

- Sourcing

- Purchasing

- Operations Planning

**Draft - High Level Supply Chain Capability Blueprint**

## The Select-level Business Case will comprise the central deliverable for this Task Order

**Profile**

**Documents**

**Business**

- Business case with performance measures and mission needs statement
- Functional requirements
- Feasibility study (if required)

**Risk**

- Risk assessment and mitigation plan
- Initiative pilot/prototype plans

**Financial**

- Return on investment and CBA
- Update lifecycle cost projections
- Alternatives analysis
- Funding source identification

**Technological**

- Technical requirements
- Security and telecommunications plans
- Technical architecture (including enterprise architecture elements and relationships with existing systems)
- eGovernment plan
- Analysis of existing systems

**Management and Planning**

- Project plan, including a list of team members
- Integrated logistics plan (if required)
- Acquisition plan and strategy

**Select-level Business Case Deliverables**

## The Implementation Plan deliverable will describe a program roadmap for building the WBSCM capabilities

**Draft Example of Potential Implementation Plan for Supply Chain Planning**

## The four deliverables define the scope of this project, indicating there are areas that this project will not address

- Business Process Reengineering (BPR)
- Organizational consolidation
- Software vendor assessment and selection
- Finalize technical architectures or systems

**“****What We are Not Going to Do”**

## Agenda

**     ****Project Overview**

**     ****Building on the Pre-select**

**     ****Approach and Deliverables**

**     ****Team Structure and Initial Activities**

**     ****Next Steps**

**     ****Welcome and Introductions**

**Notes:**
High energy Welcome.

Get jazzed.  

Good things are happening:

	EITIRB meeting tomorrow for 30 minutes exclusively on 	eGov

	EC and I will be meeting with DS ideally this week as well 	but may slip to next week

	Relatively positive feedback from OMB based on our 	efforts – only Yellow

Thanks for efforts to date.  Time to roll up sleeves again.

## The project will be guided by the PCIMS Advisory Council (PAC) and includes Accenture personnel and USDA Subject Matter Experts (SME's) from across the WBSCM agencies

**Steering Committee**

*PCIMS Advisory Council (PAC)*

**WBSCM Project Management**

*Gary Batko – USDA*
*Steve Mikkelsen - USDA*
*Roger Dik - Accenture*

**Subject Matter Experts**

*Linda Hinkle – AMS*
*Henrietta Cooke – AMS*
*Catherine Smith - AMS*
*Wayne Brewer – AMS*
*Patricia Jennings - FSA*
*Austen Merrick - FSA*
*Donna Ryles - FSA*
*Lance Simson - FSA*
*Greg Borchert - FSA*
*Ethel Bowers - FSA*

**WBSCM Team**

*Gary Batko - USDA*
*Joyce Kline**1**- Accenture*
*Sean Osterhaus–Accenture*
*Scott Tyson – Accenture*

**eGovernment Program Management**

*Chris Niedermayer - USDA*
*Marty Rodgers - Accenture*

*Vivek Soneja**1** – Accenture*
*Aaron Collie – Accenture*
*Tech. Architect - TBD*
*USDA FTE – TBD*

**Business Case**

**Technical Requirements**

**The project will be guided by the PCIMS Advisory Council (PAC) and includes Accenture personnel and USDA Subject Matter Experts (SME's) from across the WBSCM agencies**

- Note: 1Designates team lead

**WBSCM Team Structure**

*Earl Thompson – FSA *
*Jeff Brownell - FNS*
*Todd Griffith - FNS*
*FAS – TBD*
*USAID – TBD*
*Thomas Harrelson – MARAD*
*Mike Yarrington - MARAD*
*Additional USDA SME’s – TBD*
*Accenture SME’s – TBD*

## During the next eight weeks, we will be working across agencies to develop the supply chain baseline and define future functional and technical requirements

**Baseline Current Supply Chain Capabilities**

- SME’s from each functional area: Planning, Procurement, Fulfillment
- Representatives from each USDA stakeholder agency
- USDA SME's with technical expertise

- SME’s from each functional area: Planning, Procurement, Fulfillment
- Representatives from each USDA stakeholder agency
- Key external stakeholders (i.e. customers, suppliers, and business partners, etc.)

- SME’s from each functional area: Planning, Procurement, Fulfillment
- Representatives from each USDA stakeholder agency

**Sub-Task**

**Major Workplan Task: Refine and Develop Hypotheses**

**Define Future Functional Requirements**

**Define Future Technical Requirements**

- Review hypotheses and baseline capabilities
- Analysis of existing systems
- Assess stakeholder (customer, supplier, and business partner) impacts to current supply chain

- Confirm baseline and gather functional requirements

- Gather and define future technical requirements

- Review preliminary baseline documentation
- Review preliminary hypotheses
- Document as-is supply chain
- Document pain points
- Document current supply chain system performance
- Identify gaps in current system performance
- Identify technology initiatives underway

- Confirm & finalize as-is baseline of each supply chain function
- Review pain point documentation
- Define future functional requirements

- Define future technical requirements
- Identify key architecture drivers
- Define technical requirements
- Prioritize technical requirements
- Document assumptions

**Activities**

**Participants**

## The WBSCM initiative will address the current functional pain points with the existing supply chain, identified during the Pre-select collaboration 

**Planning**

**Procurement**

**Fulfillment **
**(Order Management & Distribution and Logistics)**

**Pain Points by Supply Chain Function**

- Product visibility
- Product attribute data
- Available to purchase
- Integration between foreign and domestic supply and distribution planning
- Coordinated transportation planning
- Tracking status of processed commodities
- Variable pack sizes
- Product recall/hold communication process
- Inventory management

- Cross-agency procurement integration
- Domestic and export commodity sourcing visibility
- Bid award and evaluation
- Historical performance data
- Reporting capabilities for value vs. price decision making
- Performance incentives for low bid suppliers
- Cumbersome claims processing
- Supplier financial review process

- Cross-agency transportation consolidation
- Cross-agency coordinated transportation planning
- Integrated foreign and domestic fulfillment
- Transportation provider performance
- Large lot sizes drive customer warehousing costs
- Spoilage visibility
- Variable pack sizes
- Inventory management

- Late receipt of commodities

- Transportation cost embedded in total purchase price

- Cross-agency data extraction and information sharing

## To get started, the preliminary hypotheses will be tested and additional hypotheses will be generated

- Advanced planning and collaboration tools and methods will enable USDA to more effectively and efficiently match supply and demand, resulting in improved customer service and lower operational costs
- Improved procurement practices and technologies would significantly lower the cost of commodities purchased by USDA and the administrative costs associated with purchasing and contract management
- Improvements in order cycle times, financial processing, and other areas will reduce costs for both USDA and its customers while improving customer satisfaction and service.
- USDA can save significant expense through strategic transportation and inventory management and by streamlining the distribution network.

**Planning**

**Procurement**

**Fulfillment**
**(Order Management & Distribution and Logistics)**

**Preliminary Initial Hypotheses**

## The success of this project will depend upon the frequent and in-depth involvement of Agency experts

- Recognizing Agency experts have full time jobs, we will need approximately 1 day/week, on average, to assist with:
- Data gathering
- Hypothesis development and testing
- Workshops/interviews
- Championing of business case profiles
- Review and validation of business case profiles (majority of documents will be drafted by Accenture)

- This project will build on the collaboration achieved during the Pre-select Business Case
- Agency and Accenture personnel will work in closely integrated teams
- Meetings will be focused and time-bounded - attempts will be made to combine meetings to leverage SME’s with cross-functional/cross-organizational expertise

**What We are asking You to Do**

**Guiding Principles**

**Project Success Criteria**

## Agenda

**     ****Project Overview**

**     ****Building on the Pre-select**

**     ****Approach and Deliverables**

**     ****Team Structure and Initial Activities**

**     ****Next Steps**

**     ****Welcome and Introductions**

**Notes:**
High energy Welcome.

Get jazzed.  

Good things are happening:

	EITIRB meeting tomorrow for 30 minutes exclusively on 	eGov

	EC and I will be meeting with DS ideally this week as well 	but may slip to next week

	Relatively positive feedback from OMB based on our 	efforts – only Yellow

Thanks for efforts to date.  Time to roll up sleeves again.

## The following list identifies the next steps to launch this project

- Provide your calendar of activities to Gary
- Confirm team workspace
- Schedule meetings with SME’s
- Agree on dates for first trip to Kansas City
- Initiate data collection per revised data request
- Confirm project plan
- Begin scheduling interviews with customers and suppliers

**Next Steps**

## Questions

**Questions?**
**Discussion**

**Questions**

## Appendix

## Each capability in the blueprint will have a clearly defined description and purpose in USDA’s Supply Chain operations

**Technology or Process Capability**

**Capability Overview**

**This Capability Will Enable the USDA to:**

**Sourcing**

- The application will deliver a method for producing request for bids/quotes electronically and manage the responses to each bid though the entire lifecycle the bid until the PO/contract is awarded.

- Streamline bid evaluation to award process and reduce cycle time
- Standardize and integrate Foreign and Domestic Bid evaluation
- Ensure compliance with awarded contracts

**Demand Planning**

- The application focuses on development of robust forecasts based on historical consumption patterns, taking into consideration anticipated changes

- Optimize demand and supply chain matching process by changing the current annual purchasing planning process
- Develop cross-agency consolidated demand plans for smoother downstream procurement and fulfillment processes
- Achieve integration between foreign and domestic food aid programs

**Fulfillment**

**Procurement**

**Financial  Management**

- Strategic Network Planning

- Inventory Planning

- Supply Planning

- Demand Planning

- Distribution Requirements Planning

**Supply Chain Planning**

**Supply Chain Event Management**

- Supplier Collaboration

- Customer Collaboration

- Transportation Management

- Transportation Planning

- Accounts Receivable

- Control

- Warehouse
- Management

- Inventory
- Management

- Inventory Accounting

- Simulate

- Order
- Management

- Fulfillment Planning

- Invoicing

- Measure

- Strategic Sourcing

- Centralized Disbursement

- Monitor

- Contracting

- Accounts Payable

- Notify

- Sourcing

- Purchasing

- Sales & Operations Planning

## Electronic Bidding Capability (illustrative)

***COTS***
***Solution***

**XML Templates:**
- 1. _Terms and _
-     _Conditions_
- 2. _Event Details and_
-     _Timelines_
- 3. _Etc..._

**Supplier Evaluation**
**Criteria Menu:**
- 1. _Header Information_
- 2. _Total Cost Model_
- 3. _Attributes_
- 4. _Grouping_

**Suppliers**

**Buyer**

**RFP/Q/**
**bid **
**Package**

**Commodity**
**Database**

**Communicate Requirements**
- Buyers use existing XML/internet based templates to create items such as terms and conditions, timeline etc...
- Buyers pre-select attributes from a menu that forms a common basis for supplier comparisons
- Buyer attaches additional documents such specifications from various sources
- Buyer uses previously ‘closed’ auction/RFQ/P  information as input

**‘****Closed’ **
**Internet Bid / RFP/Q**
**Package**

**Collaboration Tools**
- Buyers use collaboration tools internally to prepare for a coordinated RFP process
- Suppliers and buyers conduct virtual meetings featuring
- video and audio streaming
- application/document sharing
- Questions or clarifications to original RFQ can be posted once and replies made visible to entire community

**The capability blueprint will depict data flow, user roles (internal and external), and technical requirements for various scenarios**