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Volume IV Management July 2, 2003

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23 Dec 2004For quality control purposes, the MEO staff and supervisors will, These two supervisors along with marketing, quality control,

Logistics Supply/Warehousing Services

“Most Efficient Organization Summary”

    National Institutes of Health

    Solicitation # 263-04-P(BC)-0013

    Supply/Warehousing Services

    23 December 2004

    Table of Contents

    1 EXECUTIVE SUMMARY ............................................... 3 1.1 Objective ................................................................................................. 3 1.2 Approach ................................................................................................ 3 1.3 Organization ........................................................................................... 3 2 INTRODUCTION ........................................................................................... 4 2.1 Purpose .................................................................................................. 4 2.2 Functions Under Review......................................................................... 4 2.3 Methodology/Approach ........................................................................... 4 3 RECOMMENDATIONS.................................................................................. 5 3.1 Methodology and Assumptions Used to Develop MEO .......................... 5 3.2 Organizational Effectiveness, Efficiency, and Accountability .................. 5 3.3 Levels of responsibility in the MEO ......................................................... 6 3.4 Technology ............................................................................................. 7 4 MOST EFFICIENT ORGANIZATION ............................................................. 7 4.1 Management Approach .......................................................................... 7

    4.1.1 Management Organization .............................................................. 8

    4.1.2 Staffing ............................................................................................ 9

MEO Summary Page 2 04 November 2004

1 EXECUTIVE SUMMARY

The National Institutes of Health (NIH) Most Efficient Organization (MEO) was

    developed as the government’s organizational entity for performing the scope of

    work and tasks required for Logistics Supply/Warehousing Services at the

    National Institutes of Health. The logistics staff manages a broad range of

    supplies and materials from basic office supplies to biomedical research, animal

    food and bedding, laboratory, chemicals general supplies and medical supplies

    that are critical to patient care and medical research protocols. Development of

    the MEO was accomplished through review of the Performance Work Statement

    (PWS) requirements, analysis of workload data, and evaluation of the

    requirements by staff currently performing each function. The MEO is structured

    as a classical vertical organization along functional disciplines augmented with

    support staff providing direct services at four remote Institute/Center (IC) sites.

1.1 Objective

    The objective of the MEO development effort was to identify process

    improvements, cost reductions, and organizational structures associated with

    performance of activities required by the PWS to produce a competitive agency

    tender submittal. Development of the MEO was based on the PWS, interviews

    with management and technical staff, workload analysis, and an evaluation of

    current operating procedures.

1.2 Approach

    The MEO was developed with a comprehensive analysis of the current workload

    and comparison of the workload to the requirements of the PWS. The approach

    to technical performance amplifies the MEO motto “We Deliver So They Can

    Cure!” by focusing on the following four fundamental themes:

    ? Professional, quality service to the research community.

    ? Responsiveness to changes in research dynamics.

    ? Continued confidence and trust within the research community.

    ? Ability to provide solutions to researcher demands.

    The MEO development further sought to minimize the amount of indirect

    positions and roles necessary to operate the organization to further enhance their

    competitive capability.

1.3 Organization

    The MEO is predicated on the belief that activities provided by logistics support

    staff are an essential ingredient of the NIH mission. Underlying the technical

    approach of the MEO is the realization that customer service and knowledgeable

    accurate responses to the NIH community is of paramount importance. The staff

    that will form the core of the MEO currently performs these services and is keenly

    aware of their role and impact to the NIH.

    MEO Summary Page 3 04 November 2004

The final overall MEO organization employs a vertical management and

    functional reporting structure staffed by 30.4 Full Time Equivalents (FTE) federal

    employees, supplemented with contract services employing an additional 26

    equivalent employees, to produce an efficient organization capable of effectively

    completing the PWS workload.

2 INTRODUCTION

2.1 Purpose

    The purpose of this document is to describe the government’s Most Efficient

    Organization that will conduct the functions specified in the PWS.

2.2 Functions Under Review

    The PWS defines six performance areas applicable to the main Gaither

    Distribution Center (GDC) and four remote sites at the National Library of

    Medicine (NLM), the National Institute on Aging (NIA), the National Institute of

    Dental and Craniofacial Research (NIDCR), and at the Center for Scientific

    Review (CSR) The six performance areas are not required at each site. Table 1,

    “Services Required at Each Location,” identifies the specific services required at

    each of the five specified locations.

    GDC NIA NLM CSR NIDCR

    Requisitioning X X

    Receiving and Delivery X X X X X

    Storage X X X

    Picking and Shipping X X X X X

    Inventory Control X X

    Special Functions X

    Table 1: Services Required at Each Location

2.3 Methodology/Approach

    The MEO team carefully reviewed the performance work statement. Following

    the review, the team evaluated the individual tasks required by the PWS and

    assigned workload and position levels. Decisions were made with respect to

    organizational structure, management approach, and workflow commonality

    within the areas described by the PWS. The MEO team conducted a “bottom up” evaluation of the PWS requirements. These considerations were coupled with

    the workload information to formulate the MEO team. This was an iterative

    process with several tangents taken and variations considered until a final

    management approach was designated and formal costing finalized. The MEO

    team reviewed all appropriate documents and information for this management

    plan and ultimately adhered to and is compliant with the final PWS.

    MEO Summary Page 4 04 November 2004

3 RECOMMENDATIONS

3.1 Methodology and Assumptions Used to Develop MEO

    Analysis of the PWS by NIH Subject Matter Experts and the MEO development

    team produced three findings that underlie the current proposal:

    ? The current organizational structure is reasonably efficient and

    operating fairly effectively while having numerous vacant positions

    fairly unfilled,

    ? Remote site operations are integral to IC operations, and

    ? Use of subcontractor for GDC labor is a cost effective approach.

The above three findings were instrumental and structuring the MEO

    organization and defining PWS task allocation. The MEO will be an organization

    focused on customer service that accepts, performs, and completes the workload

    professionally and efficiently, with an emphasis on customer satisfaction.

3.2 Organizational Effectiveness, Efficiency, and Accountability

    To implement the MEO, the primary focus will be to effectively improve

    distribution of workload, accountability, and overall performance, ultimately

    yielding timely and accurate completion of work requests. The management

    approach will provide all services specified and required in the PWS, at a level of

    quality and timeliness that meets or exceeds the specified requirements.

The MEO will incorporate a systemic monitoring of tasks, assignments, workload,

    progress and quality of work that may be sampled at any time. By incorporating

    a primary focus of improvement, accountability and a proactive organizational

    response for the NIH, the MEO attains quality required in the Quality Assurance

    Surveillance Program and addressed through the Quality Control Plan.

For quality control purposes, the MEO staff and supervisors will, on an ongoing

    basis, document acceptance, performance, and completion of services and tasks.

    All employees of the MEO will be familiar with the PWS, the MEO proposal, and

    most importantly, the MEO commitment to provide quality service and response

    to support the NIH mission.

The MEO proposes comprehensive supply/warehousing services that will be

    technically integrated and centrally managed. To execute these comprehensive

    services, the MEO will focus on four fundamental themes.

    ? Professional and quality service to the research community.

    ? Responsiveness to changes in research dynamics.

    ? Continued confidence and trust within the research community.

    ? Ability to provide solutions to researcher demands.

MEO Summary Page 5 04 November 2004

Logistics Supply/Warehousing Services are vital to keep researchers supplied

    with the materials they need to advance the state of medical science in addition

    to keeping administrators and support personnel working effectively to maintain a

    productive work environment. The management approach fully addresses and

    comprehends the philosophy and operational concerns of an organization as

    unique and talented as the NIH. There are numerous key organizational

    requirements and considerations that will be addressed, including the ability to:

    ? Implement a highly responsive and service oriented organization

    that efficiently and effectively delivers services.

    ? Quickly adapt to changing workloads and environmental dynamics.

    ? Efficiently and swiftly move workforce to the workload.

    ? Balance cost and service.

    ? Meet the unique and diverse demands of the NIH.

    ? Function within the scope of government environment.

    ? Provide for employee satisfaction and development.

3.3 Levels of responsibility in the MEO

    There are three levels of responsibility within the MEO; employees, team leaders

    and senior MEO management/supervisors. Functional organizations place

    responsibility for both task performance and employee supervision at

    management levels, mostly at the line supervisors.

Employees perform the detailed tasks and are responsible for their quality and

    timely execution. Tasks are assigned through supervisors and team leaders.

    Task leaders are experienced staff with first hand knowledge of the activities they

    support.

Senior MEO management provides the overall supervision and guidance of the

    organization. Reporting to the MEO manager are a supervisor overseeing all

    Warehouse and Distribution Management (WDM) functions and another

    supervisor managing the Inventory Management (IM) activities. These two

    supervisors are further supported by marketing, quality control, and

    administrative staff.

Under the leadership and guidance of the WDM supervisor and a central

    storeroom lead, a purchase order will provide continuing “subcontract” labor for

    most of the central warehouse services. This order has been in place for several

    years and has proven extremely effective in performing the basic warehousing

    services. Subcontract administration as defined in the A-76 circular for the

    management of subcontract personnel will be provided by continuing government

    activity. The WDM branch also is responsible for the operation of the Self

    Service Stores.

The logistics staff at the National Library of Medicine, the National Institute on

    Aging, the National Institute of Dental and Craniofacial Research, and the Center

    MEO Summary Page 6 04 November 2004

for Scientific Review will continue to be responsible for providing services directly

    to these respective IC. These staff members will be within the MEO and will

    functionally report to the MEO Manager; however, their administrative

    supervision will be procured by the MEO and provided by the continuing

    government activities of their respective organizations.

3.4 Technology

    The Warehouse Distribution Management branch utilizes the Robocom’s

    Inventory Management System (RIMS) to assign work. RIMS is the back bone of

    the Warehouse Distribution Management branch and is integrated with the

    Administrative Data Base (ADB) system. RIMS is an automated system utilizing

    bar code technology and radio frequency hand held equipment. Managers will

    electronically assign tasks such as cycle counts, receiving, put away, storage,

    picking, issuing, shipping and re-warehousing pertaining to the 12,000 storage

    locations, 63 storage classes, and 25 storage types.

The MEO uses the data from the automated systems (RIMS and ADB) to

    perform verification and analysis of data before final decisions are made. The

    MEO is scheduled to transition to the planned New Business Research Support

    System (NBRSS). The NBRSS is will replace both the ADB and RIMS systems

    and will become the mandatory system for all of NIH.

4 MOST EFFICIENT ORGANIZATION

4.1 Management Approach

    The MEO will provide the managerial, supervisory, administrative, and direct

    workforce personnel to accomplish the scope of the performance work statement.

    The MEO management approach fully addresses and comprehends the

    philosophy and operational concerns of an organization as unique and talented

    as the NIH.

To manage the size, scope and different site locations required by the PWS, the

    MEO will specifically tailor the organizational structure to address the six

    performance areas in a technically integrated fashion while maintaining the

    specific service requirements that are expected at the four IC remote sites and at

    the Self Service Stores. The MEO will be:

    ? Properly staffed to handle all requirements.

    ? Focused on task control of warehousing and distribution.

    ? Able to maintain remote sites with a functional reporting structure.

    ? Managed by a relatively flat organization using a team approach in

    which individuals supervising employees and those responsible for

    task completion collaborate to complete tasks in a quality and

    timely manner.

MEO Summary Page 7 04 November 2004

    Management and staff of the MEO, who are currently members of the Logistics team performing the breadth of the services at all seven locations, are cognizant of the nuances of coordinating and synchronizing the services across the NIH. With this incredible experience base at the disposal of the MEO, the management approach selected will consolidate operation of the GDC and Self Service Stores to allow the IC remote sites to continue to operate as a stand-alone activity. The staff necessary to perform services at the NIA, NIDCR, NLM, and CSR will be within the MEO and will functionally report to the MEO Manager, but will also continue to report to the supervisors of their specific IC. Those supervisors will be providing administrative oversight of the employees. The business proposal has properly included the cost of the IC supervisors in the MEO offering. The supervisors are continuing government activity and the portion of their time allocated to oversight of the MEO employees is procured by the MEO. This approach allows the current operations at the four locations to continue without disruption.

4.1.1 Management Organization

    The organizational structure is a functional management approach with a supervisor overseeing all Warehouse and Distribution Management (WDM) functions and another supervisor managing the Inventory Management (IM) activities. These two supervisors along with marketing, quality control, remote site personnel, and administrative staff will report directly to the MEO Manager. The new organization is shown in Figure 1, “Most Efficient Organization.” This organizational strategy will use the best, current business practices to align the MEO with the policies, procedures and priorities of the NIH and various Institutes and Centers to ensure that the support services provided will be compatible with the mission and goals of the NIH and the Institutes and Centers.

    The Warehouse and Distribution Management Branch provides services at the GDC as well as management of two Self Service Stores on the NIH campus. The Self Service Stores are located in Bethesda, Maryland on the main NIH

    campus in Building 10 and Building 31.

    Under the leadership and guidance of the WDM supervisor and a central storeroom lead, the MEO will continue using the services of a support purchase order providing labor at GDC. The personnel providing labor under the purchase order will consist of material handlers, hazardous materials handlers, and motor

    vehicle operators. The WDM operations will be primarily located in a 150,000 square foot leased facility at the Gaither Distribution Center. This facility, which will be operated by the MEO, contains a climate and environmentally controlled Animal Feed and Bedding storage area, an Association for Assessment and Accreditation of Laboratory Animal Care certified storage section, a general products storage area, refrigerated storage, a secure area for controlling pilferage, and environmentally safe storage areas for chemicals, gas cylinders, flammables, toxic and hazardous chemicals and refrigerated chemicals. The MEO Summary Page 8 04 November 2004

WDM branch will staff the Self Service Stores with a store lead and eight store

    workers.

    NIHInstitutes and Centers(Continuing Government Activity)NIDCRNIANLMCSR

    LOGISTIC SUPPLY/STAFF at NIDCR, WAREHOUSE SERVICES AdministrativeNIA, NLM, CSR Supply Management OfficerStaff (2)(5.4)(MEO Manager)

    WAREHOUSE and Quality Control INVENTORYDISTRIBUTIONOfficer/Supply MANAGEMENTMANAGEMENTMarketing SupervisorSupervisorSpecialist (2)

    CONTRACTORWarehouse STAFFSTAFFServices (26) Central Storeroom Inventory Lead (1)Management Stores Lead (1)Specialists (8)Stores Staff (8)Most

    Efficient

     Organization

    (MEO TOTAL

    STAFF 56.4)

Figure 1: Most Efficient Organization.

4.1.2 Staffing

    Table 2, “MEO Workforce,” summarizes the aggregate staffing of the MEO and

    the distribution of staff at the various locations. In addition to 30.4 Full Time

    Equivalent (FTE) federal employees, the MEO will have 26 full-time, labor-

    equivalent contract employees.

The MEO has sought to minimize the amount of indirect positions and roles

    necessary to operate the organization. An equivalent of five FTE will be

    performing activities or roles that are inherent to a successful quality operation,

    but will not perform tasks within the PWS. These roles will be supervision,

    quality control, and general administration. Subcontract administration as

    defined in the A-76 circular for the management of 26 subcontract personnel will

    be provided by continuing government activity. Table 3, “Distribution of Indirect Roles,” describes how the MEO Manager, the WDM supervisor, the IM

    MEO Summary Page 9 04 November 2004

supervisor, the Quality Control and Marketing Coordinator, and administrative

    staff will distribute and share the indirect roles. The WDM and IM supervisors will

    also perform direct tasks as defined in the PWS 35% of the time and the Quality

    Control and Marketing Coordinators are assigned 70% to direct marketing tasks

    defined in the PWS.

Table 2: MEO Workforce

    MEO Position WDM IM Title Manager NLM NIDCR CSR NIA Grade Branch Branch Office

    Supply Management Officer GS-2003-14 1 (MEO Manager)

    Distribution Facilities GS-2030-13 1 Manager

    Supervisory Inventory GS-2010-13 1 Management Specialist

    Logistics Management GS-0346-12 5 Specialist

    Distribution Facilities GS-2030-11 1 Management Specialist

    Inventory Management GS-2010-11 1 Specialist

    Quality Control and GS-2001-11 2 Marketing Coordinator

    Inventory Management GS-2010- 2 Specialist 07/09/11

    Supervisory Supply GS-2005-08 1 Technician

    Secretary (Office GS-318-06 1 Automation)

    Supply Technician GS-2005-06 8 Supply Technician GS-2005-05 2 1 Secretary (Office GS-318-05 1 Automation)

    Supply Clerk GS-2005-04 0.4 2

     TOTAL FTE 5 11 9 2 1 0.4 2

    MEO STAFFING TOTAL 30.4

    MEO SUBCONTRACT LABOR 26

    TOTAL MEO 56.4

Table 3: Distribution of indirect roles

     MEO Quality General Subcontract Direct

    Supervision Control Admin Mgt Labor MEO Manager 70% 30% WDM Supervisor 25% 40% 35% IM Supervisor 45% 20% 35% QC/Marketing (2) 30% 70% Admin Staff 80% 20%

MEO Summary Page 10 04 November 2004

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