Section 1 - Introduction
1.1 Background
This report was prepared for the National Library Service for the Blind and Physically Handicapped (NLS), The Library of Congress. It presents the results of analyses in which the costs for the distribution of new Digital Talking Book Machines (DTBMs) using two different methods were estimated and compared, which are described below.
(1) The "Current Method," in which the machine manufacturer (Producer), an NLS contractor, will ship new machines to Machine Lending Agencies (MLAs) per NLS instructions, the MLAs will store the machines in their facilities, and then ship them to readers they serve as necessary on a continuous basis.
(2) The "Alternative Method," in which the Producer will store new machines in their facility, or in a subcontractor’s (Distributor’s) facility, and then ship them on a continuous basis directly to readers as instructed by the MLAs, but not to exceed inventory allocations for the MLAs as directed by NLS.
1.2 Scope of Cost Analyses
The estimation of costs focused upon those that would be incurred by the United States Postal Service (USPS) and NLS under each of the two distribution methods for new DTBMs. In this respect, there were essentially three facets of operations whose costs were estimated for the comparison, which are listed below.
(1) Delivery/Shipping Costs, which would be incurred by the USPS for delivery of the new DTBMs to MLAs and/or readers under the Free Matter for the Blind and Other Physically Handicapped Persons (“Free Matter”) provision.
(2) Storage and Picking & Packing Costs, which would be incurred by the machine Producer/Distributor, and thus ultimately by NLS, for the storage and picking & packing of new DTBMs after having passed NLS Quality Assurance (QA) inspection. For the purposes of the analyses, these costs excluded: (1) any incremental costs associated with modification to the Producer/Distributor’s information system that would be necessary to effect implementation; and (2) the actual shipping/delivery costs, which will be covered by the USPS.
(3) Modifications to Information Systems Costs, which would be incurred by the machine Producer/Distributor, and thus ultimately by NLS, for making modifications to the Producer/Distributor’s information system, and for making changes to the Reader Enrollment and Delivery System (READS), an information system used by some MLAs which is owned and maintained by NLS, in order to effect implementation of the Alternative Method.
1.3 Planned Production of New DTBMs and Planning Horizon
The NLS "Current Strategic Business Plan for the Implementation of Digital Systems" (September 2006) calls for the production of 590,287 new DTBMs over a time period of 5 fiscal years, referred to as the Transition Period. Based upon more recent information provided by NLS, it was assumed for purposes of the analyses that 120,000 new DTBMs will be manufactured annually for a time period of five consecutive years. This total of 600,000 new machines during the Transition Period matches very closely the total quantity in the NLS Strategic Plan.
It was also assumed that new DTBMs will be produced at a rate of 30,000 units per year in years following the Transition Period, which is a rate approximately equal to the expected total annual attrition of the machines due to both loss and damage. This is referred to as the Maintenance Period for DTBM production, and a year during this period is referred to as a Maintenance Year.
Since the length of the Maintenance Period is unknown, it was assumed for the purposes of the analyses that it will be five years long. Thus the total planning horizon used was 10 years, 5 years of production during the Transition Period followed by five years of production during the Maintenance Period.
1.4 Logistical Characteristics of New DTBMs
The important logistical characteristics of new DTBMs are described below.
Weight of Individual Unit: The weight of a single DTBM, with battery installed, with instructions, with packaging material, in a single carton was assumed to be 3.3 lb, the value of which was provided by the NLS contractor designing the machine.
Weight of Overpack: The weight of a DTBM Overpack box, containing eight (8) new DTBMs (as described above), was assumed to be eight times that of the individual unit, or 26.4 lb.
Size of Individual Unit: The dimensions of an individual DTBM carton were assumed to be 11.25" x 8.625" x 3.69", which was provided by NLS. These dimensions equate to a volume of 0.207 cf.
Size of Overpack: The dimensions of an Overpack box were assumed to be 18.5" x 15.5" x 13.0", which was provided by NLS. These dimensions equate to a volume of 2.157 cf.
Serial Numbers, Individual Carton: The Serial Number (S/N) of a new DTBM will be printed on labels on the exterior of the individual carton in both human-readable print and in barcode.
Serial Numbers, Overpack: The Serial Numbers of the eight (8) new DTBMs contained in an Overpack box will be printed on labels on the exterior of the box in both human-readable print and in barcode.
Installation of Batteries: New DTBMs will be provided by the Producer with batteries already installed.
Point of Receipt and Distribution : New DTBMs will, in all likelihood, be manufactured in Asia and received at a West Coast container port where, in close proximity, they will be inspected and accepted by NLS on a biweekly basis and distributed from that location by the Producer/Distributor, regardless of the distribution method employed. For purposes of the analyses, this location was assumed to be the Port of Long Beach, California, the largest container port on the West Coast and in the US.