For: Digital talking book distribution analysis. Task 1 - Distribution system analysis and selection (Final report : September 16, 2005)
System Analysis and Selection - Executive Summary
This report presents findings and recommendations developed by ManTech International Corporation for the Library of Congress, National Library Service for the Blind and Physically Handicapped (NLS), for work performed under Order Number GST0005AF5023. The objectives of Task 1 of the project, which are the subject of this report, were to develop a mathematical model of the future distribution system for Digital Talking Books (DTBs), estimate the costs for three distribution options using the model, evaluate the options considering non-economic as well as economic factors, and recommend the best option for implementation.
The distribution options evaluated were: (1) an All Mass Duplication option, whereby distribution of DTBs would use the current business model in which all NLS-produced titles are mass-duplicated, allocated to network libraries, and are stored in library collections and circulated to patrons; (2) a "Hybrid" option, in which the titles with the greatest anticipated demand constituting a minority of the number of titles produced would be mass-duplicated, allocated to libraries and distributed per the current business model, but the titles anticipated to be relatively less popular and constituting a majority of the number of titles produced would be Duplicated-on-Demand (DOD) at one or two automated DOD Centers operated under contract for NLS; and (3) an All DOD option, in which all DTB titles would be distributed from DOD Centers. Under all options, all patron contact would be with network libraries and none with the DOD Centers, other than the receipt and return of the books themselves. Under the Hybrid and All DOD options, libraries would automatically place orders with DOD Centers via telecommunications, and receive confirmation of order receipt and order status via the same.
The analysis did not consider recorded magazine operations, only those for recorded books. The focus of the analysis was a feasibility rather than implementation study; Task 2 of this project focuses upon system design. However, processes for the duplication of DTBs were conceptualized and the functional requirements, resource requirements and associated costs for the same were estimated. Analyses were based upon steady-state distribution operations after all patrons in the program have Digital Talking Book Machines (DTBMs), and it was assumed that the implementation of DTBMs would be identical under all DTB distribution options. NLS and network library distribution costs were considered, but not those of the USPS. The impact of the distribution options upon network library costs were based upon the NLS Life Cycle Cost (LCC) model. It was assumed that the quantity and mix of DTB titles produced by NLS in the future and demand for the same would be identical or very similar to that of the current system, and that title composition and demand would be identical under all DTB distribution options.
Data were collected from NLS, network libraries and several other sources, compiled and analyzed in order to develop a statistical profile of the current system and to model the future DTB distribution system and estimate costs for the same. These data collection, compilation and analyses are described in Section 2 of the report. Section 3 of the report presents the cost model developed, the logic employed, the default or baseline values used for the "key variables" and factors in the model, and sensitivity analyses performed for different workload splits in the Hybrid model. In Section 4 of the report, an Evaluation Matrix is described which employs weighting factors for non-economic as well as economic factors, and the distribution options are scored and evaluated by applying the weights in the Evaluation Matrix.
It was determined that the All DOD option is not economically feasible. The Hybrid option is clearly more economically efficient than the All Mass Duplication option (ref. Appendix 62). Its implementation will result in significantly lower costs for DTB distribution for the system as a whole and for network libraries relative to the Mass Duplication option. NLS costs in the most efficient new title mass-duplication range will be equal to or less than NLS costs for the All Mass Duplication option. In considering the totality of the economics of the system, the economics of its components individually, and the constraint regarding sufficient workload for two Centers (which are recommended), it is recommended that a title-based Hybrid distribution model be implemented with the number of new titles mass-duplicated falling into a range from 30%-to-50%, with 35% - 45% being the best range for implementation. At these production levels: (1) significant systemwide savings occur (about $18.5 million versus $24.6 systemwide annual costs); (2) NLS incurs less cost than the amount that it would incur for the All Mass Duplication option; ( 3) libraries realize significant savings relative to an All Mass-Duplication mode; and (4) sufficient DOD workload would exist to support two Centers employing state-of-the-art production methods and information technologies that will realize economies of scale.
The Hybrid option is a superior alternative to the All Mass Duplication option when non-economic factors are considered in tandem with costs using the Evaluation Factors Matrix for the range of 25% - 40% of new titles being mass-duplicated, and only very slightly less than the All Mass Duplication option for mass-duplication levels of 45%-50%. While the Hybrid will be somewhat more complex to implement and will have more inherent operational risk than will the All Mass Duplication option, its impact upon patrons will be almost the same as that for the All Mass Duplication option and it is more cost efficient.
DTB distribution should begin with the mass-duplication option only, probably for the first two or three years of the transition period, but then evolve to a Hybrid distribution option of some type thereafter. The specifics of the transition period are to be addressed later in this project. This is recommended due to both the lower volumes of mass duplication that will be required during the years in which RC duplication will also continue (possibly fewer titles as well as fewer copies), and so that DTB flash memory cartridge duplication technology and library ADP systems and procedures can be developed in order to facilitate DTB DOD. There are several ways in which the Hybrid option can be implemented vis-a-vis new title production, and/or library collection weeding and title migration, and/or a combination of both the "title-based" and "time-based" Hybrid strategies. Such variations upon the common theme of the Hybrid option will be closely examined and analyzed further in this project, and the most favorable approach identified and developed for implementation in subsequent study tasks.