Magazine Article | March 1, 1998

Reducing Order Processing Time From Five Days To One

Source: Field Technologies Magazine

U.S. Government Printing Office spends $5.8 million dollars on technology to improve its customer service.

Integrated Solutions, March-April 1998
Despite fulfilling over a half-million orders in 1997, Mitchell Phelan, spokesperson for the U.S. Government Printing Office (GPO) Sales Program, felt the GPO had lost touch with its customers. "The process in place for fulfilling orders was not customer-focused, it was inventory-focused," Phelan says. "We had 32 different status codes for the publications. We had codes to indicate if a publication was on back order, if it was out of print, if it was pending reprint, or if it was supposed to be in stock at a warehouse or a bookstore. Often times, though, our customer service representatives could not simply tell customers if they could get a publication or not."

The GPO's Sales Program, headquartered in Washington, DC, has an inventory of over 10,000 publications. These include books, pamphlets, periodicals and CD-ROMs on subjects such as federal regulations, the value of savings bonds, and even declassified government reports such as those published on the Roswell, NM, Area 51, 1947 UFO incident.

The GPO Sales Program's customers include everyone from the "man-on-the-street," says Phelan, to private businesses that want to keep up on federal regulations. They also include law firms and government agencies that want multiple copies of a particular report. The publications are distributed from the GPO's warehouse in Laurel, MD, and through 23 bookstores located across the country.

Government Agency Earns Its Own Keep
"The GPO is not supported by the taxpayers," explains Phelan, the GPO's director, document technical support group. "It is supported by the sales of its products. In 1997, the GPO totaled approximately $70 million in gross sales. However, we came up short of the $3 million dollar goal we had set for an operating surplus."

Phelan attributes part of the lower-than-expected surplus to poor customer service. "Our system for processing orders and tracking inventory was composed of 18 different mainframe programs with little integration. We had separate programs for entering orders, for billing, for tracking inventory, for filing complaints, etc. It was taking us a minimum of five days to process an order. That is not competitive in today's publishing market where companies like (a Web-based book retailer) offer overnight delivery of publications."

With a goal of improving its order processing time for a "plain-vanilla" order to one day, the GPO Sales Program is currently spending $5.8 million on a technology upgrade to its order processing and inventory tracking system. "We are almost completely ripping out our old system. Most of the programs it used were written in archaic languages like COBOL and ALC and could not be integrated into the new system," says Phelan. "The expense of maintaining these outdated programs, including the need for them to be converted to recognize the Year 2000, helped us justify the cost of the upgrade."

Phelan explains that he expects the bulk of the GPO's return on investment (ROI) in its system upgrade to come from increased sales. "However, funding for the project would not be have been approved if the GPO could not have proven an (ROI) based solely on lowered operating expenses," he says. "The funding for the system came out of our accumulated operating surplus. But any GPO expenditure of over $50,000 has to be approved by the Joint Committee on Printing (JCP). Members of the House of Representatives and the Senate sit on the JCP. The JCP will not approve funding for a project unless clear 'hard dollar' savings, such as reduced operating costs, are demonstrated."

Delays Built Into Old System
Phelan contrasts how a typical order was processed with the GPO Sales Program's old system vs. how it will be processed when the upgraded system is operational in March, 1998. "With our old system, a customer might phone in an order for 10 copies of a publication on Wind Cave National Park in South Dakota. A customer service representative (CSR) would take the call and write down the order. The CSR would forward the order to a technician. The technician would check our bibliographic database to determine if we carried a publication by that title or on that subject. If we did, the technician would write down the stock number of the publication and pass it on to a second technician. That technician would check our inventory program to determine if there were enough copies available to fill the order. A third technician would be needed to enter the order into a program for printing picking slips," says Phelan.

"Because our old system ran 'batch processing' of data, the program for printing the picking slip would be run overnight. Thus the picking slip would not be generated until at least a day after the order was taken. Also, because the order processing center in DC is not electronically linked to the warehouse in Laurel, the picking slips would then be shipped to the warehouse. This took another day. Using the information on the picking ticket, a warehouse picker would then locate the publications on the shelf and deliver them to the warehouse's shipping department, where they would be packaged and sent out. A minimum of five days was elapsing from the time a customer placed an order until the time that customer received it."

New System Provides Single-Day Processing
When the upgraded system is implemented, a single operator will take an order, check the bibliographic and inventory information, and enter the information needed for a picking slip, says Phelan. The picking slip will then be printed directly at the warehouse, so the pickers can begin filling the orders immediately.

"Renaissance Software's (Lake Success, NY) International Logistics Software for AS/400 (ILS400), will enable the GPO's operators to use one program to access the information and to perform the tasks currently done by 18 different programs. The system's data and software will be stored on an IBM AS/400 with a one gigabyte database."

The GPO's Sales Program personnel will access the ILS400 software via a personal computer (PC) network running through six Windows NT servers. The GPO receives orders via phone calls or mailed-in documents. The GPO's Sales Program typically receives over 300,000 phone calls and over 1 million mailed-in documents per year. This correspondence includes orders, inquiries and complaints.

A phoned-in order will be keyed into a networked PC by the operator who takes the call. A mailed-in order will be converted to an electronic image through the use of Bell & Howell 3338 document scanners and ViewStar imaging software from Mosaix, Inc. (Redmond, WA). Then the image will be forwarded to an operator. The operator can view the image of the order with half of a monitor screen, and interface the ILS/400 program with the other half.

System Upgrade Updates Inventory Records Immediately
Once order information has been entered, the AS/400 database will be updated immediately. "In our old system, database updates were also done at night through batch processing," says Phelan. "This can cause picking slips to be generated for a greater number of copies of a publication than are available," he says. "Suppose, on the same day that an order for 10 copies of the Wind Cave National Park Handbook arrived, an order for 25 copies of the same publication also arrived. In our old system, the CSR that took the second order would have no way of knowing that 10 copies were already committed. So, if there were only 30 in stock to begin with, and the second CSR set in motion steps to generate a second picking slip for 25 copies, there would be a conflict at the warehouse."

Bar Codes Help To Track Inventory
The system upgrade also includes technology for better locating and tracking of inventory in the warehouse. Symbol Laser Radio Terminal (LRT) 3800 handheld radio frequency computers will be used by the warehouse pickers. The LRT 3800s are a combination bar-code reader and a personal computer with a screen capable of showing between eight and 20 characters. The LRT 3800s will be networked through radio frequency terminals.

When a picking slip is generated, a bar code will be applied which corresponds to the appropriate publication number. When the LRT 3800 reads the bar code, the location of the publication will be revealed on the screen. For instance, a three-digit code for area, row and shelf might appear.

Each publication will also have a bar code applied to it when it enters the warehouse. The bar codes will be printed on a Zebra 140XiII bar-code label printer. A picker will scan a publication's bar code when removing the publication from the shelf. The LRT 3800 will audibly confirm when enough publications to fill an order have been scanned. It will also notify another warehouse employee if the front picking area of the warehouse should be restocked with publications from the rear area.

Literature From Software Vendor Sparks Idea For Installation
Phelan first began considering an upgrade to the GPO's Sales Office order processing and inventory tracking system about 10 years ago. "I received some unsolicited mail from a software vendor. It talked about an order fulfillment operation similar to the GPO's, and how this operation was using advanced technology to improve its customer service. Reading this helped me realize that there might be something available 'off-the-shelf' that could be used to upgrade our order processing and inventory tracking system," says Phelan.

Phelan gained approval from the JCP to advertise for bids on a "turnkey integrated order processing and inventory management system." "As required by federal regulation, we ran a request-for-proposal in the Commerce Business Daily (The CBD is a daily list of U.S. Government procurement invitations, contract awards, subcontracting leads, sales of surplus property and foreign business opportunities. It is published in printed, CD-ROM, and Internet formats.)," says Phelan. "We received two bids but both were more than double the $2 million we had plugged in as the budget."

Because the GPO had never undertaken a project as large as the planned upgrade, Phelan says he was not entirely caught off guard by the higher-than-anticipated price tag. "We really did not know what to expect," he says.

Evaluating The Bids
Phelan then went back to the JCP, and armed with a new cost-justification analysis, secured the needed funding for the system upgrade. "Based on the condition of our current system, and the imminent and expensive work that was going to be required to make it Year 2000-compliant, securing the additional funding was not an overly difficult task," he says.

A team of technical and management personnel from the GPO's Sales Office then spent the next year evaluating the bids it had received. "Both vendors gave us demonstrations of their systems and showed us up-and-running installations similar to the systems they were proposing for the GPO," says Phelan. "Our team awarded points to each vendor based on its prospective system's ability to meet each of our criteria. A system's ability to address our need for integration of data, for instance, might have been worth 10 points. A system's ability to provide quick retrieval of information might have been worth five points, etc. Both systems scored about the same, and based on a lower price, Northrop Grumman's Electronic Sensors & Systems Division (ESSD) was awarded the contract over IBM."

ESSD is headquartered in Baltimore, MD, and has 15 other locations. ESSD produces radars and electronic systems in addition to being a supplier of automation products to the U.S. Postal Service and major private mailing companies. It is also a producer of image recognition systems for automated material handling and transportation applications including license plate and cargo container readers. ESSD employs approximately 11,000 people worldwide and is a division of Northrop Grumman Corporation, which is headquartered in Los Angeles and reports gross sales of $9.2 billion for 1997.

System Forces Sales Program To Get Back In Touch With Customers
After the contract was awarded to Northrop Grumman in December of 1996, work began on customizing the installation to fit into the GPO's environment. "We went through what Northrop Grumman calls a conference room pilot. Management personnel from the GPO Sales Program's various departments met with engineers from Northrop Grumman. They hammered out the details such as the look of the interfaces and the type of information that would be transmitted from the order processing center to the warehouse."

It was during this stage, Phelan says, that he realized how far away from being customer-oriented the GPO's sales office had become. "For instance, for years we had produced picking tickets which included codes to identify what government agency or bureau had placed an order. This procedure predated computers, which can store this information electronically. Still, we were attempting to recreate the same type of picking tickets with our new system, when somebody stopped and asked, "why?"

"It wasn't easy to convince everyone involved that all we needed were "dumb" identification numbers on our tickets, but after much arguing we moved forward with the change."

Phelan says resistance was also encountered when the 32 status listings of publications were reduced to two. "When it comes down to it, customers only want to know if they can get a publication or not. Information regarding whether it's on back order, or out of print pending reprint, or where it is stocked, is irrelevant to them. That's inventory information, not customer service information. But we had never looked at it from the customer's point of view before. Designing a new system gave us the opportunity to step back and do that."

Phelan adds that the new system will also provide the GPO Sales Program's employees more opportunities to step forward and service customers. "I do not expect to see an immediate increase in our sales volume. But, as we become more comfortable using the new system, we will redeploy the resources we have been using to enter data into 18 separate inventory and order processing programs. We will use these resources to improve our customer service in ways such as tracking our customers' ordering histories and making an inquiry when a publication similar to ones they've bought in the past is published. When we make these types of improvements in customer service, I expect to see a significant increase in the GPO's sales."