NASA, E-Business, and the Supply Chain Challenge
Supply chain — The process that moves goods from the initial stages of planning and acquisition through supply, production, and distribution
If only it were that easy. Supply chain management continues to garner a growing segment of the e-business press, even as corporations and government agencies drag across the finish line of other, less than fulfilling e-business projects. The challenges are great from both structural and policy perspectives. One of many questions — can supply chain management deliver on its promises in the federal environment?
This paper will introduce several of the key projects that are underway at NASA — those within the Office of Procurement, including shared interagency initiatives, and those managed across the agency under the auspices of the integrated financial management (IFM) program. The IFM program will implement enabling technologies within NASA to provide access to better management information, leading to better decision-making. Together, these efforts are developing the radical changes necessary for success and providing a strategic platform for developing and managing the supply chain of NASA's projects and programs and optimizing business relationships.
Just as one office within a corporation cannot go it alone, neither can one agency develop an exclusive business environment with supporting processes that are separate from other federal agencies. NASA's Office of Procurement is engaged in a two-pronged strategy for improving the acquisition process. First, since we work within the federal environment, we actively engage with interested agencies to reengineer processes in order to take advantage of Internet-based tools, improving access and responsiveness to the business communities. For example, several Internet tools have been developed in-house at NASA. They are shared among interested agencies to advance streamlined processes that improve the buying and selling process across the federal "marketplace."
Our second focus is the IFM program — an agency-wide reengineering initiative. All of these efforts are evolving under an environment that is different from the commercial marketplace. For some time, the government has been interested in adopting commercial best practices whenever possible. However, the socio-economic environment inside the federal government has required some tailoring of these ambitions. Laws and public policy have evolved over time to ensure that federal agency requirements are completed to the maximum extent and that small and small disadvantaged businesses are encouraged to participate. This participation is especially important to NASA, where many of the innovative technologies and processes that power our research and exploration activities are developed by small businesses and the academic communities.
Although NASA has a strong record of encouraging small business participation, we are also faced with a declining number of large contractors in the aerospace industry. Continuing consolidation has left us with a limited number of large vendors capable or interested in tackling high-risk, long-term assignments. An effective supply chain will improve accessibility and open more opportunities for vendors to develop partnering relationships. Beyond the business process, engineers and scientists will see more collaborative opportunities to share and work together before, during, and after the agency's missions and projects. These opportunities generate an incredible stream of data and experiences that will be captured more systematically within a developing knowledge management culture supported by the new and improved business systems.
The Office of Procurement has been an active player in the development of federal e-business since the acquisition community was targeted as the logical starting point for electronic commerce in 1993. Early efforts led to the development of Internet tools designed to improve access and lower barriers that, over time, had led to a stilted and hard-to-crack procurement process — especially for first-time vendors. For instance, NASA's acquisition Internet service (NAIS) pioneered an electronic posting system. The NAIS team, a grass roots community of interested users, latched on to the low-cost and intuitive "browser" technology to develop a simple tool that worked with minimal training and deployment costs. This system provides instant and equal access to the agency's business opportunities, allowing small businesses to learn about opportunities at the same time larger companies do and compete for the opportunity on a better footing, with more time to develop a higher quality proposal.
Meanwhile, many federal agencies struggled with their own e-business initiatives. Although NASA had a posting system that worked, several agencies piloted their own unique posting systems for business opportunities. This only fueled exasperation within the business community — vendors were being asked to trek from Web page to Web page in search of opportunities at each federal agency. Several agencies, including NASA, formed an interagency working group with a charter to develop a more unified approach in developing and using Internet tools to improve the acquisition process. NASA's posting system was selected as the model of an interagency tool and formed the basis of today's government-wide system, known as FedBizOpps. This entry point for all business opportunities is an important first link in the federal government's supply chain. Follow-on tools and process improvements may follow this now-proven development path — select from working tools, prototype on an interagency basis, and if successful, deploy government-wide.
Although effective tools are important, even greater headway is being made in process improvements. Across many functional areas, including procurement, agencies have concluded that Internet tools by themselves will only go so far in improving efficiencies. The real payoff will be in transforming the underlying processes that often inhibit or even preclude the rollout of Web-based tools and improved, commercial-like operations. More recently, the current administration has established expanded e-government as one of the top priorities under the President's management agenda.
The Office of Management and Budget (OMB) is spearheading efforts to effect change across a broad range of services that directly benefit the varied citizen communities. NASA is taking an active role in working with agencies to develop policies, practices, and tools that support a more integrated acquisition environment — one attuned to supporting a more effective supply chain at the federal level.
Our second focus area for improving the agency's supply chain management is the IFM program. The agency's existing financial and business-related systems are old, inadequate, and in frequent need of repair. With continued budget pressure to deliver cost-effective missions and results, there is no strategic value in maintaining the current piecemeal approach. Assets cannot be optimized and there is very limited ability to integrate or consolidate operations across the 10 NASA centers. Material procurement is often redundant with excess "just in case" inventories. More importantly, the information generated by the multitude of center-specific systems is inconsistent across both internal processes and external business partners.
The mission of the IFM program is to improve the financial and procurement management systems and processes throughout the agency by re-engineering NASA's business infrastructure and implementing technologies to optimize supply chain management. The IFM program will provide the necessary building blocks with new systems that will provide an integrated support program to reduce inventories (leads to vendor-managed inventories), reduce procurement costs, create less waste, and deliver shorter program support cycle times.
The commercial market seeks competitive advantage over their peers through effective supply chain management; NASA's focus is an effectively managed supply chain that delivers a measurable advantage to the taxpayer — more effective stewardship of their tax dollars while delivering responsive and exciting science and space exploration programs.
How will a reinvigorated supply chain improve the Office of Procurement's support to the agency's mission? With initiative, planning, and integrated processes, procurement professionals can focus on higher-value roles. Rather than being tied up on processing routine transactions, they are free to become more involved in significant transactions and to negotiate real savings. The business culture mentioned earlier will not change anytime soon, nor are we seeking an environment without it. Our goal as new tools and improved processes take hold across the agency, will be to encourage businesses to take full advantage of the improved benefits offered on their side of the business equation. Our suppliers will have better access to procurement opportunities, order data, invoice data, and (most importantly to them) payment data. More accurate data and self-service access will make our vendors "smarter" — timely information will forge a more trusting environment.
At NASA, supply chain management will do more than improve the supply-related business process — it will revolutionize the relationships among the scientists and engineers inside NASA and their suppliers and research partners outside the agency. These improved relationships will lead to the level of efficiency that Congress demands and American taxpayer deserves.
