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Sourcing and Global Distribution of Medical Supplies

Sourcing and Global Distribution of Medical Supplies

Adam C. Resnick
William Welser
Keenan D. Yoho
Copyright Date: 2014
Published by: RAND Corporation
Pages: 101
  • Cite this Item
  • Book Info
    Sourcing and Global Distribution of Medical Supplies
    Book Description:

    The Department of Defense provides medical care to service members all over the world and must ensure that health care providers have the proper quantity and quality of medical materiel. RAND investigated opportunities to gain efficiencies in the logistics enterprise without sacrificing capability, notably through minimizing intermediate materiel handling, seeking greater value from commercial freight, and streamlining warehouse operations.

    eISBN: 978-0-8330-8518-4
    Subjects: Health Sciences, History, Business, Technology, Management & Organizational Behavior

Table of Contents

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  1. Front Matter
    (pp. i-ii)
  2. Preface
    (pp. iii-iv)
  3. Table of Contents
    (pp. v-vi)
  4. Figures
    (pp. vii-viii)
  5. Tables
    (pp. ix-x)
  6. Summary
    (pp. xi-xxii)
  7. Acknowledgments
    (pp. xxiii-xxiv)
  8. Abbreviations
    (pp. xxv-xxvi)
  9. 1. Introduction
    (pp. 1-8)

    The Department of Defense (DoD) provides medical care to its service members whether they are at their home station or deployed, at locations all over the world. In order to provide this patient care, DoD must ensure that its health care providers have the proper quantity and quality of the required medical materiel resources. In the United States, manufacturers of drugs and medical devices must register with the Secretary of Health and Human Services and receive approval for the items they sell.⁵ Hence, the vast majority of medical materiel used in patient care in the United States is regulated by...

  10. 2. Medical Logistics in COCOMs
    (pp. 9-28)

    The Chairman of the Joint Chiefs of Staff designated that a TLAMM be responsible for providing medical logistics support to joint task force commanders in deployed military operations.¹⁵ Through memoranda approved by the Chairman of the Joint Chiefs of Staff, military units assume these roles in each of the geographic areas. (This role was recently codified in USPACOM when the 18th Medical Group assumed the role as the TLAMM-P.¹⁶) These agents are tasked with ensuring that medical materiel is available to all operational military units in the region. By describing the lead agent characteristics in each of the geographic COCOMs,...

  11. 3. Contracting / Catalog Management
    (pp. 29-35)

    DoD spent approximately $4.7 billion in fiscal 2010 to procure medical materiel, and nearly 80 percent was procured through acquisition programs (PV and ECAT) managed by DLA and using federal pricing agreements. These items are purchased at prices determined to be advantageous to the federal government, through methods such as the Federal Supply Schedule, Distribution and Pricing Agreements, or other contracts established by DLA or the Department of Veterans Affairs.

    When considering opportunities to gain efficiency, organizations frequently look for ways in which operations that are currently fractioned can be consolidated to gain efficiencies and implement best practices. We can...

  12. 4. Transportation to First Delivery Location
    (pp. 36-40)

    For PV-supplied materiel ordered by end users in the United States, transportation from the supplier to the first delivery location is provided through the PV program at a distribution fee established in the PV contract. Further, all MTFs and some operational units are designated as ROFs and can place orders to the PV and ECAT suppliers that, depending on customer location, will be delivered within negotiated delivery times, generally one to two days. Operational units that are not ROFs typically set up accounts with MTFs at their installations, and order materiel to the MTF and pick it up locally.


  13. 5. Warehousing
    (pp. 41-50)

    DoD stores medical materiel locally at unit locations and centrally at DoD warehouses. Each unit that consumes medical materiel must maintain a supply of materiel to meet demand that arises between supply shipments. In the United States, supply from PVs can reach purchasers in one to two days, so units who order directly from these suppliers do not need to maintain very large inventories. Outside the United States, where supply lead times are longer, units must maintain larger inventories to meet demands over these time periods. In addition to storing materiel at the end-user locations, DoD maintains inventories of medical...

  14. 6. Transportation to End-User
    (pp. 51-64)

    In the United States, most consumers of medical materiel are ROFs in the PV contracts that receive materiel direct from PVs. Most operational units, such as infantry or combat units at Army installations, place orders with the MTF at their installation, which places the orders for the operational units along with the rest of its medical materiel orders. Operational units that place orders with local MTFs can use unit or installation vehicles to pick up the materiel when it arrives at the MTF.

    In USSOUTHCOM, units either receive medical materiel from military service suppliers (in the instance where the MTF...

  15. 7. Conclusions
    (pp. 65-68)

    This project began with the sponsors asking whether efficiencies could be gained in the medical materiel distribution structure, through the existing framework, or through a new framework of military service, DLA, and commercial infrastructure. The sponsors specifically asked us to investigate opportunities for efficiency in purchasing power, IT, and warehousing. We proposed including transportation in the study.

    The purchase price of medical materiel represents more than 85 percent of the cost associated with medical materiel distribution. In total, DoD purchases $4.7 billion of medical materiel annually, $750 million of which is distributed OCONUS. DLA has incorporated 80 percent of medical...

  16. Appendix. Actions Subsequent to the Project Final Briefing
    (pp. 69-72)
  17. References
    (pp. 73-75)