Directorate of Medical Materiel
Written by Colonel Marsha A. Langlois
This directorate of the Defense Logistics Agency
is the executive agent for medical materiel for DoD.
While the directorate provides end-to-end supply chain and contract management and exists to support DoD in times of war or crisis, it uses its peacetime sales to maintain the infrastructure, expertise and trading relationships needed to meet the demands of war or other contingencies. In addition to active duty military members, retirees and their eligible dependents, the directorate also supports various non-DoD customers such as Health and Human Services, Homeland Security and the Indian Health Service.
By its very nature, the medical materiel supply business does not conform to the traditional logistics model of buy, stockpile, maintain and distribute when needed. As medical science improves, the materiel required by the practitioners of that science is constantly changing. In addition, the materiel required to apply modern medical protocols is extremely clinician dependent. The result of these and similar factors such as limited shelf life, temperature sensitivity and pedigree-tracking, is a demand stream for a constantly changing array of relatively fragile items ranging from a small bottle of pills to huge state-of-the-art imaging systems.
For almost two decades the Medical Directorate has heavily leveraged the commercial medical distribution infrastructure of the United States to execute its worldwide support mission for medical materiel support. This strategy has significantly increased customer service in terms of lower handling cost and faster logistics response time while reducing the DoD logistics footprint required in providing that service. For consumables, the directorate contracts with medical prime vendors located throughout the country to obtain and deliver these less durable products, primarily pharmaceuticals and medical/ surgical items, to its customers. Under this program, the customer orders directly from the prime vendor and receives the vast majority of its materiel the next morning.
Approximately 98 percent of the directorate’s business is conducted electronically, leveraging the commercial business-to-business model for added speed and efficiency. To control the price of the materiel, the directorate or its Veterans Affairs partner establishes an agreement or contract with the manufacturer, thereby establishing the price the government will pay for each consumable. Once the prime vendor delivers the ordered materiel, the directorate pays it the price fixed with the manufacturer of the item plus the prime vendor’s contractual distribution fee. In the case of pharmaceuticals, this distribution fee is negative, returning approximately $12 million a month to the directorate’s customers. Approximately 85 percent, or $3.6 billion, of the directorate’s business is conducted through its pharmaceutical and medical/surgical prime vendor programs.
To fill voids in its consumables Prime Vendor Program, the directorate relies on its Web-based Electronic Catalog (ECAT). ECAT is used to reach niche medical markets— such as medical reagents, optical lenses and frames, and dental items—not normally handled by a nationwide prime vendor. The directorate contracts with these niche vendors and establishes discounts off the vendor’s product and price catalog of materiel. These catalogs are then added to the ECAT database and available to the directorate’s customers online. Using ECAT, the customer can browse the various catalogs, place items in its “shopping cart” and then purchase them with the click of a mouse. The orders are electronically transmitted to the vendor who delivers the materiel to the customer and bills the directorate. Like any state-of-the-art Web-based ordering system, ECAT combines the convenience of easy access with the efficiency of online shopping and periodic reordering to meet the varying needs of a wide array of customers worldwide. ECAT supports a very important 5 percent, or approximately $188 million, of the directorate’s annual sales.
Approximately 8 percent, or $333 million, of the directorate’s annual sales is for capital medical equipment. Much of this equipment is tailored by the distributor or manufacturer to meet the specific needs of a specific customer. Large, complex, expensive items such as entire computed radiography systems or computed tomography (CT) scanners and the service required to maintain them are typical of the items and services that fall into this category. To meet these requirements, the directorate contracts with a myriad of medical manufacturers and distributors who want to do business with the government to establish flexible quantity, configuration and delivery terms at negotiated prices. The directorate has a staff of biomedical engineers who assist customers in selecting and optimizing the equipment needed to meet the customer’s specific needs and then communicating those requirements to a vendor or vendors best suited to deliver and maintain the equipment.
The directorate supports the remaining 4 percent, or $146 million, of business using the traditional DoD depot system. The directorate relies on this traditional business model for two primary reasons. The first reason is that the item is so military unique that it is not available in the commercial sector, for example camouflaged bandages or an Army aidman’s bag. The second reason is that the directorate can do a more efficient job in meeting the unique distribution, delivery and handling needs of its customers. For example, with annual flu vaccines, the directorate consolidates its customers’ requirements, then orders, stores and choreographs the delivery of the delicate vaccines over time to meet the specific needs, handling and storage capabilities of each customer.
The directorate also manages a significant portion of the DoD Assemblies and Kitting program. Under this program, the directorate orders vast quantities of medical items and then contracts with the Defense Logistics Agency’s Defense Distribution Center (DDC) to configure the items into large assemblies, such as an Army field hospital, or smaller kits, such as the Army Lifesaver Kit, for delivery to deployed and deployable units.
The Medical Directorate’s business is demand-driven. Vendors with new products must demonstrate them to the clinicians supported by the directorate and the clinicians subsequently communicate a demand for the item in the form of orders or demand projections. Once the demand is communicated, the directorate or, in the case of pharmaceuticals, its VA partner, contacts the manufacturer or distributor and negotiates an agreement or contract that establishes a fair and reasonable price for the item. Once the price and other conditions are agreed upon, the product is added to one of the directorate’s ordering price and product catalogs and the programs they support, depending on the nature of the product and its anticipated demand pattern.
To meet its uniquely DoD readiness needs, the directorate strives to purchase access to inventory as opposed to buying and storing the inventory itself. The directorate has a number of strategic alliances and readiness programs that, like its peace-time support programs, leverage the commercial sector. Under these programs, the directorate contracts with manufacturers to maintain a fixed amount of stock and the capacity to deliver it within a specified time frame. Under certain circumstances, the directorate buys the capacity of manufacturers to maintain or manufacture, assemble and deliver items again in a specified time frame to meet DoD surge requirements. These arrangements empower the directorate to meet surge requirements of DoD with fresh products without the traditional costs of constantly purchasing, storing, maintaining, disposing and re-purchasing these items. To speed delivery of contingency-related materiel to the U.S. warfighter, the directorate has established “air bridges” on both the East and West coasts of the country. These air bridges combine commercial prime vendor distributors with overnight commercial air carriers to provide reliable, efficient and uncompromising support throughout the world.
Since the first Iraq war in early 1990s, the DSCP Medical Directorate has optimized its diverse array of support programs into a robust network that has ably supported DoD every day and in every crisis. Its combination of efficiency and reliability has empowered DoD and other caregivers to treat the sick and wounded and save lives under every condition imaginable. In the process it has saved the American taxpayer millions of dollars and pioneered a logistical business model that promises even better performance and expanded application in years to come. ♦
COLONEL MARSHA A. LANGLOIS, M.S., U.S. Army
Colonel Marsha A. Langlois, Medical Service Corps, U.S. Army, is the director, Medical Customer Operations Directorate, Defense Supply Center Philadelphia, Defense Logistics Agency.
Langlois is a graduate of Georgia Southern University with a Bachelor of Arts in history and a minor in English, and a Master of Science in materiel acquisition management from Florida Institute of Technology. She was commissioned a second lieutenant, Medical Service Corps, through ROTC in 1983 and is a graduate of the Army Medical Department (AMEDD) Basic and Advanced Courses, USAMMA Internship Program, Procurement Internship Program, Logistics Executive Development Course/Florida Institute of Technology, and Command and General Staff College.
Langlois’ past assignments include: assistant S-4, 21st Evacuation Hospital, Fort Hood, Texas; chief, Supply and Services, Medical Element, Joint Task Force-Bravo, Soto Cano Air Base, Honduras; adjutant, 1st Medical Group, Fort Hood, Texas; S-4; Battalion S-4, 142nd Medical Battalion, Fort Clayton, Republic of Panama; commander, Medical Company, 1st U.S. Army Support Battalion, 18th Airborne Corps, Sinai, Egypt; chief, Stock Control Division, 6th MEDSOM Battalion, Camp Carroll, Korea; procurement officer, U.S. Army Medical Research Acquisition Activity (USAMRAA), Fort Detrick, Md.; chief, Logistics Operations Division, Deputy Chief of Staff, Logistics, 18th Medical Command, Yongsan, Korea; chief, Materiel Branch, Logistics Division, Womack Army Medical Center, Fort Bragg, N.C.; deputy commander for Operations, U.S. Army Medical Materiel Center, Europe, Pirmasens, Germany; commander, U.S. Army Medical Materiel Center, Southwest Asia (Provisional), Qatar; and chief, Logistics Management Branch, AMEDD Center and School, Fort Sam Houston, Texas.
Awards and decorations include: Meritorious Service Medal with four Oak Leaf Clusters, Joint Service Commendation Medal, Army Achievement Medal with three Oak Leaf Clusters, Army Achievement Medal with one Oak Leaf Cluster, Joint Meritorious Unit Award, Army Superior Unit Award, Multinational Forces and Observers Medal, and the Expert Field Medical Badge. ♦