Section 3 – Multiyear Transition Plan
The estimates and assumptions used in analyses by the project team for the development of the multiyear transition plan are shown in Appendix 1. These assumptions and estimated values of production factors were used in a multiyear computer-based planning model developed for use as a planning tool, which has been provided to NLS.
Estimates for DTB production and distribution operations are based upon results from the DTB Distribution Study, while those used for DTBM production and repair are primarily based upon results from the Machine Transition Study and secondarily upon NLS staff estimates. Logic from the computer-based models developed for both projects was integrated into a single multiyear planning model, incorporating both audio book and playback machine operations.
As described in Section 1, the current baseline multiyear transition plan is that which was submitted by NLS to Congress on July 17, 2006. This is effectively a consensus plan for the All Mass-Duplication DTB Distribution System, developed using results from the ManTech planning model as documented in the two Transition Plan draft reports, results from other analyses performed using the planning model which were provided to NLS, and from independent analyses performed by NLS.
The multiyear baseline transition plans for playback machine and audio book operations are described in the two sections below. In those instances in which actual (i.e., expected) activity levels are expected to differ significantly from activity levels associated directly with budgeted expenditures for the particular year, the expected levels for that year are used for long-term planning and such differences are noted.
The transition plan for playback machine operations is shown in Appendix 2 and covers nine fiscal years, i.e., FY 2006—FY 2014. While not all playback machine-related activities are shown, those that constitute the majority of total activity and associated costs, i.e., for machine production and repair, are included.
The computer-based planning model was updated with the most recent CBM repair parts inventory and procurement plans data, obtained from NLS, and uses CBM inventory data as of the beginning of FY 2006. The number of CBM repairs to be performed in the future will effectively be constrained by the maximum number of repairs that can be performed with available repair parts (i.e., labor, although a constraint, would ultimately not be the binding constraint). The estimates are based upon February, 2006 CBM repair parts inventories augmented with planned CBM repair parts lifetime buys during FY2006—FY2008 (excluding batteries, which are expected to be available for purchase beyond FY 2008, and for which lifetime buys are unnecessary).
- CBMs Produced - CBMs will be produced through Option Year 3 of the C1 production contract, and production will cease by the middle of FY2007. About 42,000 units will be built during FY 2006, and about 21,000 during FY 2007.
- CBM Deficiency/Waiting List - There are no actual deficiencies of CBMs in this plan, i.e., the entire deficiency is associated with an E1 deficiency. The Available-to-Assigned ratio for all CBMs never drops to zero, but does drop to about 2% at the end of FY 2009 before rebounding to over 11% by the end of FY 2010.
- CBM Available-to-Assigned Ratio – This ratio is higher than needed in all years except FY2008 and FY2009, although there is no actual deficiency in either of those years. Planned DTBM production, albeit at a rapid implementation rate once DTBM mass production begins, is starting somewhat later than previously expected, with smaller quantities produced during FY 2008 than earlier envisioned. The assignment protocol for CBMs assumes that 90% of pre-transition patrons who receive DTBMs will also keep their CBMs, and 70% of post-transition patrons who receive DTBMs will also be issued CBMs (this rate is assumed to later decline to 50%). Either or both of these policies could be tightened somewhat in order to increase CBM availability, if necessary, at this relative “pressure point” in the transition.
- CBMs In-Repair - The In-Repair queue of CBMs is expected to grow each year from FY 2006 through FY 2009, then decline to a low in FY 2011, and then increase through FY 2014. However, the number of CBMs in-repair should not be a problem after FY 2009 in terms of available CBM inventory levels.
- CBM Repairs Performed, Volunteers/MLAs – CBM (non-E1) repairs will be performed at capacity through FY 2009 (volunteer capacity is assumed to decline at 3% per year), i.e., CBM repair parts availability will not be the binding constraint during the FY 2006 – FY 2009 time period, rather labor will be the constraint. Repairs by volunteers/MLA staff will then be ramped-down in FY2010 and FY2011 somewhat gradually as CBM repair parts are used-up and volunteers/MLA staff shift over to repairing DTBMs. No CBM repairs after FY 2011 will be necessary given the expected available CBM inventory and patron demand.
- C1 Commercial Repairs – Repairs of C1s by commercial repairers will be performed at capacity through FY 2009, at which point all CBM repair parts slated for commercial repairs will be exhausted. The plan assumes that C1 commercial repair capacity will be being ramped-up to 6,000 repairs per year (using two contractors) for FY 2007—FY 2009, which will timewise be the pressure-point of CBM inventory availability.
- E1 Commercial Repairs – Repairs (all commercial) of E1s will be supported by NLS through FY 2007, but not beyond. Near capacity (over 4,000) units will likely be repaired during FY 2006, then just under 2,500 during FY 2007. E1 commercial repair would then cease after FY2007.
- DTBM Production – It is assumed that mass-production of DTBMs will begin in July, 2008 at a rate of 15,000 units per month, and continue at that rate through the end of FY 2011, i.e., September, 2011. This means that 45,000 units will actually be produced during FY 2008, i.e., 15,000 units per month during July - September 2008; 180,000 units per year will be produced during FY2009, FY 2010, and FY2011; 35,307 will be produced during FY 2012; and 30,000 will be produced per year after that (i.e., at a "maintenance level"). The FY 2008—FY 2012 total matches exactly the FY 2007—FY 2012 total in the NLS budget plan, i.e., 620,307 DTBM units. There will actually be no DTBM production during FY2007, and some production slated for FY 2011 will possibly occur during calendar 2011 but in early FY 2012 rather than late FY 2011.
- DTBM Deficiency/Waiting List – The waiting list for DTBMs will disappear sometime during FY 2011, i.e., all patrons who want DTBMs will have them before the end of FY 2011 given planned production of DTBMs.
- DTBM Available-to-Assigned - A "forced availability factor" of 5% is assumed for the early years of the transition period. That is, libraries and MLAs would retain a 5% buffer inventory of DTBMs to serve as replacements for DTBM-only patrons with defective machines. This ratio will then grows to above 10% in FY 2011 and remain there.
- DTBMs In-Repair – In this plan, there is no DTBM In-Repair queue. That is, it is assumed that all defective DTBMs are fixed promptly, and that a queue is not permitted to grow. This objective is achieved by setting DTBM commercial repair capacity at a very high level, although it turns out that only a portion of this maximum capacity is expected to be utilized. In reality, at any given time there will, of course, be a queue associated with both defective and repaired DTBMs in the mail and with nominal inventories awaiting repair in repairers’ facilities. But it is assumed that sufficient repair resources, whether volunteers/MLA staff and/or commercial repairers, and repair parts, are applied so that DTBMs do not accumulate in repair queues.
- DTBM Repairs, Volunteer/MLA - Volunteers and MLA staff would begin to perform DTBM repairs during FY 2010. Before FY 2010, all energies should be concentrated on CBM repairs, during the time period that is likely to be a pressure-point for CBM availability, and when most DTBM repairs would be covered under manufacturer’s warranty. It is assumed that volunteers and MLA staff will ultimately handle 75% of DTBM repairs.
- DTBM Repairs, Commercial – The timing of commercial repair of DTBMs will initially be somewhat dependent upon the warranty provision of the DTBM production contract. It will effectively begin in earnest during FY 2009. It is assumed that commercial repairers will ultimately perform 25% of DTBM repairs, although during FY 2008 and FY 2009 they will perform all DTBM repairs because volunteers and MLA staff will be focused exclusively upon CBM repair.
The transition plan for audio book operations is shown in Appendix 3 and covers six fiscal years, from FY 2007 through FY 2012. While not all audio book-related activities are shown, those that constitute the majority of total activity and associated costs are included. The key points are as follows:
- Mass-duplication of new RC titles will continue through FY 2010, but be terminated after that time. After FY 2010, almost all patrons who want DTBMs will have them, the EOQ minimum threshold for RC mass-duplication will be breached, and RC mass-duplication itself may be obsolete. All 2,000 new audio book titles per year will be produced in RC format during these years, however. But the number of copies per title will be "scaled down" as shown in the table, at a rate which declines in proportion to the anticipated demand for RCs.
- Mass-duplication of new DTB titles will begin in FY 2007, at a very modest level, and continue thereafter. For DTBs, however, the number of new titles produced per year will be gradually ramped-up, beginning with 50 "test" titles in FY 2007, then 650 titles in FY 2008 and then increasing to 2,000 titles by FY 2012. The new titles with the greatest anticipated demand will be those selected for mass-duplication of DTBs in years in which less than 2,000 titles are mass-duplicated in DTB format. The number of copies per title will be "scaled-up" as shown in the table, at a rate which increases in proportion to the anticipated demand for DTBs.
- A maximum of 20,000 Retro titles will be available for mass-duplication of DTBs. If all 20,000 titles are selected for mass-duplication, then the average number of copies produced per titles would be 55. It is probably more likely that some subset of these titles will be produced, even if a majority of the titles, and in average lot sizes larger than 55 copies (because there are 132 libraries in the network, i.e., 57 RLs and 75 SRLs). Whatever the specific production strategy implemented for the Retro collection, it is estimated that approximately 1,100,000 copies will be mass-duplicated, primarily during FY 2008 and FY 2009, with the majority during FY 2008. The annual copy volumes shown for Retro title production in the table attempt to apply "load leveling" to DTB mass-duplication, of combined new and Retro title copy production during FY 2008 and FY 2009. In this plan, total annual DTB copy production requirements are more uniform for these two years, while the total budgeted number of Retro copies is produced, with most copies produced in the budgeted year (i.e., FY 2008).
- The production levels for new titles and associated copies, for RCs and DTBs, were determined by repeated "What-If" analyses in attempts to satisfy fiscal constraints while optimizing service levels. The levels of combined RC and DTB production of new titles and copies of new titles are relatively constant across all years in the plan. With the single exception of FY 2011, in which 1,731 new titles will be produced, 2,000 new titles are planned for production in all years. After production of over 1,800,000 copies of new titles in FY 2007, combined annual production of new titles declines to approximately the 1,600,000 copy level for the next four years, followed by a return to the pre-transition level of over 1,800,000 copies in FY 2012.
- Flash Drive cartridges would first be purchased in late FY 2007. The quantities procured would be ramped-up in subsequent years with the needs for DTB mass-duplication, with reconditioned cartridges beginning to reduce this requirement beginning in FY 2011.