ICT and Supply Chain Management

ICT and Supply Chain Management

1. Purposes of involving ICT in Supply Chain Management 2. Different models

3. Example – Implementation of ERP in Tanzania

4. Example – implementation of warehousing system MACS in 4. Example – implementation of warehousing system MACS in

Uganda, Cote d’ivior, Haiti, Rwanda, Guyana

5. Exampel – setting up PEPFAR distribution in Kenya

6. Example – Mobile phone solutions malaria programs in Uganda and Vietnam

7. Pro and cons

High level flow of supply chain

Major issues in supply chain

Supplier _{Freight Warehouse Freight} SDP Patient

Stock out Stock out

Items with expire dates Stock out Stock out No knowledge_{About treatement}

No knowledge of demand No knowledge about Demand at SDP Fake drugs No knowledge About treatement regimens

Items with expire dates Made to order

Lead times of up to 3 months Over stocking

No knowledge about Stock level at SDP

Over stocking No knowledge About central stock

About treatement

Lack of knowledge of central Stock level and central demand

No transparency No knowlede of cost of drugs

Transparency issue Let the village know

High level flow of supply chain

Technology and organization gives opportunities

ERP solutions Mobile phone

ERP solutions Mobile phone cover

Supplier _{Freight Warehouse Freight} SDP Patient

Mobile companies offer communication infrastructure Internet applications cover

ERP solutions Rolling forecasting

Based on information From ERP solutions

Mobile phone Cover > 80 % ERP solutions

Payment for results is Highly motivating

Payment for results is Highly motivating Knowledge of stock, demand

And procurement is base for Inventory management.

Mobile phone cover 95 %

Internet connection Less than 5 %

Physical flow issues example

Central warehouse Transporter

Supplier

Raw

material Packing Box 1

Transport to Phillips Production Box 1 Box 2 Arrival in warehouse Arrival Mombasa / Airport Order Box 1 Box 2 Check by Quality company Flagged in system Check by Quality company Flagged in system Check by Central store Quality, flagged in system blocking of batches if not approved Put away on racks Information to be kept Item number, qty, supplier, ETA, price

Flags on how far in the supply chain the phycial order is.

Physical flow

Central warehouse to SDP

Central warehouse TRANSPORT SDP

Item 1 Item 2 Item 3 Box 1 Box 2 Item 1 Item 2 Item 3 Box 1 Box 2 Transport to SDP Pick and pack

Box 1 Box 2 Item 1 Item 2 Item 3 Item 1 Item 2 Item 3 Check and signature on POD

Item 3

Signs off on POD Incl each item

POD goes back with driver Maintains ID of boxes received ID of boxes delivered POD’s received Maintains

Items in which box ID of boxes handed over Keep copy of delivery note signed by driver.

Reconsiles POD’s

Database

Receive copy of delivery note from Phillips

Receive copy of POD and copy of reconsiled data In database and generates reports

POD

ICT and Supply Chain Management

General situation

1. Big geographical countries

2. Good power and IT infrastructure in capital, poor infrastructure in the field

3. In Capital there will be industries with implemented ERP software packages and capable consultants.

software packages and capable consultants.

4. General good mobile phone coverage everywhere

5. General good access to basic internet everywhere using 3 G 6. General access to fairly strong IT people in the main city

7. No access to IT competence in rural areas

8. Decision makers on medical supply chains do not have supply chain competence - both on donor and local level. They have public health back ground or are medical doctors.

Types of implementations for

Supply Chain Management

• Implementing specific packages across many countries for specific

purposes. Examples are Orion and MACS for running Central Medical Stores.

• Implementation of standard “off the shelf” ERP packages allready

active in a country for industry purposes done by local consultants.

• Tailoring standard ERP packages to the specific business model

• Tailoring standard ERP packages to the specific business model

and distribution of one country, Cote d’Ivior.

• “Home made” solutions in spreadsheets and ACCESS made by

resident consultants

• UN organizations such as UNICEF, UNDP and others has their own

centrally managed closed systems which they as well operate in each country. Big ERP packages, heavy procedures.

• Small web based and phone based solutions, often free off the

Example MSD Tanzania, Orion, Epicor

1 – Failed Navision project

2 – Successfull ORION ERP implementation 3 – Nine years later new Epicor implementation

Example Kenya Pharma

DHL Systems

Vehicle tracking POD tracking Qty incoming Qty available

Qty delivered to SDP

Order QTY

On stock at SDP

Supplier

India Phillips_warehouse

SDP DHL freight DHL freight Phillips Solomon Qty Incoming Qty available Qty delivered to SDP POD

Kenya Pharma database

Qty Incoming Qty available Qty delivered to SDP POD Order QTY On stock at SDP Patients at SDP POD Qty incoming Qty available Qty delivered to SDP POD On stock at SDP Patients at SDP SDP order

Example Haiti, MACS

1 – Start out of scratch – purely on spreadsheets

2 – Implementation of warehousing system without analysis phase 3 – Now work on longer term solution

Example Cote d’Ivior, PSP

Sage ERP solution

REMED

Old procurement

RICI government accounting

Project:

1 – Original made Remed 2 – Original made Accounting

3 – Implementation of gov accounting 4 - Implementation of Sage

Example SMS reporting

Malaria programs, Uganda and Vietnam

Supplier _Central

warehouse

SDP

freight freight

SMS database

Reporting stock level HMIS information

Communicating treatement info

Project:

Two different systems exist.

- A free system used in Uganda under the Malaria program - A commercial solution used in Vietnam

DHL example

Network Distribution

“The most efficient proven method of servicing a multi client

distribution environment that ensures that inventory is delivered

at the right time at the right place at the right price”

• Proven Network Solution..

• Managed via EA Control

Tower

Tower

• Vehicle utilization & routing

managed by DHL SC.

• Costed on LTL-FTL basis

• Fully GPS track & trace

KEY ISSUES

• NGO’s and consultants introduce “home made” solutions, freeware,

spreadsheets for even administration of major supply chains.

• Governments and donors do not recognize the cost of

implementation.

• Budgets may cover implementation but not maintenance IT is not

considered a running cost with ongoing implementation. considered a running cost with ongoing implementation.

• Donors covering only cost of items and not admin and distribution

• Soft wares are implemented peace meal for specific item groups

administrated by specific donors

• Every donor brings a new set of requirements for reporting

• Local stores do not take control and lets donors implement

CHOICES AND OPPORTUNITIES

CHOICES

• Specific packages across countries ?

• Choice between using cheap home made solutions and

implementation of commercial supported systems

• Utilization of local ressources and packages with local success

?

• How to handle dealing with heavy UN or Global Fund systems ?

• How to handle dealing with heavy UN or Global Fund systems ?

OPPORTUNITIES

• Build applications on the web ?

• Strengthen implementation and project management locally ?

• Strengthen understanding of ICT within donor community