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[DATE][SPEAKERS NAMES]
The 5th Global Health Supply Chain Summit
November 14 -16, 2012Kigali, Rwanda
Measuring Supply Chain MaturityDiane Reynolds
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Establishing a supply chain maturity assessment model for the public health environment to drive investment decisions
Supply chain performance assessment - to understand a high-level status of the supply chain, comparing current-state operating environment and levels of supply chain performance against best practices,
identify improvement opportunities,
anticipate business impact and
establish a program that drives
improved business performance.
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Common problem statements expressed in the public health supply chain.
• We need a new warehouse we don’t have enough space
• We don’t get forecasts from the facilities to order the right commodity
• The vendors never deliver the quantities we order
• We need an ERP to plan the delivery of commodities
• There are major stock outs at facility level because of the depot
• We need to be trained and tour other countries to learn best practice
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Tools and frameworks to assess the supply chain maturity review both capability & performance levels.
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Capability: Measures the capability of a supply chain, benchmarking against best-practice standards
Capability Maturity Model Diagnostic tool
Performance: Set of indicators that comprehensively measure the performance of a health supply chain
Key PerformanceIndicator guide
Maturity Level Maturity Level Description
1- No/Minimal Informal processes and little or no systems
2- Marginal Basic not used consistently and mostly manual systems
3- Qualified Processes are defined and documented with some technology
4- Advanced Practices
Processes are well defined and internal integrated technology
5- Best Practices
Practice continuous improvements, fully integrated technology
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Establishing capability & performance attributes of supply chain maturity enables planning & performance management
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Capability:•Benchmark to best practiceP
erfo
rman
ce:
• Est
abli
sh c
urre
nt p
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• Prioritize strengthening areas• Measurement of intervention• Monitor progress• Demonstrate results
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Supply Chain Maturity Assessment:South Africa Case Study: Applying the assessment to a systems strengthening decision-making process
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Step 1: Environmental Study
Region
District
SDP
Functions
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Step 2: CMM Diagnostic Tool implementation
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SCORES Reg/ Prov
Dist SDP NDoH
Functional Areas
Product Selection N/A N/A
Forecast and Supply Planning
N/A
Procurement N/A N/A
Warehousing and Inventory Management
Transportation N/A N/A
Dispensing N/A N/A
Waste Management N/A N/A N/A
• Initial assessment part of a larger regional Field Office study• Included provincial, district and SDP assessments (no central)• 8 sites assessed (Depot, region depot, tertiary Hospital, clinic levels)
Capability 1 2 3 4 5
Receiving □ Items received are not checked □ Received inventory is not recorded
□ Received product is confirmed against pack slip/invoice to be the product ordered□ Received product is counted and compared to quantities on packing slip/invoice□ Items received are entered into bin cards/paper based inventory
□ Received items are entered into simple software based stock keeping system (inc. Access/Excel)
□ Product is blindly received (compare to invoice/packing list after) into WMS and then validated against packing slip/invoice
□ Received items are entered against Purchase Orders and ASNs in a Warehouse Management System (WMS)
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Step 3: KPI assessment tool implementation
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Indicators1) Stock out rates
2) Excess stock
3) EDL compliance
4) % of products that meet QA standards
5) Off-contract spend
6) % of emergency orders
7) Order Fill Rate
8) Expiry
9) Pricing Variance
10) Order Cycle Time
11) Stock turnover rate
12) On-time delivery
13) Distribution cost
14) Inventory discrepancy
15) Backorder Follow the transaction, paper trails & data
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Step 4: Scoring the assessment tools
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Step 4: Reporting
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Facility capability level data
Country level data
Function by enabler level data
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Step 5: Evidence-based decision-making
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Sequence Interviews
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Step 6: Intervention based on recommendations
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Key Improvement Areas and Financial Impact (targeted savings)
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Step 7: Measuring the ROI
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Key Improvement Areas and Financial Impact (targeted savings)
Back orders
Immediate saving
Long term saving
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Lessons learnt in the pilots (South Africa, Botswana and Paraguay) and next steps
• Finalization of the KPI guidelines – selected core measures• Collaborate with UNC to review and define an “ROI” approach
• Templates were created as a reference for vertical consistency within functional areas
• Conversion to a check box format to make maturity level descriptions succinct
• Include the addition of a SDP specific questionnaire
• Provides a practical, cost-effective approach to supply chain assessment for the public health supply chain
• Middle ground between an expensive, statistically significant assessment based on site-visits and qualitative workshop-based self assessment tools
• Comprehensive reporting enables informative client discussions to prioritize and define improvement programs
Lessons Learnt
Next steps
Practical, relevant & cost effective
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