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

8. Principles and opportunities

High level flow of supply chainMajor issues in supply chain

Supplier WarehouseSDP

Freight Freight Patient

Stock outStock outItems with expire dates

No knowledge

About treatementStock out

Stock out

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

What arrives and what it cost

High level flow of supply chainTechnology and organization gives opportunities

ERP solutions Mobile phoneERP solutions Mobile phone cover

Supplier WarehouseSDP

Freight Freight Patient

Mobile companies offer communication infrastructureInternet 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 warehouseTransporterSupplier

Raw

materialPacking

Box 1

Transport to PhillipsProduction

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 2Item 1

Item 2

Item 3

Box 1

Box 2

Transport to SDPPick 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

DatabaseReceive copy of delivery note from Phillips

Receive copy of POD and copy of reconsiled data

In database and generates reports

POD

POD

ICT and Supply Chain Management

General situation

1. Big geographical countries2. Good power and IT infrastructure in capital, poor infrastructure

in the field3. 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 everywhere5. General good access to basic internet everywhere using 3 G6. General access to fairly strong IT people in the main city7. No access to IT competence in rural areas8. 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 allreadyactive 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 internet.

Example MSD Tanzania, Orion, Epicor

Supplier Centralwarehouse

SDPDHL freight freight

FULLERPSystem

Project:1 – Failed Navision project2 – Successfull ORION ERP implementation3 – Nine years later new Epicor implementation

Example Kenya Pharma

DHLSystemsVehicle trackingPOD tracking

Qty incomingQty availableQty delivered to SDP

Order QTYOn stock at SDP

SupplierIndia

Phillipswarehouse

SDPDHL freight DHL freight

Phillips SolomonQty Incoming Qty availableQty delivered to SDPPOD

Kenya Pharma databaseQty Incoming Qty availableQty delivered to SDPPODOrder QTYOn stock at SDPPatients at SDP

POD

Qty incomingQty availableQty delivered to SDPPOD

On stock at SDPPatients at SDP

SDP order

Example Haiti, MACS

Supplier Centralwarehouse

SDPfreight freight

SCMSERPSystem(ORION)

WarehousingSystemMACS

Spreadsheets

Project:1 – Start out of scratch – purely on spreadsheets2 – Implementation of warehousing system without analysis phase3 – Now work on longer term solution

Example Cote d’Ivior, PSP

Supplier Centralwarehouse

SDPfreight freight

SCMSERPSystem(ORION)

WarehousingSystemMACS

Accountingsystem

Sage ERP solution

REMED Old procurement

RICI governmentaccounting

Project:1 – Original made Remed2 – Original made Accounting3 – Implementation of gov accounting4 - Implementation of Sage5 – Implementation of MACS

Example SMS reportingMalaria programs, Uganda and Vietnam

Supplier Centralwarehouse

SDPfreight freight

SMS databaseReporting stock levelHMIS informationCommunicating treatement info

Project:Two different systems exist.- A free system used in Uganda under the Malaria program- A commercial solution used in Vietnam

DHL exampleNetwork 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

TowerTower

• Vehicle utilization & routing

managed by DHL SC.

• Costed on LTL-FTL basis

• Fully GPS track & trace

enabled

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

• Lack of recognition of the need of support

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• Who is going to fund implementations