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[DATE][SPEAKERS NAMES]

The 5th Global Health Supply Chain Summit

November 14 -16, 2012Kigali, Rwanda

 

Measuring Supply Chain MaturityDiane Reynolds

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

Establishing capability & performance attributes of supply chain maturity enables planning & performance management

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Capability:•Benchmark to best practiceP

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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

Step 1: Environmental Study

Region

District

SDP

Functions

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)

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

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

Step 5: Evidence-based decision-making

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Sequence Interviews

Step 6: Intervention based on recommendations

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Key Improvement Areas and Financial Impact (targeted savings)

Step 7: Measuring the ROI

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Key Improvement Areas and Financial Impact (targeted savings)

Back orders

Immediate saving

Long term saving

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