1. CLICK TO ADD TITLE The 5th Global Health Supply Chain Summit
November , 2012 Kigali, Rwanda  
CLICK TO ADD TITLE
Setting the stage for supply chain performance management in Kenya’s public sector
Jonathan Pearson
Manager
Deloitte Consulting LLP
[SPEAKERS NAMES]
[DATE]

2. Executive Summary Challenges Approach
Public sector medical supply agency undergoing reform
Strategic vision and metrics misalignment
Limited culture of performance management
Approach
Strategic alignment of metrics to supply chain performance strategy
Sustainable practices to align vision with measurement and performance management action

3. Aligning Supply Chain Metrics to Strategy

4. Three step process to strategically align supply chain metrics
Strategic Alignment Approach 1
Prioritize supply chain performance requirements 3
Identify strategic focus areas for supply chain performance
Review final metrics
Executive Leadership 2
Prioritize supply chain process areas
Identify supply chain metrics
Align metrics with strategic focus areas
Identify gaps and revise metrics
Operations

5. Strategic Alignment Approach
First, prioritize performance requirements to align business strategy with operations
Strategic Alignment Approach 1
Prioritize supply chain performance requirements 3
Identify strategic focus areas for supply chain performance
Review final metrics
Executive Leadership 2
Prioritize supply chain process areas
Identify supply chain metrics
Align metrics with strategic focus areas
Identify gaps and revise metrics
Operations

6. Strategic Alignment Approach
Next, prioritize process areas to effectively address challenges in operations
Strategic Alignment Approach 1
Prioritize supply chain performance requirements 3
Identify strategic focus areas for supply chain performance
Review final metrics
Executive Leadership 2
Prioritize supply chain process areas
Identify supply chain metrics
Align metrics with strategic focus areas
Identify gaps and revise metrics
Operations

7. Strategic Alignment Approach
Then identify focus areas for metrics based on requirements and processes
Strategic Alignment Approach 1
Prioritize supply chain performance requirements 3
Identify strategic focus areas for supply chain performance
Review final metrics
Executive Leadership 2
Prioritize supply chain process areas
Identify supply chain metrics
Align metrics with strategic focus areas
Identify gaps and revise metrics
Operations

8. Performance metrics for supply chain planning and delivery
Responsiveness
Order fulfillment lead time
Truck availability
Customer complaint cycle time
Carrier on-time arrival
Pick to ship cycle time
Dock to stock time
Order turnaround time
Transit time
Reliability
Order fill rate
Forecast accuracy
Facility consumption report timeliness
Distribution Plan adherence
% short-dated inventory
Stock outs per period
Supplier on-time delivery
Compliant order accuracy rate (%)
Order shipping accuracy
On-time delivery
On-time shipment
On-time Proof of Delivery (POD) returns
Cost / Efficiency
COGS as a percent of revenue
Return on assets
Cumulative supply chain lead time
Warehouse Capacity utilization
Months stock cover
Inventory Turns
Space Utilization
Inventory waste and/or damages
Months’ stock cover
Freight payment cycle time
Fixed Asset Turnover Ratio
Agility
Plan cycle time
Distribution planning lead time
Inventory turns
Procurement lead time
Order line fill rate
Order lines picked / per FTE / Labor hour [units / hour]
MUDA: Transport; The movement of product and components between locations, this costs you money but adds no value to the product.
Inventory; Inventory is a buffer used to hide all of the problems in your system, it insulates you from supplier failure, poor scheduling, breakdowns, poor quality and many other problems. In addition inventory requires space, transporting and ties up your cash.
Motion; Any movement within the workspace that cannot be done more ergonomically or efficiently, such as picking heavy objects up from floor level to a bench or other working area.
Waiting; Exactly that, waiting for machines, people, information, product and so on.
Overproduction; Creating more that the customer needs or sooner that the customer needs it thus leading to inventory.
Over processing; Doing more to the product than is required by the customer such as over specifying tolerances causing slower more expensive processes to be utilized.
Defects or Rejects;

9. Linking Performance to Strategic Mission
MISSION: To provide reliable, effective and sustainable medical logistics service for health care delivery
Deliver the right quantity, at the right quality, at the right time, at the right location and at the right cost
Order Fill rate
Plan Adherence
Cost Balance
Supply Chain Planning
Procurement
Delivery costs: Efficient routes
Pick to route
Stock the right quantities for required customer service
Months Stock cover
Customer Service
Warehouse
Distribution
Seek improvements in planning processes to support Order Fill Rate
Review supporting metrics for each department to enhance plan adherence

10. Sustaining Performance Management Practices

11. First, define Performance Management operationalization
Planning
Performance Management
Strategic and operational planning
Design dimensions to measure progress towards organizational objectives
Set KPI targets based on past performance and expected change
Planning
Monitoring
Evaluating
Reporting
Learning
Monitoring
Collect, compile, and manage routine data
Evaluating
Analyze data to assess the effectiveness of the organization in the achievement of goals
Provide regular feedback to departments
Reporting
Provide useful information to stakeholders in a systematic and timely manner
Learning
Systematically introduce changes in processes based on results evaluations
Utilize M&E results in Planning process

12. Second, link Performance Management concepts to implementation pillars
Planning
Monitoring & Evaluating
Reporting
Learning
Human Resources & Accountability
Set performance objectives
JDs to reflect PM expectations
Make PM requirements clear to staff & data producers
Provide regular feedback on results
Review and refine objectives
Capacity & Institutional Knowledge
Develop PM Plan with capacity resource needs and Action Plan
Define data management procedures & strengthen M&E capacity
Define routine reporting reqts
Document decision-making actions
Implementation Plan Pillars
Management Information Systems
Prepare MIS to meet data capture requirements
Improve MIS capacity to track data
Standardize reporting through MIS
Review and refine MIS to meet new PM requirements
Advocacy and Change
Publish targets and expectations transparently
Improve MIS capacity to track data
Utilize M&E reports for organizational advocacy
Implement and monitor change based on evidence

13. Then, develop and implement the work plan and measure expected outcomes
Work Plan Categories
Work Plan Activities
Desired Outcomes
Human Resources & Accountability
Define roles and alter job descriptions to reflect PM responsibilities
Create M&E Unit and hire staff
Clear roles and expectations for staff with PM activities institutionalized
Operationalized M&E Unit
Capacity & Institutional Knowledge
Develop PM Plan and implementation action plan
Create “Metrics Dictionary”
Document what works
Increased institutional knowledge and performance management capacity
Uniform understanding of PM and common course of action
Management Information Systems
Identify ERP PM functionality gaps
Align MIS (e.g. ERP/WMS) with PM needs
Reduced burden on staff & more focus on operations
Compliant levels of data quality & timeliness
Advocacy and Learning
Define internal & external information products, distribute, and learn
Deliver Actionable Information Use workshop to leadership and operationalize information use
Increased transparency and results- driven advocacy
Stronger culture of information use and action for change.

15. About Deloitte
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