5 Ways to better Government Supply Chain Technology.

Automated information systems are now widely used to manage the data that flows throughout a supply chain, from procuring a commodity, to manufacturing it, and, finally, to distributing it to a consumer. For example, modern retailers like Amazon can track a product from the point of manufacture to the customer’s door.

However, in the developing world, there are a variety of pressures and limitations that affect the adoption and implementation of a more efficient supply chain information solution. When governments do get supply chain management right, the impact on public services are tremendous.

They can optimize value chains by providing decision-makers with accurate and timely information about the cost of commodities managed in the system. Most importantly, they can allow for crucial visibility into the number of citizens they reach with needed supplies.

Still, from governance to sustainability and beyond, there are a number of hurdles to overcome before governments in developing countries can truly use information systems and supply chain data for decision-making.

Fortunately, by addressing the current gaps and following the best practices below, we can ensure information systems are effective not only in developed countries but across the globe.

Five Steps to Better Government Supply Chain Technology

The five elements below are essential to addressing information systems implementation challenges in developing countries. By incorporating these elements, donors, implementers, and local governments can more successfully implement information systems to increase data visibility and — in so doing — optimize supply chains, reduce costs, and, ultimately, save lives.

1. Develop a Supply Chain Technology Business Case.

Most successful system implementations are guided by well-developed business cases. Obvious as this may seem, many public system implementations in developing countries skip this important step. Implementers tend to adopt prescriptive solutions on the premise that they have worked in a similar setting, without conducting a landscape analysis and addressing the individual country’s needs.

For example, the business case should include:

  • A clear vision of the country’s need; indicating how the solution aligns to the overall health service delivery vision, like supporting the attainment of Universal Health Coverage.
  • Benefits of the system; describing how the solution facilitates optimization of the supply chain business processes, decreases inventory operating costs, improves service delivery, and ensures that patients get their medicine on time.
  • Availability of resources; ensuring utilization of existing resources like the country’s eHealth ecosystem.
  • Critical success factors; identifying the drivers for successful implementation including cost reduction, risk management, change control, vendor management, and sustainability.
  • Return on investment; identifying and comparing the cost of investing in the solution with the monetary benefits in terms of supply chain savings. Investment costs include startup, rollout, and ongoing operations; and estimated savings range from lower prices of commodities, reduction of value of expired products, to lower inventory holding costs.
  • Alignment of objectives with the local government; ensuring that the solution aligns with the ministry of health’s overall supply chain objectives, like creating transparency and visibility of data and information throughout all supply chain tiers.

I experienced the importance of these crucial steps firsthand while implementing an electronic logistics management information systems (eLMIS) for health supply chains in Rwanda and Ghana. In both countries, developing the business case was the foundation for success. In particular, ensuring the system was in alignment with the goals of the Ministries of Health was critical before moving forward to determine solutions.

2. Procure the Right Supply Chain Solution.

In an environment saturated with a significant number of solutions — ranging from customized to open source, enterprise resources planning, turn key, and a recent penetration of traditional system disruptors — choosing the right solution has never been so vital.

A solution should not only provide a technology platform but also present opportunities to reengineer current business processes. Users must also develop detailed business needs or “use cases” as a baseline against which the capability of the selected solution can be evaluated.

In the case of Ghana’s eLMIS, we needed a solution that could provide Ministry of Health decision-makers throughout the supply chain with accurate, timely, and appropriate data. Therefore, we developed 35 use cases that encompassed all supply chain business processes, including:

  • Use case 1 – Procure and source items
  • Use case 2 – Warehouse and Inventory Management
  • Use case 3 – Transportation Management
  • Use case 4 – Contracts Management
  • Use case 5 – Visibility and Analytics

These use cases, in turn, formed part of the key evaluation criteria for the selected vendor. Additionally, prospective vendors demonstrated a system proof of concept prior to contract award to ensure the right solution was selected.

3. Ensure Effective Systems Governance.

Effective governance drives successful project implementation because it facilitates collaborative decision-making and establishes the government’s project ownership and stewardship.

However, lack of governance is what plagues system implementation in many developing countries. Positive working relationships with key stakeholders and ownership over the system should be established before charting a critical path to successful system implementation.

In Ghana, governance was an issue early on because of internal disagreement over who should “own” the supply chain information system. Group A included the policy-making division who felt that the implementation and management of the solution should be driven by policy and regulatory controls.  Group B included the stores and supplies operational division who wanted outright ownership because the system was in their mandate.

To address this, we conducted a detailed stakeholder analysis and established an implementation committee comprising all key stakeholders who worked together to develop the governance structure. This led to the establishment of the project charter and resulted in effective project governance.

4. Determine the Right Implementation Approach.

Whether a waterfall, agile, or iterative approach, rolling out any system demands choosing the right implementation approach at the outset. The approach you choose is based on three factors:

  •  The solution you procure will dictate how you implement.

For example, implementers of an open-source solution like OpenLMIS might choose an open-source development methodology characterized by increased intra-team collaboration, continuous integration and testing, and greater end-user involvement.

However, implementers of an enterprise resource planning system might choose an agile prototyping approach because it helps the team review a broader set of configured functionalities and offers users an opportunity to provide inputs. In Rwanda, an agile approach made it easier to configure the LMIS and build a solution that addressed end-user needs while remaining within the limit of project timelines.

  • The timeframe you’re under will dictate your implementation.

For example, if timelines are short, you may implement incrementally and focus on achieving quick wins to establish quick buy in and leverage that as a foundation for the preceding phases.  If timelines are long,  you may decide to adopt a phased approach for early benefits realization, but you must consider constraints like integration between new system and the legacy system during the interim period.

  • Existing resources (infrastructure, people, technology) in a country will determine how you implement the project solution.

For example, if the country has an established eHealth architecture, your approach will be constrained by existing protocols. You will need to ensure that your solution is interoperable with the existing system. Conducting a landscape analysis at the outset will help inform which approach you choose, and then it’s important you adhere to it throughout implementation.

5. Ensure Solution Usability and Sustainability.

From my experience in Rwanda, Ghana, Nigeria, and South Africa, sustainability is the most challenging element of implementation and the most often ignored.

During project initiation, stakeholders often don’t see the value in discussing post-implementation sustainability. The concept is regarded as abstract, and most think there will always be a development partner willing to take on the responsibility after current funding expires. This is misguided and negatively impacts project sustainability.

One way to ensure sustainability is to facilitate system usability through performance-based incentives, identification of user-specific benefits, effective change management, and establishment of a culture of data use.  To define system impacts, you can show stakeholders the tangible benefits they will get out the solution. This can be done through a pre-implementation assessment to benchmark post-implementation performance.

In the case of Rwanda, a pre-implementation assessment indicated the eLMIS would reduce inventory operations costs by more than 50 percent and reduce cycle time — the time it takes from procurement to distribution of a commodity — from four days to 45 minutes! Such numbers help us make a convincing, quantifiable case for how information technology can transform supply chain operations in the developing world.

Author avatar
Philip Lule
Chief Executive Officer, S4D Consulting LLC