Core Planning

The objective of the Core Planning & Procurement Work stream was to identify root causes of stock outs and increase product availability of critical items through proactive supply chain planning that enables communication and collaboration across the supply chain, from customers all the way up to suppliers. These changes in management practices all have the potential to reduce stock outs and lower inventory costs, generating savings that can be used for further supply chain improvements.

Accomplishments

The Core Planning work stream resulted in new cross-functional meetings and several new processes and tools for forecasting, procurement planning, and managing supplier relationships. Demand data is now collected from the zonal offices on a monthly or quarterly basis instead of projecting based on an annual forecast. The demand data is then used in monthly meetings to adjust the procurement plan. ADP supported procurement initiatives at MSD through development of tools such as supplier scorecard and supplier feedback forum. The application of product segmentation methods and priority routing of the most critical drugs and supplies also enabled efficient management of a large and diverse set of products.

Prior to Phase III, inventory analysts were responsible for tracking stocks. After being exposed to the Coca-Cola model, MSD redesigned their planning teams to include a Demand Planning Manager and a Supply Planning Manager. The Demand Planning Manager now reports to the zone operations and looks at customer demands to come up with projected items that need to be stocked or ordered. This information is then communicated to the Supply Planning Manager who ensures that these items are received from suppliers on time.

Taking Ownership:

The cross-functional meetings have generated a sense of alignment in the teams. MSD is now focused on maintaining this process independently with regular guidance and feedback from the project partners. From learning the basics of keeping a “to-do list” to forecasting stock-out reports, there is an increased level of business understanding within the planning teams. 

With this structure, we are now able to understand over the next twelve months, which items should be out of stock. It's very easy to go to the meeting, and  advise the management of decision making. That next month, or next December this year, this item are going to be out of stock. Although we are not financially not stable, they can see which Item are critical for life saving. They can decide what shall be done.” Demand Planner, MSD

Planners on both sides (Coca-Cola and MSD) have regular interactions with each other and have agreed to take on a longer-term mentoring role. The demand planners are currently exploring implementation of a “progress board” a checklist that will allow MSD to visually track progress and address any issues along the way. 

Key metrics for planning and procurement

  • Stock out levels at Central Warehouse 
  • Forecast Accuracy at Central
  • Forecast Accuracy at Zonal 
  • Expiries at Central 
  • Supplier Lead Times
  • Supplier Feedback
  • On-time full orders from Central to Zone Challenges

Challenges: 

Although the OSP meetings enabled proactive planning and distribution of medicines, they also created additional responsibilities for MSD staff. For the cross-departmental meetings to impact organizational performance, participants must come prepared and take responsibility in following up on action items. With multiple priorities, there was simply not enough time in the day to squeeze out weekly, bimonthly and monthly meetings. When many of the MSD employees were pulled to work on the new inventory system, the ERP project, it became difficult to maintain these meetings. In addition, staff members at MSD continue to lack the technical skills to manage complex tools needed for these processes. 

The forecasting tools and models are only as good as the data that goes into them. Accurate data on consumption and demand is lost in the current ordering process and the filling of items on backorders is not tracked consistently, making data captured by the inventory management software inaccurate. The tracking of KPIs for continued improvement is also impeded by the lack of data infrastructure.




 Background Resources

Click below to view the ADP presentation on Phase II accomplishments in operations and sales and procurement.

Click on image above to enlarge.

 Partners' Perspectives

They have learned how to hold meetings, how to disagree in meetings, what to bring in those meetings, what processes are critical; which ones are not.….They saw that we are not in a perfect environment to execute our ideology. Neither can they wait for a perfect world to execute theirs. So, by bringing them here and showing them how we do it, sitting in on our meetings, and seeing and hearing people disagree and agree, I think gave them the courage to face it; to tackle it.”
Coca Cola Kwanza Official

Click here for transcripts of the audio clips.