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The 5th Global Health Supply Chain Summit
Private Sector Supply Chain Performance
Measurement & Benchmarking
Lara Haigh
[SPEAKERS NAMES]
November
14 -16, 2012[DATE]
Kigali, Rwanda
Agenda
• Supply Chain Performance Measurement &
Benchmarking in the Private Sector
– Use of Performance Measurement & Benchmarking
– Supply Chain Costs as %
– Benchmarking Report
• At RTT
– RTT Drivers & Metric examples
– Implementation of measurement system
– Benefits & Ongoing Challenges
• Case Study
– Contact Center Service Levels
– Inventory Accuracy
– Impact on Sales
• Conclusion
Supply chain Performance Measurement &
Benchmarking in PVT Sector
• Performance measurement is the process whereby an
assessment of an act or performance is measured by
some means, whether this is by a measurement of time,
value or quantity.
• Constantly reviewing to identify where improvements can
be made or deficiencies eliminated
• Benchmarking often accompanies performance
measurement and can involve 3 types
– Internal
– External
– Competitive
Use of Supply Chain Performance
Measurement & Benchmarking
• Performance to standard measures such as on-time
delivery, fill rate, lead times
• Supply chain costs and cost saving initiatives
• Enhance working relationship between vendor and
customers
• Performance metrics enables executives to perform gap
analyses and identify areas needing improvement:
–
–
–
–
Delivery performance metrics
Cycle time metrics
Inventory to cash management metrics
Supply chain costs metrics
Supply Chain Costs as % of Sales for
Pharma and OTC Distributors
Benchmarking Report
RTT drivers for implementing
measurement system
• Client changing expectations
• Customer surveys
• RTT Best of Breed credo
• Economic pressures
RTT metric examples
S
E
R
V
I
C
E
KPI
Target
Order Error Rate
0.80%
Complaint Handling Cycle Time
98.00%
DIFOT (Delivered in Full on Time)
99.00%
Inventory Accuracy
99.90%
KPI
Order Error
Rate
Complaint
Handling Cycle
Time
Definition - What We Measure
Calculation
No of Orders compared with call
centre deviations as a percentage of
original order quantity
Lead time from receipt of complaint,
No of Complaints handled withing
acknowledgement of receipt (Start of investigation) agreed lead time as a % of total
and communication of resolution
complaints
Number of orders manually captured compared to
errors due to capturing recorded on CRM or POD
DIFOT
(Delivered in
Full on Time)
Orders invoice delivered in full, without deviations POD's as a percentage of original
POD returned and signed for.
order quantity
Inventory
Accuracy
Accuracy of inventory quantities in RTT System
(SAP) vs. physical inventory in warehouse
Reporting Frequency
Responsibility
Weekly - RTT Management
Monthly - Client Management
Call Centre
Management
Weekly - RTT Management
Monthly - Client Management
Call Centre
Management
Weekly - RTT Management
Monthly - Client Management
Operations
Warehouse and
Transport
Management
Cumulative number of units adjusted
Monthly by 10th day of
in the system as a % of total number
following Month.
of units in inventory
Inventory
Management Team
Implementation of measurement system
• IMS data
• Principle requirements
• Customer Satisfaction
Benefits of Performance Measurement &
Benchmarking for RTT
• Performance Measurement & Benchmarking has
accelerated change and improvements, whether in
processes or service implementation
• Implementation of benchmarked standards has reduced
costs by improving overall efficiencies
• Led to new Client partnerships
• Cost versus Service trade off comparisons within market –
confirming correct strategy in place
• Refinement of internal RTT procedures
Ongoing challenges for RTT
• Apple to Apple comparison mistakes
• International standards – compared to country standards
• Finding benchmarking partners willing to participate in
benchmarking studies
• Private sector focus – reduce costs, increase profits,
enhance customer satisfaction
Case Study - Contact Center Service
Levels
Maintaining a firm handle on our
Contact Center metrics is not only
crucial to the success of our company,
but it’s also critical to ensuring that the
clients and customers we serve receive
the service they need as quickly as
possible.
E
R
R
O
R
S
S
E
R
V
I
C
E
•
•
Low Abandoned Calls
(Often added to Service
Level: Abandoned Calls can
be defined as the
percentage of callers who
elect to hang up, or
abandon, waiting in the
queue and before an agent
answers the call)
Few Calls not answered
within 10 Sec
Case Study - Inventory Accuracy
Bar code scanning, or RF scanning, has
has become an integral part of our
warehouse. The Benefits:
• Inventory Accuracy
• Despatch Accuracy
• Reduction in Deviations
Negative Impact:
• Cost
• Speed
Target Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12
Jun-12
Jul-12
Aug-12
Sep-12
Inventory
99.9% 99.95% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 100.00% 100.00% 100.00% 100.00%
Accuracy
Deviations and
0
0
0
0
0
1
0
0
0
0
0
0
0
0
Investigations
Client Case Study – Impact on Sales
• Access to larger delivery footprint
• Client can focus on core business
• Customer satisfaction due to better service delivery
• Client own has no measurement metrics other than sales,
changed when entered a service focus metric
environment
Conclusion
• Measurements related to business management
• Route cause diagnoses
• Specific and sensitive
• Analysis vs. Action