Supply Chains in Perilous Places

Bryan C. Baylis CSCP

Nepal

$141

Corporate Social Responsibility at Merck Richard T. Clark Fellowship

“A global program designed to leverage the skills and talents of Merck employees to help build and support the efforts of humanitarian organizations to address the health

needs of the underserved.”

The Objective • Improve the quality of available Healthcare in Western

Nepal • Install durable supply chains for life saving medicines

and surgical supplies within the Bayalpata Hospital

The Team

The Three Amigos - Philip, Bryan and Nardi

Bayalpata Hospital

• Founded in 2005

• Public / Private

Partnership

• 100% Free Healthcare

• Local Advocate for the

Community:

• Domestic Violence

• Maternal Health

• We left the comforts of our corporate environment…

The Challenges

• For the comforts of Nepal…

The Challenges

Philadelphia, Pa Doha, Qatar 14hrs

Doha, Qatar Kathmandu, Nepal 5hrs

Kathmandu Dhangadhi 1.5hrs

Dhangadhi Achham 11hrs via Jeep

The Challenges - Location

The Challenges - Water

The Challenges - Electricity

The Challenges - Food

The Challenges - Hospital Priorities •Priorities focused on short term treatment of patients

•Lower priority for long term procurement, supply chain and

general management of the hospital

Bayalpata - Filling a Basic Human Need • Maternal and Child Health

• Communicable Disease Treatment

• Emergency for Trauma

• Active Community Health Program

• 300 Patients Per Day

External Supply Chain - Initial State • Few personnel understood supply chain for pharmaceutical products

(who, where, how much, at what price)

• Lack of clarity on competitiveness of pharma pricing

• Doubts about reputation and quality of pharma companies providing medicine

• No real procurement strategy

• Benchmarked supply and procurement practices at peer hospitals throughout Nepal

• Met with government representatives to document public supply flows (HIV and TB Medications)

• Learned Nepali private supply systems and documented current private supply chain

– Manufacturer super stockist stockist hospital

• Detailed out a comprehensive procurement strategy, which included controls to safeguard quality and cost

External Supply Chain – Our Accomplishments

Nepali Drug Manufacturers - Due Diligence

• Identified top tier Nepali manufacturers and inspected their facilities

Identified Drivers of Medicine Spend

Procurement Strategy Execution

Pareto

Quotes

Decision

Internal Supply Chain

Medical and Pharmaceutical Stores Incoming goods

Emergency Outpatient Inpatient Operating Theater

Health posts Police,

external

Distribution to customers

Internal Supply Chain

1. End to End Flow

2. Physical Upgrades

3. Inventory IT System

• Selection

• Implementation

4. Standard Operating Procedures

Major Areas of Focus:

Internal Supply Chain – Initial State

• Multiple Dysfunction • Supplies dropped off by public buss, unprotected from elements

Internal Supply Chain – Our Accomplishments

• Physical Upgrades of Store Room, In-patient Department, Emergency Department, Out-patient Department and Operating Area

Old name New name

Mersilk 2 piece per unit Suture, Silk, (2-0), no needle, cutting (NW 5036)

Promethagin hcl 25 mg injection Promethazine hcl 12.5 mg/ml injection, 2 ml vial

• Provided item numbers for ordering • Provided standard names for medicines and medical consumables

Formulary Development • Outdated list with many misspellings and undecipherable names • Duplicate items • No order numbers

• Scope:

– Select appropriate inventory management software for all medical and non-medical consumables utilized within the hospital

• Starting point:

– MS Access dBase (homegrown) was in use, but was not consistently used and therefore out-of-date

– Mapped out requirements

– Identified and evaluated two off-the-shelf software solutions

Inventory Management – IT Solution

Internal Process Flow

Inventory Management Hand-over to Finance Receive PO’s Purchase Goods Deliver Items to

internal Customers

End to End Process Bayalpata Procurement

Hand-over to Finance

T r a i ne d R e so u r c e s

Review and adjust replenishment levels

Check Inventory (Cycle Count)

Adjust Inventory, when needed

Receive Customer Orders

Pick Customer Orders

Administer Inventory Transactions in SiE and

on the Stock Cards

Generate Replenishment

Purchase Orders

Adjust suggested quantities , based on

usage knowledge

Place Purchase Orders

Receive Purchase Orders

Count, and match Receipts with PO

Note when quantities don’t match

Administer Inventory Transactions in SiE and

on the Stock Cards

When Purchase Order is complete, close the

PO, and print the Delivery Sheet

Compile full PO paperwork (Delivery

Sheet, Supplier Packlist, and Invoice)

Sy st e m a nd Da t a Co nt r o l ( St o c k i t E a sy )

Inventory Management - Benefits

To improve control of our Inventory, know what we have in inventory at all times:

• Do we have the essential drugs in house, and where are they?

• Who are the Manufactures and Suppliers?

• Quantities in house, open orders

• Expiry date control

To understand what we use within each department

Provides visibility to open supplier orders

To assist with managing our finances and overall product costs

Sets us up for growth

** Manual Backup Stock Cards **

Training

Criticality of Quality Communication

Standard Processes

• Standard Operating Procedures (SOPs) were introduced to the hospital One-on-one mentoring of hospital staff – Standardize all processes to ensure Bayalpata Hospital is running at

optimal efficiency

– Assists in training new hires

– Cross-functional training

– Log books ensure tasks are being completed on time and by the appropriately trained employee

• Hiring the right employees for the right positions • Ensuring employees are trained correctly and are provided with the

tools to continuously learn • Recognizing the need to reassign employees to more or less

challenging positions depending on their abilities and performance (Critical in such a remote environment)

Management Consulting

Sustaining Change

Success Measured!

• Stockouts reduced from 80 to approximately 3 occurrences per month

How We Accomplished Our Goals

• Built strong relationships based on trust

• One-on-one mentoring of hospital staff

• Cultural sensitivity • Flexibility • Creativity • Sense of humor • Open to new experiences • Prepared to go out of your

comfort zone physically and mentally

• Keeping it Simple

Video

Supply Chains in Perilous Places

Questions?