Aung Kyaw Moe / Task 8 - Humanitarian Aid and Supply Chain

Memo
To: From: Date: RE:

Francois Damba Aung Kyaw Moe

28 May 2013

TASK 8 HUMANITARIAN AID SUPPLY CHAIN

Dear Francois, I found that Task 8 is a sequel to Task 7 I have done. For Task 8, we need to go to a level lower, a concrete one for the actual implementation of improving Supply Chain in SCILaid in Betaland. The overall frame of my answer is same as the Answer for Task 7, starting with Supply Planning and ending with the End-use monitoring. But I manage to present my answer in two related parts in each of the sections: (1) Actions to be taken for improvement and (2) Monitoring the effects/results of the actions taken. IMPLEMENTING IMPROVEMENT OF PERFORMANCE IN SUPPLY CHAIN OF SCILaid 1. Planning Supply Requirements Without having a good supply plan ahead of our programmatic activities, we will lost out track in supply chain management. Therefore, a correct understanding of supply planning and based on the feedback information of past years, we must start out supply process with a sound supply planning. Actions to be taken for Improvement As I have told you in task-7, the major problems in Supply planning are the Limited use of planning process to define objectives, activities and needed inputs and Weak identification of supply needs in the programme. Limited involvement of staff responsible for supplies in programme planning is another factor of risk in supply planning. Lack of awareness of supply procedures, estimated costs, and procurement lead times to realistically budget and specify supply requirements are also hindering the smooth supply planning.

In this regards, the following actions should be taken for improvement of planning the Supply requirement ahead. 1. Encourage the Programme Staff in SCILaid to consider the uses and relevancy of Supply Planning 2. Provide necessary information of the working process and procedure of a Supply Chain and reverting the required technical knowledge to the Programme Staff 3. Share up-to-date knowledge and information of Supply Chains and markets with the Programme Staff 4. Define supply input requirements in adequate time to allow for procurement and delivery before implementation of the activity 5. Communicate with Programme staff to effectively interact during work planning with the awareness of procurement procedures, lead times, need for clear specifications and clear understanding of supply input requirements Monitoring the Effects/Results of the Actions Taken The key document in the part of planning supply requirements is the Annual Supply Plan in which all details of supply type and categories of goods, estimated unit prices and mode of transportation, estimated lead-time and targeted arrival date to final destination should be mentioned. This Supply Plan should reflect need for supply assistance within the context of overall activity planning for both programme and operations activities. In this regards, the following steps to monitor the effects/result of the actions taken for improvement of planning the Supply requirement. 1. Check the Annual Supply Plan whether it is reflecting the actual needs of the implementing programme 2. Utilize the past records and documents of programme and find concordances and discordances 3. Revise the Supply Plan quarterly and Bi-yearly and monitor the discrepancies between planning and actual procurement 2. Defining Supply Specifications It is said that managing a Supply Chain involve the flow of information and the flow of goods. In this case, only correct and well-defined information can bring the appropriate supplies in a suitable lead-time. Therefore, as a proverb says, Look before leap, and Think before Speak, think very thoroughly and carefully Actions to be taken for Improvement of Supply Specification Providing detail specifications of required supplies can help a smooth flow in the supply chain. The flow of information concerning the detail supply specifications is also a crucial aspect of any supply chain. In this regards, the following actions should be taken for improvement of the Supply Specification.

1. Check all programme requisitions whether they include adequate specifications and realistic target delivery dates. The below-mentioned aspects should be properly considered: WHAT kind of goods/products we need to supply for beneficiaries? WHAT is the number of total available beneficiaries/end-users? HOW MANY (quantity) of supplies needed for supply of goods? WHEN these goods must be supplied? WHERE these goods must be supplied? HOW these goods should be supplied? (means of transportation) 2. Use standard specifications for frequently purchased supplies based on knowledge of the end-users' standards, needs, preferences and maintenance capacities. 3. Utilize reference materials (Suppliers Catalogues or Websites) for developing specifications and estimating costs. 4. Assure Programme Staff to be aware of the procurement lead-times, importance of clarity of specifications and authorization limits for local procurement and use this information during supplies planning. 5. Co-ordinate with Programme staff effectively on timely and accurate specification development. 6. Select appropriate sources of supplies, mode of shipment and apply adequate controls to approve high-price source and shipment options. 7. Monitor the exact location of supplies in the chain, the status of movement and inventory level kept in, and the amount of supplies to move in transit 8. Estimate the time of departure and arrival of supplies and important instructions in the process of receiving and clearance of supplies (i.e., dangerous/hazardous cargo, highly perishable foods and vaccines which must be kept under certain range of temperature) 9. Manage to move the volume of goods to arrive and making calculations of resources are needed to move and unload them must be properly checked. 10. Keep eyes wide open to any problems there are which are affecting the flow of goods down the supply chain. Monitoring the Effects/Results of the Actions Taken for Supply Specification The following steps are needed to implement to monitor the effects/result of the actions taken for improvement of supply specification. 1. Check any point of Weak technical supply knowledge of programme/office staff & partners 2. Monitor programme by supply staff in defining specifications 3. Find out the limited availability of proper specifications for commonly used supplies 4. Examine the certain limited awareness or use of existing sources of supply information 5. Observe the weak awareness of need for significant specification detail for international procurement, particularly for printing 6. Provide awareness of the many authorization limits that affect an office

7. Check weakness in monitoring of requests for local/regional procurement authorization. 8. 3. Selecting and Contracting Suppliers After getting supply requirements fully specified, what follow is to identify the potential suppliers/contractors who are capable of supplying goods in accordance with the supply planning and specifications. In order to ensure the selection of the most appropriate supplier in terms of quality, cost, and delivery time resulting in the issue and recording of purchase orders, the following aspect must be kept in mind, viz.,. Right Price, Right Quality, Right Quantity, Right Packaging and Right Delivery Time. Actions to be taken for Improvement 1. Assess potential suppliers and maintain/use the list of qualified suppliers in the issue of requests for bids and quotations. 2. Evaluate the performance of suppliers in the fulfillment of Purchase Orders and use the findings to modify the list of qualified suppliers. 3. Use well-prepared bid/quotation request documents (appropriate specifications, delivery dates, and contract terms) to invite qualified suppliers to competitively bid and appropriately assess the suppliers' proposals before issuing a PO. 4. Establish procedures for submission and safeguarding bid documents, bid opening, evaluating and selecting winning bidders. 5. Establish standard terms and conditions to be included in local POs and ensure that these terms and conditions are verified during the drafting, authorization and signature process. Monitoring the Effects/Results of the Actions Taken Make a thorough and practical market research to identify potential local suppliers and benchmark their performances Establish a strong and professional evaluation practices to assess actual performance of the selected suppliers Check the possible Weak and Erroneous specifications & requests for bids reduces quality of returned bids Ensure segregation of duties for receipt of bids and awarding of contracts Follow up the inappropriate contractual terms & conditions in purchase orders and always monitor to correct them

4. Pre-Delivery Quality Control, Shipment Monitoring, and Receipt of Goods Pre-Delivery Inspection is a very tricky part in the procurement process, since some suppliers try to cheat at that time. They might take advantages of the weak specifications on the order and the replace the low quality items for the higher one they presented as their samples. Therefore we must strengthen our inspection procedures in order to ensure that delivered supplies meet the specified quantity, quality, packing, delivery date and location terms and the final cost as per calculations done by SCILaid.

Actions to be taken for Improvement The following points of action should be done to improve the process of pre-delivery inspection: 1. Ensure that pre-delivery inspections of locally-produced supplies are conducted to meet the quality specifications before completing the order. 2. Maintain regular contact with contracted suppliers, monitor their progress to meet specified TADs and provide timely feedback to relevant staff of any deviations in expected delivery dates 3. Verify supply deliveries and record (by authorized staff/partners) against specifications, quantities, packing & delivery instructions etc, and assess the fulfillment of the supplier's obligations. Accurately report all deviations. Monitoring the Effects/Results of the Actions Taken Check the supply and programme staff have appropriate level of knowledge of pre-delivery inspection procedures. Examine are there any vague specifications, packing and delivery instructions in POs. Make sure that TADs requested by SCILaid & accepted by suppliers are realistic and practical. Observe whether delivery of supplies at final destination are in conformity with the spec mentioned on PO. Scrutinize that are there any inadequate planning leading to rushed/weak verification of quality & quantity. Observe and Correct Weak enforcement of contract terms and penalty clauses.

5. Shipment Monitoring and Port Clearance Process SCILaid supplies are mainly from the local market but some of items it needs to import from overseas markets. In this regard, managing shipment and customs clearing process become an important part in the supply chain. Actions to be taken for Improvement The following points of action should be done to improve the process of receiving goods and custom clearing process: Check with the respective suppliers from overseas market about the tentative delivery date and ETA Follow up constantly whereabouts of the shipped cargo by using some on-line trace and tracking systems Check very thoroughly when receiving shipping documents for bothe sea and air freights and Contact with the supplier and transport agencies to correct/amend the mistake in time Apply to the respective government authorities to obtain the necessary Tax exemption certificates and other FDA related authorizations

Take records if there are some discrepancies or damages of the cargo in clearance process and Contact to the Insurance company to claim for the damages if there is any

Monitoring the Effects/Results of the Actions Taken The following points are to be monitored to improve the process of receiving goods and custom clearing process: Analyze the delay of cargo and discrepancies between TAD on purchase orders and actual arrival of the cargo Explore the major cause of delay and find ways to correct Scrutinize the lead time in different mode of transportation, costs of transportation and major barriers in government authorization processes

6. Receipt & Warehousing Process Actions to be taken for Improvement of Warehouse Management The following points of action should be done to improve the process of receiving goods and improvement of warehouse management: 1. Check that sufficient storage space is available and the layout of storage facilities is suitable to meet the operational requirements of the organization. 2. Inspect that goods are effectively stored in order to provide an efficient service to customers and internal users. 3. Look over that materials, goods and products are adequately and securely stored in order to facilitate their prompt identification and dispatch. 4. Ensure that the optimum warehouse locations are utilised to maximise the efficiency of distribution to customers, etc. 5. Make sure that all goods are adequately protected from damage, deterioration and loss, in order that they remain in optimum condition for use. 6. Clarify that all stock movements are valid, authorised and properly executed. 7. Check that goods are stored safely. 8. Examine that staff are appropriately trained in the handling of goods in order to avoid damage to the goods and injury to staff. 9. Provide adequate and serviceable materials handling devices as an aid to efficiency and cost effectiveness. 10. Take care of hazardous items which must be safely stored, is there as any. 11. Monitor that all relevant regulations and legislation are complied with. 12. Keep the FIFO system that stocks are used in rotation. 13. Comply that adequate and relevant insurance cover is provided for both the stocks and storage facilities. Monitoring the Effects/Results of the Actions Taken In order to monitor a good warehousing system, the following points are mainly scrutinized and quickly respond: Is space allocated in order to cope with peak loads rather than normal or minimum requirements?

Have management of SCILaid provided some spare storage capacity as a contingency to cater for expansion, etc. (and how was this accurately determined)? Is space usage monitored and action taken to avoid wasted or excess space? Are food and drug items appropriately segregated? How does management avoid excess storage space and aim to contain the costs of providing storage facilities? Are fast moving items accurately identified and conveniently located for efficient handling? Are items adequately trailed to all the relevant storage locations? Are stocks used in rotation (as appropriate) in order to avoid the build up of older or outdated items? (How to dispose properly is an issue) Is there sufficient space between storage locations to enable effective and safe access, the use of handling equipment, and the safe evacuation of the building in case of emergency? How can management be assured that production and sales requirements are promptly and accurately advised to the warehouse? Have specific responsibilities for the warehouse operation been allocated (and does this include maintaining an awareness of current materials handling trends and relevant regulations)? How can SCILaid management be assured that packaging, storage and handling techniques are adequate to protect the goods from damage and deterioration? Are damaged items promptly identified and appropriate action taken (and how is this evidenced)? Are the appropriate environmental conditions (i.e. air conditioning, humidity, and temperature) provided and maintained at the required level? Are storage areas well lit for safely and security purposes? What physical and other security measures are in place to protect goods and personnel, and are they regularly tested for effectiveness? Are adequate and operational intruder alarms systems installed and regularly tested? Are adequate and operational fire prevention, protection, and containment facilities provided, and are they regularly tested and maintained? Would the fire containment systems (i.e.. sprinklers, foam inlets, etc.) cause significant damage to stocks? What measures prevent staff pilferage of stock items? Are adequate number of staff provided to meet the operational demands of the organisation, and how does management determine and maintain the staffing requirements? Are SCILaid staff aware of the required and safe handling techniques and how is this confirmed? Have management in SCILaid provided adequate and suitable protective equipment and clothing for staff, and how is its use confirmed?

Are sufficient and adequate facilities provided for moving heavy items, and are SCILaid staff aware of the correct use of such facilities? Are delicate items adequately protected during storage and when being moved? How is the accuracy of data input from other systems (i.e. Stock control or Sales order processing) confirmed?

7. Transportation and In-country Distribution Process

The physical movement of goods from suppliers or donors to beneficiaries comes after procurement is done. The transport component of the supply chain is the major part in providing this movement of goods. In terms of transporting goods along the chain, different actors may be involved in the whole process, including commercial suppliers, UN organisations and NGOs. They may all take responsibility for ensuring the goods are transported along part of the physical supply chain. Actions to be taken for Improvement of Transportation and In-country Distribution Process In order for improvement of In-country distribution done by SCILaid, the following point of necessary action must be properly carried out: Consider the urgency that goods are required. Decide the type of goods to be transported. Measure the volume of goods to be transported. Investigate the availability of different transport routes. Assess the place to which the goods need to be transported. Calculate the cost of transportation. Compare the availability of different types of transport. Beware of the terrain through which the goods need to be transported.

Monitoring the Effects/Results of the Actions Taken

There should be a long list of following point to monitor in case of contracting a local transportation services or using SCILaid own means of transportation.

1. Check the transporters submit Bid and Quotation within the time-frame determined by SCILAID. 2. Encourage the transporters to read all descriptions and requirements before submitting Bid and Quotation. 3. Assure them to read all terms and conditions of the Service Contract before signing it. 4. Check all attached documents and lists of Contract and Ask SCILAID to provide if you could not find it. 5. Order them to issue out the items to be transported from the respective warehouses all-at-once and Do Not make multiple issuing/transactions. 6. Check thoroughly types, measurement, particulars and quantity of the items when issuing them from the respective Warehouses.

7. Instruct them to inform SCILAIDs Supply Section immediately if find some cases of shortage or excess of quantity and wrong type/category of items. 8. Assure them to follow the detail instructions of SCILAID for Packing and Marking mentioned in Bid/Quotation very carefully. 9. Instruct them to use your own Staff who is well trained and legally belong to your Company for transportation of SCILAID items. 10. Instruct your transportation staff/team to go along with the cargo and Do Not delegate truck owners/ brokers to do the transportation on behalf of your Company. 11. Prohibit sub-contract the Bid/Quotation to the other transport companies. 12. Charge them to inform SCILAID Supply section immediately whenever a road blockage caused by bad weather or land sliding or flooding or fighting with the insurgents. 13. Let them Inform/Report SCILAID Supply section the detail progress of transportation weekly. 14. Assure them to transport the items within the allotted time-frame and Do Not cheating the receiving date on the Receipts/ Delivery Notes. 15. Ask to avoid sending illegal cargo along with the SCILAID cargo. 16. Ask them Not to send dangerous/bio-hazardous cargo along with the SCILAID cargo whish are mostly edible foods. 17. Assure them to check thoroughly with the Recipients of the types, measurement, particulars and quantity of the items when they deliver. 18. Request the recipients to fill the necessary data on the Government Receipts and to sign with official seals and received date. 19. Ask them to submit properly signed Receipts/Delivery Notes only to SCILAID. 20. Inform SCILAID Supply and Logistics Section any case of mistaken transportation (type of item or destination) immediately and resolve the problem as soon as possible. 8. Assess the Effectiveness of Supply Assistance The Supply Chain in SCILaid is mostly complete when the goods and supplies required have been successfully distributed to the targeted beneficiaries, but being jointly responsible with the programme section for the usability of supplies, it is mandatory to assess the effectiveness and appropriateness of supply assistance after distribution. Actions to be taken for Improvement in Assessment of the Effectiveness of Supply Assistance In order for improvement of Assess the Effectiveness of Supply Assistance by SCILaid, the following point of necessary action must be properly carried out: 1. Review and evaluate the appropriateness and effectiveness of the supply component of the programme-supported activities. 2. Review individual project activity to include a consideration of the appropriateness and effectiveness of the supply assistance provided for the activity. Ensure supply staffs are informed of the findings and use the information in future supply planning and procurement actions.

3. Assure SCILaid Staff to maintain contact with programme-supported activities through field visits, and regularly assess the appropriateness and effectiveness of programme-provided supplies as a component of their field visits. The results of these assessments can correct future programme planning and supply procurement actions. 4. Monitor in this assessment of supplies distributed in terms of following points: Quality, Effectiveness and Appropriateness of supplies Timeliness of Delivery Whether and How the supplies are being used Accuracy of Installation Durability and Suitability of supplies Impact of a product on the users Whether an input should continue, be amended or stopped Logistics Chain (breaks, lead time etc.) 5. Utilize the following tools in monitoring and evaluation of supplies distribution Receipt documents of the end-users Tabulating available data Periodic Progress/monitoring reports Field Trip Reports (separate field for supply monitoring) Warehouse visits at central, provincial, state and/or township Joint Monitoring/Evaluation visits (programme/supply) Observing installation and condition during field visits Questioning beneficiaries through interview Supplies/equipment evaluation form Monitoring the Effects/Results of the Actions Taken The following points are to be monitored for the effectiveness of the actions taken for the better performance of assessing the effectiveness of supply assistance: Check that feedback information get from previous programme cycle help to improve the design of a project or programme in order to improve future procurement Scrutinize the relevance of supplies to users and beneficiaries Investigate the correct provision of Recommended actions for each case to be corrected Check to obtain Data for planning supply component of Country Programme Monitor limited attention to assessing the role of supplies during programme reviews Find out weakness of assessment of the overall effectiveness of supply supported activities Look into the limited visits by SCILAID staff to programme-supported field locations Find out the weak assessment of the quality & use of supplies during field visits Best Regards,

Aung Kyaw Moe Logistics Officer Sub-Office (SCILaid Betaland) .