Technology
Visibility and analytics network (VAN)
In this section you will learn:
- What a VAN is
- The three essential capabilities of a VAN
Introduction
VAN is a concept that provides end-to-end visibility of the entire supply chain. VAN is designed to ensure the availability of the right health commodities when and where they are needed. It provides end-to-end visibility of what happens and how well it happens (closed-loop) across the supply chain network. A VAN is founded on the principles of policy, process, technology and end-to-end visibility. These elements are grouped in a VAN blueprint.
The VAN is based on the control tower practice from the private sector. The private sector leverages the VAN concept to manage complex supply chains and reduce risks associated with shipment delays and cost overruns. By removing the risk of operating "blind" through the use of a control tower the private sector was able to proactively identify, mitigate and address supply chain-related issues. Research by Accenture1 shows that a control tower is a value driver due to its ability to assist with offering higher customer service at a lower cost. In many cases, private sector companies claim that the control tower concept, called VAN in the public health care sector, has produced enough savings in distribution costs to pay for themselves.
The VAN and supply chain management processes
The VAN utilises a team of highly skilled people for delivery, performs complex analytics to enable the right decision-making at the right time to ensure product availability and creates optimised holistic plans for the supply chain and makes proactive corrective action recommendations. In short, the VAN aims to make the supply chain more collaborative, aligned, agile, and demand-driven and can support outsourcing arrangements through full visibility of the supply chain and ensuring alignment with all engaged stakeholders.
VAN encompasses four key supply chain management processes:
- Demand planning
- Supply planning and inventory management
- Distribution and transportation management
- Cold chain management
Demand planning
Demand Planning is a multistep process to create a forecast (future demand) based on consumption patterns and inputs from health care experts/ facility representatives using statistical tools or a demand planning engine.
Supply planning and inventory management
Inventory management is a process to define the right inventory levels at various nodes within a supply chain network to minimise stock out, reduce wastage of material due to expiry and optimise investment in inventory and storage facilities as per the available budget. The process also involves the creation of replenishment order plans and the initiation of stock transfers. The supply planning process secures supplies to meet future projected demand. In case of a supply disruption, the supply planning process will inform all stakeholders and initiate inventory allocation/movement to manage risk.
Distribution and transportation management
Ensures the cost-effective storage and distribution of products between warehouses and health facilities while maintaining product potency. The Transport Planner creates a distribution plan based on replenishment order plans which are then executed by the warehouse. In case of any delayed or short/excess supply, an alert is sent to stakeholders and inventory movement is initiated with the help of inventory planners to avoid any stock situations. A root cause analysis identifies the reasons for exception and suggests corrective and preventive action. Products are stored at warehouse and health facilities as per the specified guidelines. The process includes management of third-party service providers, optimisation of resources and securing the supply chain.
Cold chain management
Cold chain management covers steps involved in storage and distribution of temperature-controlled drug.
The three essential capabilities of a VAN
The following three essential capabilities of VAN lead to improvements in the distribution of commodities to health facilities and patients.
1. End-to-end visibility
What is happening now? Integrated IT and data aggregation from multiple sources bring end-to-end supply chain visibility across health commodities and programmes.
2. Analytics and insight
Why is this happening? What could happen next? How could we improve? Data visualisation, business intelligence, and predictive modelling performed by a VAN team with specialised expertise.
3. Continuous improvement Let’s make it happen. Defined analytical processes create alerts, conditional actions, and workflows to internal and external recipients. Central government retains an oversight role and monitors long-run supply chain performance.
The VAN blueprint
VAN is supported by policies, people, processes and technology in a blueprint. The VAN blueprint (outlined below) guides implementation in public health sectors.
POLICY
- Enabled with visibility of the end to end supply chain
- Setup to deliver supply chain services to all programmes and tiers
- Empowered to measure performance
The VAN is more than...
- An improvement mechanism for one domain (procurement, warehousing)
- A project to improve milestones/KPIs for one programme
TECHNOLOGY
- Systems for data collection and aggregation that generate alerts and deliver actionable insight, with automation wherever possible
The VAN is more than...
- New supply chain transactional systems for recording orders, shipments, budget etc.
PEOPLE
- Team of expert professionals with unified and efficient governance
- Team organised to aggregate tasks and speed up decision making
- People trained on quantitative analysis of supply chain performance
The VAN is more than...
- A new name for the existing roles that operate the supply chain
PROCESS
- Data-driven processes that use analytical methods to plan, proactively respond and recommend continuous improvements that improve availability to beneficiaries
The VAN is more than...
- Better standard operating procedures and improved adherence
- Business process re-engineering of everything on the ‘world on a page’
- One-off system redesign
About | Framework | Pharmacy toolkit | Laboratory services toolkit | Tool Index | Acknowledgements | Contact
Source: Accenture – Visibility & Analytics Networks (VAN) Project and Improving the Last Mile Supply Chain - How a Visibility & Analytics Network Can Improve Supply Chain Performance. March 2015.