1 / 34

MTTN45 Humanitarian Logistics Sourcing and Procurement 10 April 2014

MTTN45 Humanitarian Logistics Sourcing and Procurement 10 April 2014. Module. April 9 and 10 Introduction to sourcing and procurement in the humanitarian context Lecture on relevant issues Case discussion among groups Relevant topics of the day

doria
Download Presentation

MTTN45 Humanitarian Logistics Sourcing and Procurement 10 April 2014

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. MTTN45 Humanitarian Logistics Sourcing and Procurement 10 April 2014

  2. Module • April 9 and 10 • Introduction to sourcing and procurement in the humanitarian context • Lecture on relevant issues • Case discussion among groups • Relevant topics of the day • Procurement at the UN and the issue of sustainability

  3. Module4inthe course Module2:Strategic&TacticalPlanning Module3&9:Accountability,PerformanceMeasurement&Coordination Consolidate, publish Needs Module4: Source Module5:Transport Module7: Stock Module8: Distribution Assessment •NFI •Shelter •Food •Health •Watsan •Cash •Warehousespace •Officespace •Communication/IT •Transport infrastructure •Transportmeans •Equipment •Tools •SOP,standards& plans •Manuals •Contracts&framework agreements •Suppliers,donors Items Facilities&other infrastructure Systemsandrelationships Humanresources •Rostersof logisticiansand othertechnical experts •Trainingcourses 3

  4. Content • Introduction to sourcing and procurement in the humanitarian context • Needs assessment • Supplier selection • Contracting • Ordering • Follow up and evaluation

  5. Sourcing inthehumanitariancontext • Procurementaccountsforalargeshareoftotalcost(Schulz2008) • 65%procurement(suppliesand equipment)(variesif itisincludedin logisticscostin the organizations) • 15% transportandwarehousing • Howgoodsandservicesarepurchasedhasconsequencesfor effectivenessandefficiencyofanoperation • How e.g. transport,storageanddeliveriescan be setup • How coordinationofactivitiescanbe undertaken • Howrelationshipsbetweenactorsinvolvedin the supplynetwork can/shouldbe developed

  6. Some issues with it … • http://wbi.worldbank.org/wbi/multimedia/improvingtransparencyandaccountabilityinpharmaceutical

  7. Objectivesofthelecture • How to work with sourcing and procurement process and strategies in the humanitarian context • Some understanding in the links between disaster response and development Preparedness Developmentcan becomparedto Recovery, preparedness and long term response • Suddenonset • Longterm Recovery Response Source:Heigh; Everywhere(2010)

  8. Disastertypes • Naturaldisasters arenaturallyoccurringphysicalphenomenacausedeitherby rapidorslowonset eventswhichcan be: • Geophysical(earthquakes,landslides,tsunamisand volcanic activity), • Hydrological(avalanches and floods), • Climatological(extreme temperatures,droughtand wildfires), • Meteorological(cyclonesandstorms/wavesurges)or, • Biological(diseaseepidemicsandinsect/animalplagues). • Man-madedisastersare eventsthatare causedbyhumans andoccurinor close tohuman settlements. • Thiscanincludeenvironmentaldegradation,pollutionandaccidents. Examples are:complexemergencies/conflicts,famine,displaced populations,industrialaccidentsandtransportaccidents. Challenges,suchasclimatechange,unplanned-urbanization, under-development/povertyaswellasthethreatofpandemics,will shapehumanitarianassistanceinthefuture.Thesefactorswillresult inincreasedfrequency,complexityandseverityofdisasters. Source:EM-DatandInternationalFederationof the RedCrossand RedCrescent Societies:www.ifrc.org

  9. Agenda • Thepurchasingprocess • Practicingdifferentstagesofthepurchasingprocess inthehumanitariancontext • Whatcangowrong? • Caseexample

  10. Purchasing Purchasing Strategy Purchasing Organization Purchasing process Develop ordering process &order Negotiate and contract Expediting and evaluation Follow-up and evaluation Determining specification Selecting supplier Internal customer Supplier (Source:vanWeele,2010,p.9)

  11. Purchasingstrategy • Basedonhigherlevelstrategy • Whyarewebuying? • For-profitvs.nonprofit • Disastervs.Development • Responsevs. preparedness • Who'sbuying? • Company:for-profit(differentiation,lean,etc.)http://www.peepoople.com/ • Organization: nonprofit(lowestcost,fastestdeploy,etc.) • Country:developmentvs.disasterrelief!

  12. Determiningspecifications • Wronginput escalatesupthepurchasingprocess! • Needsassessment • Technicalpre-specifications(e.g.emergencyitemscatalogue,orWHO specificationsformedicine) benefits? FindingtherightneedClimate Diet Culture andtraditions etc What’s thesituation? What kindofdisaster? What kindofdiseases? Whereto getinformation?

  13. Determiningspecifications • Qualityandtechnicalspecifications • Whatquestionstoask? • Expiry date? • Productinlocalclimates? • Cheaperproductsubstitutes? • Quantity specificationandforecasting Therightvehicleforthesetting?

  14. Determiningspecifications • Disasterrelief (response) • Notknowingwhatand where • 72hourtimeframe • Whataregoodwaysof assessingneeds? • Development (preparedness) • ? • Fairlystable • Forecastingtools • E.g.WHO health initiative • E.g.Purchasingfor Haiti • Epidemiological and demographichistory

  15. Whatcangowrong? During theChad Emergency, therewasaneed forsanitary towels to be distributedtowomenrefugeesinthecamp.Discussionsontheappropriate improvisedsanitarytowelwentincirclesforaboutthree months.Duringthis time,womendidnotstopmenstruatingtoallowthemattertoberesolved.The logisticiansinvolveddidnotcomprehendwhatthealternativeoptionswereapart fromthemanufacturedproducttheymayhavebeenfamiliarwithbackinamodernsociety. (Source:WISE, 2009:6)

  16. Whatcangowrong? Thesecondwasacasefromthe2004Tsunami.Thiswaswherealogistician receivedapurchaserequesttosupplytheprogrammewithwomensunderweartobedistributedtothoseaffectedinBandaAceh.Thispurchaserforgotthat peoplecomeindifferentsizes.Heplacedanorderforone size andin one color.Eventuallytheone-sizedunderwearhadto be returned.Thiscausedadelayin distributionandadditional costs. (Source:WISE,2009:6)

  17. Selectingsuppliers • Market research/ Marketanalysis • RFI,RFQ,RFB • Evaluationandaudits • Supplierselection Criteria(price,quality,lead-time,reliability) Strategies • • • Competitivebiddingandtenders • Spotpurchase • Continuepurchasefromsupplier • Prepositioned • Donations Single vs.multiplesourcing Globalvs.localsourcing(availability)

  18. Comparativebidanalysis SUPPLYCHAINDEPARTMENT RequestNo: Specification: Country: ProjectCode: Budget:

  19. Whatcangowrong? Globalvs.local Thecaseofmalarianetsandhowbypurchasingthefirst batchglobally from the westerncountrieswithout realizing the unavailabilityoflocal production;bythesecondyearwhenthe netswere wornout,ahugeproblemwasfaced. Competitivebidding Duetopublic procurementregulationsoverarchingall humanitarian organizations, purchaseofstationarywasrecentlysuggestedtobecentralizedinoneoftheorganizations.Thismeansthatsuppliersare invitedtosubmitofferstoapublictendersomewhereinEurope,storedinacentralwarehouse,andthen shippedto thelocaloffices.Asidefrom thepossiblyquiteexpensivecostoftransport,theenvironmental consequences,thepossibleaddedtransactionasopposedtolocalspotpurchaseisnot takenintoaccount.

  20. Whatcangowrong? Pushingfor lowerprice(vaccinemarketfailure) Thevaccine market being highlyregulated experiencedbigfailuresinthe beginningofthecentury.Buyerswereonlypushing for lower priceandhencetryingtobuy fromsinglesources.Othersuppliersnothavingthecapacity hadtoexitormerge.As aresultbuyersfaceda monopolymarket withshortageof supplycapacity.

  21. Contractingandnegotiation • Longtermorshortterm • Detailedandhard,softandreplacedbytrust and norms • Termsandconditions • Quality requirements • Specificpackaging • Responsibilitiesindelivery,etc.

  22. Goodsmustbepro,perfypackedtoIJJreventclama_geofanykindandPadlistmust aa:ompanythespmentto"ndicatecontentsofeadh.shipment.Pacta,g.esshouldbeproperlylabeledtoindicateSr'sname,ConsigneeandPurchaseOr-derNumber. 6.PaymentTenns PUIRCHASEAGREEMENT lli)ate_ (STATEW1M:EOFORGANIMTION)willpaydiepun:ih:asepJic:eIlia e,g.bankwiretransfertoSeller'slb<ulkaccountindicatedbelow.Bank wirefeesareforSeller'.s.acc:olDL Paymentwillbemadeinfullonreceiptofconfirmationfrom(STATENAME 6.1 IPURClHIASECONTRACTlfORTHESUPPL"ii'OF 62 OFORGANJSATION) All·rwoicesandothernecessary doomnent5.shallbesenttotheattentionof thefolICM1ing{STATENAMEOfORGANISATlON)representative:; 63 IBETWEEN: {StiltenilllleofOrga.ni5ation)((STATEl\Wvl.EOFORGAMSATION'l"JINameofCountryOfficeifapplicable) AND 'Jl:fSupplierIHer·ebyknownasseller) 7.Duties,.Taxes.Customs Sellerisresponsibleforallap,plicablesates,exportandimport dutiesandtaxes, whetherincol.Dtryoforiginaranytransitcountry,andensurin,gthatallnessarylicensesorcustomsclearances.areobtained. 1.GoodsPurchased 11 (STATEl\Wvl.EOFORGANliSATION)a_1,7,feestoIJJUrcha!Se,andSelleraueesto sell,tihefollolhingitem 8.Termination8.1 12\/a1TC1nty:Oneyear ItemtobeofgoodqualityandCD11formtoindustrystandardsforfik.eitems.(STATE 1'Wv1EOFORGANISATIONIr'esE!f'.'estherighttorejectanyGoods whidha!"edefectiveinmaterialorworkmanship,andmay,inadcfitiontoanyotherlegalremed2s.,ratumsudhGooostoSetlerat Seller'seic;penseorotherwisecispaseofsud!Goodsina mmmercialy!"easonablemanner. (STATENAfvtEOFORGANlSATION)mayterminathisContractatanytime :Should theanticipatedfundingforthisprojectfromit5dooor(s)beeliminated,arforany otihe.. reason.Inthe!!WiitofsudratE!f"minatian, SellerwillbeIPiiidaccordi11gtothepaymenttE!lilllSspecifiedhereinforanyGoodsac:.tuallyshippedpriortothet.ermin:ationdatethatconformtotlhiisContract. ThisCo:ntll"a.ctmaybeterminatedimmediately by eitherpartyintheeventaf abreachoftheprovisions he..einbo,itileotherparty,inadditiontoWhatever ramediesordamagesareprovidedunderthegovemin,g·law. ThisContractma,ybet:erminatedbyeitherpartyintlhe eventofany interveningll'forcemajE!lmG(naliural<ftSaSter,war,etc.)recogniczedunder thegoverninglaw. 8_2 2. Price 'Priceiooudesfreiqtrtandinsurrmcefo,.deliveryto(STA1iErtAMfOFORGAMSAROM 83 3.Shipment.andDeiveryTerms 3,1 SellerwillarrangeforshipmentoftheGoods,atSeller'seic;pense,to{State name ofOrpnisation)operationsin at the OF 91.Miscellaneous foUowingdeliveryaddress:(STATENAMEORGANISATIOl\li__ SellershallnCJtassignit:sri,gntsorobligationswulerthisContf'ilct,inwholeorin part,norenterintoanysubrontractt.operformanyportianaftlhisContract,withoutthewrittenconsentaf{STA1ENAMEOFORGANlSATIOl\I)_ThisContractS11persedManyandaICJtheragreements,oralorwritten, !between(STA1ENAMEOfORGANliSAllOO)andSellerwithrespecttothesubjectmatterhereof,andooagreement,statement,orIJJKlflliserelatingtothe5Ubjectmatterof thisContractotherthanllhatwhichiscontainedhereinShallbebindingpcmtheparties.lhisContractmaynotbeamendedtbo,iwrittenagreementofbothparties. SellerreestoindemnifyandlhoJdharmless{STATENAMEOFORGANISATION)fromanyand alldairnsotrlrablUtiesinc:ur!"edby(STA1ENAMEOFORGANlSATIOlll)as aresultofSeller'sactionsoramissiansinperfonningtlhisContract. Sellerwarrants1hatit:s1performanc:eofthisContract,andtheGxldssup,plied1underthisCo:ntract:,willcomplywitlhalapplicablelawsand ragulatiDns. ThisC:Ontract.shallbego'lemedbythelawsoftheStateof (ornameco11ntry)_unlessotherwiseaueedlbythe p;ilties hereto,anycontroverrsyordaimari:singoutoforrelatingtothisContractwhidlremainsl!nresolvedafte..negotiationshallbesettiledbo,i bindingarbitrationbeforetheStateArbitratiDnAssociationac:amlin,g:toit:s 9.1 Shipmentwill bevila1_ Sellerw·Ii:rovldeappropriatenotific::atronto{STATENAMEOF OF 32 33 92 ORGANISATIOl\I)priortosh"pmenttoenable(STATENAMEORGANISATION),orathi:rdpartyiioncompanyoffStatenameof Organisation)dioice,toinspeotthegoodspriortoshipment.HrequiredSellerwillarraqgeforinsur:aneeontheg.oods,atSEiierseic;pense,uptothe pointofdeli:ver,ito{STATE.NAMEOFORGANISATION.I,usingadulylicensedand!"eputable·nsurancecompany. Sellerwilll"etaintitleto,andrisikoflossfor,theGo<idsuntiltheyare 3.4 93 3..5 delivered to (STATENAMEOfORGAMSATIONIin 9.4 4. Delivery schedule 4.1TiirneisoftheessenceinperfonningthisContract,,andSellerwillensure thattheGooclSaredelill'eredtothedeliveryaddressnolatertl\anthe 9..5 42Apenaltyof l:'.16willbeohargedforeveryweekdelayed

  23. Whatcangowrong? Poor packagingspecifications Not givingspecificspecificationsandrequirementsof packaging,resultedinboxesandpackagesthatcouldnotbestored properly.(seepicture)

  24. Contractingandnegotiation • Whodrivesthenegotiation? • Whatsafeguards? • Measurestoincreaseleverageinnegotiations • Grouppurchasing • Increased shareof information • Futurecontracts • Diversification

  25. Ordering • Spot purchaseor orderfromcontractedsuppliers • Trustindelivery • Howmuchtoorderandwhentoorder

  26. ORGANISATIONSNAMEANDLOGO ORGANISATIONSADDRESS To: Attention: Date: FaxNo. OurFileRef. CC:Country office: RegionalOffice: ForInformation: Purchaseordersample Total No.ofpages Teldirect.: Email: Faxdirect: From: Re:PURCHASEORDER GOODS– DESTINATION Youroffer, Our Ref. Reg. No……………… DearSir/Madam, Thankyou foryourabove mentionedoffer.We are pleasedto confirmour orderasfollows:- Seller SupplierNameSuppliersAddress Name ofbuyingOrganisation + Address Buyer Goods Describegoods Describegoods Transported by…………………………. Transport Time ofDelivery:ETD(Estimatedtimeof departure+place) ETA(Estimatedtimeof arrival +place) Packing Descriptionoftypeof packingdesired(Strongexport Packing suitablefor transportationmethodand roughHandlingup to finaldestination

  27. LOCAL PURCHASEORDER DELEGATIONADDRESS NO:prenumbered TOBEQUOTEDINALLCORRESPONDENCE (arappelerdanstoute correspondance) Purchaseordersample DATE THISPURCHASEORDERISONLYVALID DULYAUTHORISEDSIGNATUREandSTAMP CEBONDE COMMANDE N'ESTVALABLEqu'AVECUNESIGNATURE etUNTAMPONAUTORISES

  28. Ordering • Development • Partofanongoing contract? • Predetermined terms • Specifictime frame • Disasterrelief • One-timeorderorcontracts? • E.g.Frameworkagreements • Whatwouldthetermslook like? • Timeandplacenotclear

  29. Whatcangowrong? Delayedordering Oneofthe top reasonsof stock-out. CountryX,Y, andZ,"late" order placementwithNGO January December Time Supplier deliveryto countries Countriesorder placementwith NGOaccording tocontract NGOorder placement with supplier accordingto contract

  30. Expedition,follow up and evaluation • Supplierevaluation?Basedonwhatcriteria?Howto measure?Wheretogetinformation? • Qualitycontrol(medicine,nets,blankets,food) • Localsupplierdevelopments(why?)

  31. :sG1un'.e:Tearfund SupplierRatingTool SupplierName:Product/Service Provided: ReasonForRating: AnnualReview: YES /NO ProblemfServiceIssue: YES/NO New Supplier: YES/NO Otfler•: YES/NO • (Otfler)PteaseSpecify: Fixedfortheperiodof thecontract PricingPolicy: Fixedperiod Annualreview Variable -"- ) PricingPolicyReviewDate: DateofLastReview: --0 NextReview Date: AnnualSpend(NewSuppli.erShowAsAnEstimate): TearFundfSupplier ContractTermsand Conditions: TotalRatin,g:Total score,, NumberofAssessedMeasures Status: VeryGood(4.5+")/Good(3.J-4.4)/Average1f3.&-2.9)/Poor(2.8-2.1) /VeryPoor(W(2.0-0.0) PreferredSupplier{Tender)1PreferredSuppli.er(Quotation)F°IXedQuantityContract Non-CompetitiveArrangement ContractualStatus: PerformanceImprovementActions:----------------- • DeleteasAppropriate Rating:·completedby(Name):------------------- RatingKey: Signed:Date:_ 1=Poor 2=Fair 3=Acceptable 4=Good -Notacceptable - Notconsistent,needsimproving -Someinconsistency -Reliable&consistent

  32. Whatcangowrong? Supplierevaluation Notthatcommoninthepurchaseprocessinthe humanitariansector. WHOpre-qualifiedlistofmedicineandvaccinesuppliers.

  33. Purchasing Purchasing Strategy Purchasing Organization Purchasing process Develop ordering process &order Negotiate and contract Expediting and evaluation Follow-up and evaluation Determining specification Selecting supplier Internal customer Supplier (Source:vanWeele,2005p 13[2010,p.9])

  34. Case discussion • Your task: Set up an action plan for sourcing and procurement • Answer the following questions for each stage of the purchasing process: • What kind of information do you need? • Where do you need to find the information from? • What strategies and practices should you carry out? Develop ordering process &order Negotiate and contract Expediting and evaluation Follow-up and evaluation Determining specification Selecting supplier

More Related