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LLamasoft: Improving Public
LLamasoft: Improving Public p g
Health Supply Chains through
p gHealth Supply
Chains through gNetwork Design
gNetwork Design
3/22/2011 Copyright LLamasoft 2011 - All rights reserved 126
LLamasoftOverviewLLamasoftOverview
• EmployeeownedsoftwarecompanyheadquarteredinAnnArbor,MichiganUSAq , g
• Industryleaderinsupplychaindesign,modelingandoptimization
P id f h l i i d• Provideroftechnology,trainingandservicestohelporganizationsdesignsupplychainsthatwill:
R d Reducecost Maximizeprofit Improveservice Managerisk
Improvesustainability
Acquire a lasting competitive Acquirealastingcompetitiveadvantage
LLamasoftPublicHealthSolutionsLLamasoftPublicHealthSolutions
• Mission:positivelyimpacthumanhealthbyleveraging Network Design technology to makeleveragingNetworkDesigntechnologytomakebettersupplychaindecisions
• Delivery ModelsDeliveryModels–ShortTermAssessments–LongTermEngagements–TechnologyTransfer/CapacityBuilding–Other:advisoryservices,technologydevelopmentondemanddemand
• RecentProjects:Lesotho,Ethiopia,Kenya,Côted’Ivoire,Nigeria,ElSalvador,DominicanRepublic,gGuatemala,andPanama.
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SupplyChainManagementandNetwork DesignSupplyChainManagementandNetwork DesignNetworkDesignNetworkDesign• SupplyChainManagement
– Supply Chain Planning + Supply Chain ExecutionSupplyChainPlanning+SupplyChainExecution–Focusonrunningandmanagingthecurrentnetwork
• Supply Chain Network Design• SupplyChainNetworkDesign–Modelingandanalysistodeterminehowtoconfiguretheentiresupplychain•Structure AND policy•StructureANDpolicy•Cross‐functional(procurement,warehousing,inv&transpo)•Endtoendscope
• SupplyChainNetworkDesignhelpssystemplannersandpolicymakerstransformtheirsupplychainsfromHistoricalAccidents to Intentionally Engineered SystemsAccidentstoIntentionallyEngineeredSystems
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ProjectExamplesProjectExamples• QuantifyingtheeffectsofcentralizedversusdecentralizedsystemsandmultipleDCechelons.
• Redesigningtransportationnetworkstomaximizeservicelevels.A l th i t f l l l f hi t• Analyzetheimpactoflargevolume,lowfrequencyshipmentsofsupplies,improveprocurementschedules.
• Predictingfuturesupplychainneedsanddefiningperformanceg pp y g pmetricstoenablepolicymakerstostrengthenthepublichealthsystems.
• Collaborating with the Inter Agency Working Group to develop• CollaboratingwiththeInter‐AgencyWorkingGrouptodevelopaLogisticsModulefortheUnifiedHealthModel(UHM).
• MoreShortTermAssessments:takeanoveralllookatthecurrentstateofthesupplychain,whatdataisavailabletoconductananalysis.
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CaseStudy:Côted’IvoireDistrictHub Assessment (SCMS)CaseStudy:Côted’IvoireDistrictHub Assessment (SCMS)HubAssessment(SCMS)HubAssessment(SCMS)• TheIssue
Whil th b f f iliti i d b th Ph i–WhilethenumberoffacilitiesservicedbythePharmaciedelaSantéPublique (PSP)hasincreasedsignificantlyinthelast60+years,theorganization’scapabilitytoserveitscustomershaschangedverylittle.
• The Objectives• TheObjectives–Willadecentralizednetworkincreaseservicelevels?–Inadecentralizednetwork,canDistrictPharmacies bea dece t a ed et o , ca st ct a ac es beusedasDistrictHubs?Ifyes,whichonesarethemostoptimal?In a decentralized network which District Hubs would–Inadecentralizednetwork,whichDistrictHubswouldservewhichcustomers?
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IdentifyDistrictHubsIdentifyDistrictHubs
• GreenfieldAnalysistoidentifypotentialDistrictHubsHubs
1. Abidjan (PSP)2 Ab
Korogo2. Abengourou3. Bouake4. Daloa
g
BouakeMan5. Gagnoa6. Korogo7 Man
BouakeMan
YamoussoukroDaloa
7. Man8. San Pedro9. Yamoussoukro
AbengourouGagnoa
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AbidjanSan Pedro
DistanceOptimizedScenarioResultsDistanceOptimizedScenarioResults• Hub1:Gagnoa,Hub2:Abengourou,Hub3:Yamoussoukro,Hub4:Korhogo,Hub5:Daloa.
Current 1 HUB 2 HUB
3 HUB 4 HUB 5 HUB
ThroughputbyFacilityThroughputbyFacility
• AddingmorethanthreeDistrictHubswouldnotfurther alleviate capacity issues at the PSP’s mainfurtheralleviatecapacityissuesatthePSP smainwarehouseinAbidjan
Adding a District Hub in Gagnoa would have the largesthave the largest impact, followed by Abengourou and then Yamoussoukrothen Yamoussoukro
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TransportationRoadDistancesTransportationRoadDistances
• CitytocitydistancescalculatedinSupplyChainGuruGuru
Abidjan to Yamoussoukro
138
Yamoussoukro to M’Bahiakro
CustomerServiceDistanceHistogramCustomerServiceDistanceHistogram
Current State
1 HUB
2 HUB
3 HUB
4 HUB
139
5 HUB
ImplementationCostEstimatesImplementationCostEstimates
Baseline 1 Hub 2 Hubs 3 Hubs 4 Hubs 5 Hubs 6 Hubs 7 Hubs 8 Hubs
Transportation Cost (USD) vs. Total PSP Distance Driven (Km; CWH - DH)
Baseline 1Hub 2Hubs 3Hubs 4Hubs 5Hubs 6Hubs 7Hubs 8HubsTotalDistance
(Km) 189,910 158,838 147,357 139,342 134,193 130,314 129,320 129,320 129,320
TotalCost(USD) $786,195 $657,563 $610,032 $576,853 $555,536 $539,480 $535,363 $535,363 $535,363
Variable Warehousing Cost
Total Cost (USD)Total Cost (USD)1 Hub: ~$250K2 Hubs: ~$365K3 Hubs: $365K3 Hubs: ~$365K4 Hubs: ~$360K
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ConclusionsConclusions
• Currentsupplyissuesmustbeaddressedbeforedecentralization is considered. Frequent stock‐outs at thedecentralizationisconsidered.Frequentstock outsatthecentrallevelwillresultincontinuouslylowservicelevels.
• IfPSPchoosestodecentralizeitsnetwork,theoptimallocationswouldincludeGagnoa,Abengourou,andYamoussoukro.
• The first optimal hub to open is Gagnoa Gagnoa has several• ThefirstoptimalhubtoopenisGagnoa.Gagnoa hasseverallargecentersofpopulationarounditandwouldhavethelargestimpactonPSP’soveralloperations.
• Duetothesensitivenatureofcoldchainproducts,itwasrecommendedthattheseproductsbeshippeddirectlyfromthecentralwarehouseinAbidjan;DPsshouldactascross‐jdocks.
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FamousPublicHealthNetworkDesignMythsFamousPublicHealthNetworkDesignMyths
• Wecan’tgetenoughdata• Wecan’tchangeanything• Wealreadyknowwhatweneed:moreresources
• Networkmodelingistoocomplicated,we just want the “simple solution”wejustwantthe simplesolution
• Publichealthis“different”:youcan’ttreat people like numberstreatpeoplelikenumbers
• Weshouldmakeimportant,complicated,decisionsbasedongut‐feelandintuition!
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