E-DRUG: New Costing Tools to Gather and Analyze Critical Supply Chain Data (2)
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[What do you think about the issues raised here? We look forward to some lively discussion.
Please share ideas and experiences from familiar settings. BS]
Dear Colleagues
I have had a look at the instructions pdf for the Supply Chain Costing Tool
(SCCT) that has been developed by the consultants John Snow Inc. and others
for USAID. The manual is around 120 pages, mostly of intense detail. I
suspect a substantial fee was involved in its preparation.
I am an old accountant ... and was a rather effective cost accountant. I
have worked in the corporate world ... and I have done a variety of
assignments in developing countries at various places in the system from
the central ministries to remote locations. I have also done quite a lot of
analytical work in connection with supply chains and value chains.
Bluntly put ... the approach being used in this work has a very low
potential for success, where success is defined as doing something that
will make the supply chain more efficient and less costly. The purpose of
management information is, in my view, to get improvement using the least
amount of data at the least cost. This system will not do this. The
approach is fundamentally wrong.
I may have missed something in my review of the manual, but I did not sense
that there was much of a concept of materiality. A starting point for
success is for there to be a way to get at the big costs and the big
inefficiencies and understand them.
Then the system should be able to drill down to find out more about these
big issues ... for this there may need to be focused data collection. Now
the data collection and the analysis has a purpose.
It should be really easy ... and I stress really easy ... to compare the
cost and efficiency of different units doing the same work. From this it
becomes possible to get a norm or benchmark and start a conversation that
can easily result in a positive feedback for improvement.
It should also be really easy to compare the cost and efficiency of the
same unit over time ... to see improvement or otherwise and to reward or
punish as appropriate. I like the reward part better.
Now it is 2013, I would argue that the system should be able to operate on
a smart phone ... maybe even on a rather low end mobile phone for data
collection and seeing some of the key results.
Having been rather critical, I appreciate the work that has gone into
putting this manual together and the related system. The work done can be
and should be used as a foundation for what is really needed.
For anyone interested, I am trying to walk the talk ... and am developing a
system that represents a radical reform of financial and socio-economic
metrics to suit the 21st century. The system has taken a long time to
emerge and is now called Multi Dimension Impact Accounting. It is a
convergence of some of the best from old style financial accounting and
modern information technology. The URL below gives access to some papers
about this initiative. Feedback is welcome.
Peter Burgess - TrueValueMetrics