In recent weeks we have taken you through data-driven improvement and you have received answers to questions such as: What is data-driven improvement? What is involved and what do you need? You now also know why data-driven improvement is interesting, what you can achieve with it and what it can bring you. Have you not received this yet? Then view the whitepaper on Data-driven Improvements in Mobility and Logistics here.
In this article, we zoom in more on the practice. Two of our Supply Value customers explain what data-driven improvement looks like in practice and how they are working on this subject.
What data-driven improvement looks like at i+solutions
i+solutions is an organization that purchases, supplies and distributes essential medicines for the treatment of HIV, TB and Malaria in low- and middle-income countries. i+solutions wants to be the best supplier that can deliver faster, better and safer. Ed Monchen, CEO of i+solutions, explains how they do this:
“Countries submit a plan in which they indicate how many patients they have for certain diseases and how many medicines they want to receive. If that plan is approved, i+solutions comes into the picture. We purchase the medicines and ship them internationally to the central warehouse of that country. We call this the upstream side of logistics. The downstream part is about how we then get the medicines to the patient. There are major challenges here, because how do you get those medicines to all those corners of Africa, for example? For downstream logistics, we advise countries on how they can improve this and data is playing an increasingly larger and more important role in this.”
Performance indicators
Performance indicators play an important role in the projects that i+solutions carries out. “It is important to choose the right indicators that match the organization’s mission “to save and improve lives”. We really look at impact and focus mainly on stakeholder value and not so much on shareholder value. So, for example, it is also about gaining insight into how many patients we have cured or whose quality of life we have been able to improve. Another example of an indicator we use is OTIF (On Time, In Full). For example, at the beginning of the COVID era, no ships sailed and no planes flew, but we still achieved an OTIF delivery performance of 93%. For comparison; the standard is 75%, and competitors achieve 76%-80%.
Even though we have the luxury of being able to charge all freight, we also have KPIs with which we try to reduce the freight price by 3% every year. This does not work every year, but this does lead to other smart innovations, such as a freight calculator that calculates how to pack a container as efficiently as possible.”
Use of data
The four biggest problems that i+solutions encounters in their sector are too few medicines (stock-out), counterfeit medicines (counterfeit), lost medicines (diversions), and expired medicines (expiry). “For all four added together, we estimate that 20%-40% of the medicines entering the country do not reach the patients for which they are intended. It varies per type of medicine, but for Malaria, for example, there are many counterfeit medicines because they are worth a lot. Certain products often expire because they are left for too long. Inventories are then built up so high to prevent shortages that a supply chain can become clogged. The philosophy of i+solutions is to reduce inventories and increase the frequency of delivery. This way you can save up to 50% on costs, but you do need data. What is the question, where are the patients? We first try to create end-to-end visibility with IT systems, a complete overview of the supply chain that ends with the patient. There are reasonably good patient registration systems with which we integrate our own systems. If you know for every clinic in the region what kind of patients are there and how much of which medicine they use, you can translate this into the order cycle.”
App development
As for stockouts, 80% of clinics are short on medications. This is partly due to the method of financing, as there is no health insurance system. Medicines are paid for out of pocket. But it is also because there are no distributors in countries that are professional and large enough, which means that there are all kinds of small parties that operate separately and all have to make money.
“To support this, we have developed an app in which we use motorcyclists as a kind of Uber driver. Clinics can indicate in the app that they need medication. The motorcyclists can register for such a transport and if both the rating and the price are good, the motorcyclist can transport the package.
Apps are also used for the upstream. One of them is an app that allows anyone who needs it to track and trace the ordered goods. For example, we can see how the situation around the port where our container is going is developing locally. If a port is suddenly no longer safe due to the outbreak of a conflict, for example, we can quickly decide to leave the container on the ship and only deliver it to the next port.
By using these apps, a lot of new data is also collected. When an app or system has been rolled out, we use the data to further optimize. In this way, we can increasingly measure our impact quantitatively because we know exactly how many medicines we have delivered to how many patients on time. That is still quite difficult at the moment, but we are transforming from a logistics organization to a data organization.”
The full interview with Ed Monchen can be read in Supply Value magazine, edition 3
How NS uses real-time monitoring to optimize the timetable
Simon Pready is the former head of Asset Strategy at the Dutch Railways. In an interview for Supply Value magazine, he talks about the impact of Corona and the lessons that the NS has been able to learn from it, the use of data to find the balance between short-term savings and long-term investments and the NS as a door door-to-door mobility service.
At Asset Strategy it is our job to provide an optimal mix of assets to realize the best possible timetable for travellers in the Netherlands. By assets, we mean equipment, infrastructure, operating resources and mobile personnel. We seek a balance between our commercial ambitions, efficiency, the possibilities we have within our organization and the improvements we can make to continue to offer a continuously improving service in the future.
In recent years, there has been a growing focus within NS on providing a door-to-door mobility service. This also fits in with the central role that NS currently plays as a carrier in Dutch society. Ultimately, the NS app should become a kind of ‘one-stop shop’ for a door-to-door mobility service, where you as a traveller can find everything you need to get from point A to point B.
When Simon compares the Netherlands with the United Kingdom, where he has worked for 20 years, he notices that much more use is made of data in the Netherlands: “As a result, we have a much better understanding of the traveller’s behaviour through the OV chip card and decisions can be made much more evidence-based.”
Real-time monitoring
“Real-time monitoring is something we have been very actively working on in recent years: how do we get useful data from our trains? How do we use all available data from the rail sector to make better decisions? Corona has forced us to become flexible and is therefore a fantastic example of how we have been able to make informed decisions very quickly based on data. When the first lockdown started in March, we quickly went back to a so-called “basic timetable” with significantly fewer trains. We were able to go through that process so quickly because we clearly understood the operational impact of the situation. We then gradually restored the timetable to normal levels. All these decisions are made based on data: how many people are on each train? How many people can fit on the train before it becomes too crowded? What is the impact of this on our KPIs, on the punctuality of our trains? The more NS becomes a door-to-door mobility service, the more data we can collect and the better we can adapt our services to the needs of the traveller.”
Optimize timetable and deployment of equipment
“The great thing about this is that we have also been able to learn a lot from the situation that Corona brought with it in order to do this even better in the future. We currently adjust the timetable approximately 6 times a year to optimize the balance between the timetable and assets. With the help of data, we can make these types of changes faster and more often in order to be more flexible with our assets and ultimately provide a better service to the traveller. Corona has given us the opportunity to test this: we have really been able to use this situation to do things differently. Due to Corona, we have made our timetable a lot more flexible in 2020 than before, which has also allowed us to use our assets more flexibly.
Previously, we tailored this to the busiest times of the day to meet the high expectations of Dutch travellers: Dutch people like to be able to sit on the train, even during rush hour. In recent years, we have tried, together with schools and universities, to spread the demand over the day. In the form of Corona, there has been an external influence that has given us the opportunity to actually realize this. It will be fantastic if we can soon provide a better service at a lower price because we can use our assets more intelligently.”
The full interview with Simon Pready can be read in Supply Value magazine, edition 2.
