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Oracle Supply Chain Management
September 9, 2020
Much more than buying a paper clip – rethinking the government supply chain
By Philip Craig, Sales Development Manager, UK Public Sector
Read time: two minutes
Every day public servants buy the goods and services they need to deliver front line services. The range of these services is vast – from laptops to locum doctors, medicines to laundry services. They seek to gain the best value possible from suppliers, realising economic benefits that might be reinvested in frontline services. The availability and quality of the goods and services make a vital contribution to meeting the diverse and changing needs of citizens.
Like the private sector, governments rely on a supply chain – a system of producing and delivering a product or service - to get the right items to where they are needed quickly enough to meet demand. But governments face even greater supply chain challenges. Public sector regulations encourage free and open competition but can contribute to delayed procurements. And when supply chains fail the impact is not reduced profit but less resilient public services and increased risks to staff. In case of health and social care, this can directly influence lives.
Changing circumstances are also making it harder for governments to predict demand. This has never been truer than over the last few months, as the COVID-19 pandemic has hit supply chains, and the priority for government has been reinvention – addressing shortfalls of key items, including personal protective equipment, securing a vast number of items from overseas and pivoting domestic production to alternative goods.
Who would have thought that fashion houses would be making non-surgical gowns or breweries making hand sanitiser?
Very rarely highlighted by ministers or senior officials, until now, governments need effective stock and inventory management systems, collecting and processing demands from the front line and tracking the movement of goods. Business intelligence underpins these systems, including robust data for forecasting demand and evaluating alternative scenarios, to put in place evidence based contingency arrangements, the monitoring of deliveries to ensure they are made on time and are accurate and to identify and address any blockages. Suppliers can be monitored on a regular basis to understand the risk of any failure and the impact of any failure on front-line services.
Commercial sectors firms, including medical device organisation, have been implementing these systems for many years. However, under extreme stress, the pandemic has exposed that not every part of government can achieve this reinvention.
Too often inadequate systems, processes and software stands in the way of effective and efficient supply chains.
Officials desperately need access to collaborative supply chain planning tools. And the answer is to be found in cloud-based applications that are inherently more flexible and adaptable to change. Data can be spun up instantly through a common platform, allowing real-time monitoring of risks, including understocked items. Forecasts can be shared with suppliers, to get their commitment to fill gaps and uncover opportunities to improve quality and supply.
The latest innovations can build the future resilience of government, enhancing both efficiency and awareness across the supply chain. Common business processes such as the processing of purchase orders, changes to orders and shipment notifications, can be automated. Information is made available through standard digital messaging systems. And continuous enhancements and embedded technologies – including artificial intelligence and machine learning – will help to identify anomalies, predict possible outcomes and make recommendations.
As supply chains are reinvented, my hope is that greater emphasis is placed on governments and suppliers collaborating to better prepare for future shocks. If the past decade has seen a transformation in the way government engages with its supply chain, through a process of standardisation and centralisation, often focussing on cost, I believe the next decade will see governments judge supply chains more on their resilience and reliability. It will always be harder to produce the most efficient response when organisations (and even countries) are acting individually.
I’d be keen to hear from colleagues across government, about how you have had to adapt over the past few months, the challenges you face and your future plans. And please get in touch for examples of how Oracle is working across the public and private sectors to reinvent supply chains.