BPH VII SEMESTER

LOGISTIC MANAGEMENT AND

SOFTWARE APPLICATION

LOGISTIC MANAGEMENT AND SOFTWARE APPLICATION COMPILED BY ANIL SHRESTHA

BIRAT HEALTH COLLEGE
 UNIT 1: INTRODUCTION TO LOGISTIC MANAGEMENT
1.1: Define logistic and logistics management.
What is Logistics?

 Logistics includes all the management activities involved in making products and getting
it to the client, beginning with flow of materials from initial source and ending with the
delivery to the end users (clients).
 Logistics system includes the total flow of products from the acquisition of raw materials
to the delivery of finished goods to users and the related flow of information that both
controls and records the movement of those products.
 Logistics: Planning, execution, and control of the procurement, movement, and stationing
of personnel, material, and other resources to achieve the objectives of a campaign, plan,
project, or strategy.
 The resources managed in logistics can include physical items, such as food, materials,
equipment, liquids, and staff, as well as abstract items, such as time, information, particles,
and energy.
 Logistics is the management of the flow of goods, information and other resources
between the point of origin and the point of consumption in order to meet the
requirements of consumers.
 Logistics involves the integration of information, transportation, inventory, warehousing,
material-handling, and packaging, and occasionally security.
 Logistics management is the part of supply chain management that plans, implements,
and controls the efficient, effective forward, and reverse flow and storage of goods,
services, and related information between the point of origin and the point of
consumption in order to meet customer's requirements.
 Logistics system includes the total flow of products, from the acquisition of raw materials
to the delivery of finished goods to users, as well as the related flow of information that
both controls and records the movement of those products.
 A logistic system should provide excellent customer service by ensuring the quality of
three basic elements-
 Storage
 Transportation
 Service delivery points
Example:

 A restaurant is one example of a simple logistics system.

 The kitchen is a storage facility; the food is held there until it is delivered to the customer.
 Waiters provide the transportation; they carry the food from the kitchen to the customer.
 The tables are the service delivery points, where customers sit to order and eat the food.
A logistic system must fulfill

 The right goods

LOGISTIC MANAGEMENT AND SOFTWARE APPLICATION COMPILED BY ANIL SHRESTHA 1

  In the right quantities
 And the right condition
 To the right place
 At right time
 For the right cost
Functions:
• Logistics increases program impact
• Logistics enhances quality of care
• Logistics improves cost efficiency and effectiveness
• Must convince policymakers and decision makers that contributions to strengthening
logistics systems will result in increased overall program effectiveness.
• For any public health program to deliver high-quality, comprehensive services; and to
ensure commodity security, a robust logistics system for managing health commodities
must be in place.
Highlight:
• When a choice of contraceptive methods is available in health facilities, more women use
contraception. When more women use contraception, it impacts a number of key reliable,
indicators: maternal mortality, infant mortality, and total fertility rates all decrease.

Logistics enhances quality of care

• Well-supplied health programs can provide superior service, while poorly supplied
programs cannot. Likewise, well-supplied health workers can use their training and
expertise fully, directly improving the quality of care for clients.
• An effective logistics system helps provide adequate, appropriate supplies to health
providers, increasing their professional satisfaction, motivation, and morale. Motivated
staff are more likely to deliver a higher quality of service.
Logistics improves cost efficiency and effectiveness

 It reduces losses due to overstock, waste, expiry, damage, pilferage, and inefficiency;
 It protects other major program investments; and
 It maximizes the potential for cost recovery.

1.2: Evolution of logistics management.

Definition:
“Logistics is the art and science of management, engineering and technical activities concerned
with requirements, design and supplying, maintaining resources to support objectives, plans and
operation.”
Society of logistics engineers (sole) 1974.

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 Around 2700 B.C.
Material handling technology in pyramid construction. Blocks of stone weighing several tons
were transported and assembled at the construction site.

Around 300 B.C.:

Revolutionary Greek rowing vessels – the new foundation of intercontinental trade.

Around A.D. 700:

Procurement logistics in the construction of the Mezquita Mosque – pillars came to Spain from
all parts of the Islamic empire.

Around 1200:
The international network known as the Hanseatic League – cooperation for transport bundling
and international sea transport.

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 Around 1940:
Military logistics during the world wars – transfer of military logistics concepts to the business
world.

1956:
Invention of the sea container – structural evolution of world trade and the boom of
international flows of goods.

Evolution:
• The term logistics comes from the late 19th century: from French logistique, from loger 'to
lodge'.
• Logistics is considered to have originated in the military's need to supply itself with arms,
ammunition, and rations as it moved from a base to a forward position.
• In the ancient Greek, Roman, and Byzantine Empires, military officers with the title
Logistikas were responsible for financial and supply distribution matters.
• In the past, logistics was considered a custodial activity. Storekeepers were the custodians
of supplies stored in small storerooms and large warehouses. Consequently, the people
who make the health logistics system work, were not considered an important part of
programs.
• Fortunately, as time passed, more and more program managers have come to understand
how important logistics is to a program’s success.
Today:

 Supply chain management – a look at the entire logistics chain from the vendor’s supplier
to the end customer.
 Advancing globalization – efficient logistics as a competitive edge in the era of
globalization.

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 1.3: Importance of logistics.

1. Logistics is the bed rock of trade and business.

 Without selling and or buying there can be no trade and business. Buying and or selling
takes place only when goods are physically moved into and or away from the market.

2. Leads to customer satisfaction through superior customer service.

 Organizational objectives of P [Productivity],Q [Quality],C [Cost],D [Delivery],E

[Employee Morale],F [Flexibility],S [Safety],H [Health],E [Environment] are set to meet
customer expectations of Q,C,D. Q, C, S, H, E are parts of must be quality that a customer
expects. Logistics addresses D, F objectives which lead to customer satisfaction through
superior customer service
3. Integrates logistical activities
In conventional management environment, various activities of logistics work in isolation under
different management functions. Each pocket trying to sub optimize its objectives at the cost of
overall organizational objectives. Purchasing trying to purchase at minimum price at the cost of
what is needed by operations. Operations produce large quantities at minimum production cost
ignoring demand leading to doom inventory. Logistics function of management brings all such
functions under one umbrella pulling down inter departmental barriers.
4. Competitive edge:
In the fiercely competitive environment logistics provides the edge. Due to technological
revolution most of the products are moving into commodity markets. In a commodity market
where price is controlled by competition, where there is no product differentiation in terms of
quality parameters like performance & reliability, where brands are almost irrelevant,
competitive edge is that of availability of product and service in terms of time, place and quantity.
5. Logistics wins or loses wars

 British lost American war of independence due to poor logistics.

 Rommel was beaten in the desert by superior logistics of Allies.

6. Supports critical functions

Like operations and marketing Strong logistics support enables a company to move towards JUST
IN TIME production system for survival in a highly competitive market a) Interface with
marketing these days marketing a product is increasingly on the strength of availability and
flexibility as we discussed earlier. Stronger emphasis is on the last of four Ps of marketing
[product, price, promotion and place]. Logistics provides the interface between production
function and marketing function. Marketing is trying to sell the product in the market place.

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 Logistics makes the product accessible to marketing by acting as interface between the function
that produces it and the function that makes the consumer buy it. This interface is gaining
importance due to following changes that are sweeping the market making many companies
adopt JUST IN TIME production system. a. Change in the customer: demanding, knowledgeable,
conscious of rights, lacking in brand loyalty, changes preferences very fast, and expects very high
degree of service b. Many products are moving towards commodities market: product
differentiation in terms of quality of performance is vanishing and brands are losing their magic.
As a result of above we find that availability is an important determinant of purchasing decision.
7. Logistical costs:
For individual businesses logistics expenditures are 5% to 35% of sales depending on type of
business, geographical areas of operation, weight/value ratios of products and materials. This is
an expensive operation. Improvement in the efficiency of logistics function yields savings as well
as customer satisfaction

1.4: Logistic management cycle and functions.

• The cycle is circular, which indicates the cyclical (interdependence) or repetitive nature
of the various elements in the cycle.
• Each activity—serving customers, product selection, quantification and procurement,
and inventory management—depends on and is affected by the other activities.
• The activities in the center of the logistics cycle represent the management support
functions that inform and impact the other elements around the logistics cycle.

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 Major activities in the logistics cycle:
a) Serving customers: Everyone who works in logistics must remember that they select,
procure, store, or distribute products to meet customer needs.
• Each activity in the logistics cycle, therefore, contributes to excellent customer service
b) Product selection:
In any logistics system, products must be selected. In a health logistics system, a national
formulary and therapeutics committee, pharmaceutical board, board of physicians, or other
government-appointed group may be responsible for product selection.
c) Forecasting or Quantification:
After products have been selected, the required quantity and cost of each product must be
determined. Quantification is the process of estimating the quantity and cost of the products
required for a specific health program (or service), and, to ensure an uninterrupted supply for
the program,
Procurement:
After a supply plan has been developed as part of the quantification process, quantities of
products must be procured. Health systems or programs can procure from international, regional,
or local sources of supply;
d) Inventory management: storage and distribution.
After an item has been procured and received by the health system or program, it must be
transported to the service delivery level where the client will receive the products. During this
process, the products must be stored until they are sent to the next lower level, or until the
customer needs them. Almost all businesses store a quantity of stock for future customer needs.
Heart of the logistics system
Information is the engine that drives the logistics cycle; without information, the logistics system
would not run smoothly.

e) Logistics management information systems

In the beginning of the cycle, managers gather information about each activity in the system and
analyze that information to make decisions and coordinate future actions. For example,
information about product consumption and inventory levels must be gathered to ensure that a
manager knows how much of a product to procure.
Other activities at the heart of the logistics cycle
Organization and staffing:

 A logistics system can only work if well-trained, efficient staff monitor stock levels, place
orders, and provide products to clients. Health programs assign the appropriate

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 resources to staff (for example, supervision authority and technical knowledge) to
complete logistics activities.
• In Nepal BLT, Cold Chain Management Training, Pull System Training, District level
procurement Training for MCHWs and VHWs.
Budget:

 Allocation and management of finances directly affect all parts of the logistics cycle,
including the quantities of products that can be procured, the amount of storage space
that may be available, the number of vehicles that can be maintained, and the number of
staff working in logistics.

Supervision:

 Supervising the staff who work within the logistics system keeps it running smoothly and
helps to anticipate needed changes. Routine, effective supervision, helps to both prevent
and resolve supply problems and human resource limitation.
Monitoring and evaluation:

 Routine monitoring and periodic evaluation of logistics system activities help

demonstrate how well the system is performing, the areas that can be improved, as well
as the system’s impact on service provision. For Example-

 The quality of your procurement decisions

 The quality of products before they enter the distribution system

 The quality of the products while they are being stored and distributed

 The quality of the customer’s experience

Logistic Management Unit Functions:

1. Logistics data management:
• communicating directly with facilities for receiving, reviewing, and approving reports
and/or orders; following up on missing reports/orders; and generating feedback reports
for the facilities
• Aggregating, analyzing, and interpreting logistics data to produce reports on logistics
system performance, which are disseminated up and down the supply chain to all
appropriate stakeholders.
2. Quantification:
• conducting annual quantifications and quarterly quantification updates
• identifying gaps in supply and mobilizing necessary resources
• Developing and managing supply plans.

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 3. Monitoring and evaluation:
• Monitoring the supply pipeline
• Calculating routine logistics indicators and sharing information related to system
performance
• Assessing stock status
• Coordinating all logistics system assessments.
4. Supervision:
• Ensuring that supervision visits include logistics components.
5. System design, implementation, and training
• Designing/revising logistics systems
• Developing and maintaining logistics standard operating procedures manuals and
curricula - ensuring appropriate staff are trained in logistics system procedures.
6. Coordination and collaboration
• Convening regularly scheduled coordination meetings with stakeholders involved in
financing, procuring, or distributing commodities.

1.5: Logistic management Division.

1.5.1: Introduction, Objective, strategies of logistic management division. (LMD)
Introduction:
 LMD has established under the Department of health service in 2050/51 (1993) with a
network of central and regional medical stores as well as district level stores.
 The major function of LMD is to procure, store and distribution of health commodities for
the health facilities of government of Nepal.
 It also involves repair and maintenance of biomedical equipment's, instrument and the
transportation vehicles.
 In order to systemic the management of logistics, the logistics management information
system unit was established in LMD in 1994.
 LMIS unit collects and analysis quarterly LMIS reports from all of the health facilities
across the country, prepare report and disseminates it to: Forecast annual requirements
of commodities for public health programme including family planning maternal,
neonatal, and child health, HIV and AIDS commodities, vaccine and Essential Drugs.
 Help to ensure demand and supply of drugs, vaccines, contraceptives , essential medical
supplies at all levels;
 Quarterly monitor the national pipeline and stock level of key health commodities.

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 Overall objective of LMD:
 To plan and carry out the logistics activities for the uninterrupted supply of essential
medicines, vaccines, contraceptives, equipment, HMIS/LMIS forms and allied
commodities (including repair and maintenance of bio‐medical equipment) for the
efficient delivery of healthcare services from the health institutions of government of
Nepal in the country.
Strategies of LMD:
 Logistics management for procurement, storage, and distribution of essential health care
commodities.
 Introduce effective and efficient procurement mechanism like multi-year procurement
and central bidding system.
 Use of LMIS information in the decision making at all level.
 Strengthen physical facilities at the central regional, sub- regional and district level for
the storage and distribution of health commodities.
 Promote web based LMIS and Equipment's/expendable items inventory system in
districts and regional.
 Repair and maintenance of bio-medical equipment, instrument, cold store and
transportation vehicle.
 Capacity building of required human resources on logistics management at all level.
 Implement effective Pull System for year round availability of Essential Drugs and other
health commodities at all levels (central, regional, district and health facilities).
Major activities of LMD:
 LMD implemented the following major activities during the FY 2068/69:
 Plan for the efficient management on procurement, storage, distribution and
transportation of health commodities required for the delivery of healthcare services to
all health institutions of government of Nepal in the country.
 Develop tender documents as per public procurement rules and regulations and procure
 Essential medicines, vaccines, contraceptives, equipment, different forms including
HMIS/LMIS and allied commodities.
 Store, re‐pack and distribute medicines, vaccines, contraceptives equipment and allied
commodities.
 . Conduct health logistics management trainings/orientation in collaboration with NHTC
up to regions, districts and other stakeholders.
 Manage to print and distribute HMIS/LMIS forms, stock books and different forms
required for all health institutions.
 Support on implementation and functioning of web‐based LMIS, web‐based Equipment
Inventory System and Inventory Management System software.
 Manage to maintain the bio‐medical equipment, machineries and transport vehicles.

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  Implement and monitor Pull System for contraceptives, vaccines and essential drugs in
the districts.
 Coordinate with all development partners supporting health logistics management.
 Supervise and monitor the logistics activities of all region (RMS) and district levels
(DPHO/DHO).
 Implement Telemedicine program in the hill and mountain districts.
 Procure, store and distribute various health commodities for Program Divisions of the
DoHS.
Components of Logistics System
1. Product Selection

2. Forecast

3. Procurement

4. Distribution

5. Logistics Management Information System (LMIS)

6. Human Resource Management

7. Finance and budgeting

Existing MOH Logistics System

a. Physical structure

b. Management structure

c. Commodities in the system

d. Information flow

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 e. Inventory control system

1.5.2: Indicator of LM

1. Quality:
These indicators are often the simplest to implement and measure. Typically they tell
you how well you are performing a specific activity—a common logistics indicator in
this classification is accuracy— including order accuracy, inventory accuracy, picking
accuracy

2. Time:
These indicators focus on the time it takes to complete specific activities. They show
where saving time during specific activities can improve the overall supply chain
performance.

3. Financial:
These indicators help managers identify the supply chain cost drivers and help move
toward a more efficiently managed supply chain.

4. Productivity:
These indicators examine how well resources are used. For example, filling vehicles to
their capacity, instead of sending out vehicles half-full, could reduce costs and improve
efficiency.

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 1.5.3: Constraints and issues of LM.

Objectives of logistics management

The General objectives of the logistics can be summarized as:
1. Cost reduction
2. Capital reduction
3. Service improvement
The specific objective of an ideal logistics system is to ensure the flow of supply to the buyer,
the:
 Right product
 Right quantities and assortments
 Right places
 Right time
 Right cost / price and,
 Right condition

Importance of Logistic Management

1. Improving customer service:
An important objective of all marketing efforts, including the physical distribution activities, is
to improve the customer service.
An efficient management of physical distribution can help in improving the level of customer
service by developing an effective system of warehousing, quick and economic transportation,
and maintaining optimum level of inventory.
2. Rapid Response:
Rapid response is concerned with a firm's ability to satisfy customer service requirements in a
timely manner.
Information technology has increased the capability to postpone logistical operations to the
latest possible time and then accomplish rapid delivery of required inventory.
3. Reduce total distribution costs:
The cost of physical distribution consists of various elements such as transportation,
warehousing and inventory maintenance, and any reduction in the cost of one element may
result in an increase in the cost of the other elements.
4. Generating additional sales:
A firm can attract additional customers by offering better services at lowest prices. For example,
by decentralizing its warehousing operations or by using economic and efficient modes of
transportation, a firm can achieve larger market share.
Also by avoiding the out-of-stock situation, the loss of loyal customers can be detained.
5. Creating time and place utilities:
The products are physically moved from the place of their origin to the place where they are
required for consumption; they do not serve any purpose to the users.
Similarly, the products have to be made available at the time they are needed for consumption.

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 6. Price stabilization:
It can be achieved by regulating the flow of the products to the market through a judicious use
of available transport facilities and compatible warehouse operations.
By stocking the raw material during the period of excess supply and made available during the
periods of short supply, the prices can be stabilized.
7. Quality improvement:
The long-term objective of the logistical system is to seek continuous quality improvement.
Total quality management (TQM) has become a major commitment throughout all facets of
industry. If a product becomes defective or if service promises are not kept, little, if any, value is
added by the logistics. Logistical costs, once expended, cannot be reversed.
8. Movement consolidation:
Consolidation one of the most significant logistical costs is transportation. Transportation cost
is directly related to the type of product, size of shipment, and distance. Many Logistical systems
that feature premium service depend on high-speed, small shipment transportation. Premium
transportation is typically high-cost. To reduce transportation cost. It is desirable to achieve
movement consolidation

Issues of LM
For effective logistics, there are several key issues: movement of product, movement of
information, time, service, costs and integration.
1. Transport of products: It is often the way that logistics is viewed in many companies.
But there is more. Moves of products should complement the company strategy. If the
emphasis is on cost reduction, lower inventories, customer service or whatever, then products
must move in a way that is consistent with the emphasis.
Product must also flow, not just move. If it does not flow, then there is not a supply pipeline.
Instead there are imbalances in inventories with components and finished goods not being
where they should be. The movement may be extremely large in geographical scope. Raw
materials and completed units can move between and among all regions of the world. While
other departments in the company may focus on select geographical regions for sourcing,
manufacturing or sales. But logistics must deal with all of these.
2. Transfer of Information.
It is not enough to move product and materials. We must know
Where they are. We must know what orders are coming in and when they must be delivered.
Information (timely and accurate) is vital for sound decision-making. The information must flow
between the company and its suppliers, carriers, forwarders, warehouses and customers.
It must also move internally among purchasing, customer service, logistics, manufacturing,
sales, marketing and accounting.
Investment in information technology is not an alternative anymore; it is a requirement for
logistics and company effectiveness.
3. The view of Time.

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 Ability to respond to the dynamics of the global marketplace must be quick. Raw materials
and components must be ordered and arrive completely, accurately and quickly. Orders must be
filled completely, accurately and quickly.
It is no longer months or weeks for lead times. Hours may decide customer service,
competitiveness and value-added. Back orders are not tolerated. If company cannot properly
respond customers will look for those who can.
4. Service is more than having to accelerate a shipment. Service is a factor of competition,
customer requirements, the company’s position in the industry, the company culture.
Logistics is the link among all this. And the more diverse the geographical scope of vendors,
manufacturing, warehouses and customers, the more critical is time.
Distance means time. Time delays are not acceptable now. Movement of product and movement
of information show their impact here
5. Cost is the key measure by which logistics effectiveness is often measured.
The highest price does not mean the best service, and it may not be the service we need. Nor
does the lowest price necessarily meet our needs. There is no doubt about how important costs
are. Minimizing the cost of the various logistics elements, such as freight and warehousing can
sub optimize the effectiveness of the logistics group and of the company in satisfying its
customers.
Cost has a relation to service. As we define our service against our costs or costs against service,
the give and take develops into our operating cost and budgets. Then we have to make sure that
the cost can be managed. Otherwise costs can go out of control, or seem to. In addition there
may be other issues such as currency conversion and fluctuations. Currency conversion and
dynamics can create unfavorable or favorable cost variances, which have nothing to do with
logistics performance
6. Integration. Logistics is a process. Effectiveness requires that each relevant element of
the organization do its part. However there is a problem with doing this.
This creates an anti-process effect. In addition to internal integration, we must bring together
and work with the external partners. Our vendors, including our carriers an warehouses, must
understand what we are doing and why. We must share our logistics vision and plan with them.
This sharing and understanding will better enable them to co-operate with and assist us. They
may be able to offer ideas and gain sharing to further improve the logistics effectiveness and the
key issues with it. Integration with our customers is important.
Everyone in a company must be working and satisfy customers. Meeting with key customers is
very good. This shows how much we value him and want to work with him. This is a competitive
advantage. Partnerships and alliances can be developed or enhanced.
7. Manpower Management:
Manpower is the trickiest of management responsibilities. You must maintain a humane
approach toward the employees while keeping the best interest of your organization in mind.
That can be a complicated equation in any managerial setup, but especially so in case of logistics
management, as the drivers and staff are often placed in different geographic locations to
maintain swift supply chain velocity. Decentralization of responsibilities, by appointing logistics
managers in key locations, with appropriate work-order management solutions can help in
more efficient management.

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 8. Processing Enormous Amounts of Information:
Logistics managers have to deal with a lot of figures and data on a daily basis, besides
coordinating smooth discharge of operations. The scope of their work includes ensuring the
safety of the fleet and staff, fleet loading, cross-checking route maps, sanctioning fuel bills and so
on. When done manually, this can be a time-consuming and tedious task that can take your
focus off from attention to details.
9. Compliance with Regulations:
Transportation rules, regulations and security norms can vary from city to city, state to state,
and quite obviously, from country to country. If you are a business catering to a global clientele,
keeping up with these varying rules and regulations and familiarizing your staff with these, can
pose a grave challenge

1.5.4: Concept, objectives and application of Logistics Management Information System

(LMIS)
Logistics Management and Information System (LMIS) in Nepal

 An effective Logistics Management Information System (LMIS) collects essential

data about stock status and consumption and ensures accountability and cost
effectiveness for all products in the supply chain.

 In the course of implementing logistics system improvement activities, an LMIS for

the ministry of health and population was designed in 1994.

 And tested in four districts of eastern region with support of JSI and USAID and
further by 1997 the system was expanded nationwide.

 At present LMIS tracts inventory data from more than 4 thousand health institution
including NGOs of the country quarterly.

 Central Store, Transit Store, Regional Medical Store, District Store, District Hospitals,
PHCs, DCs, HPs, SHPs and NGOs report every quarter basis.

 LMIS Unit collects and analyses quarterly (three monthly) LMIS reports from all of
the health facilities across the country; prepares report and disseminates it to:

 Forecast annual requirements of commodities for public health program including

family planning, maternal, neonatal and child health, HIV and AIDS commodities,
vaccines, and Essential Drugs;

 A logistics management information system (LMIS) is a system of records and

reports – whether paper-based or electronic – used to aggregate, analyze, validate
and display data (from all levels of the logistics system) that can be used to make
logistics decisions and manage the supply chain.

Goal of LMIS

 The goal of LMIS is to ensure availability of quality health commodities at health

facilities and community level round year.

The basic Motto of any LMIS are

 The Right Goods

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  In the Right Quantity

 In the Right Condition

 To the Right Place

 At the Right Time

 For the Right Cost

Overview of LMIS Unit

Implementing Web-based LMIS

 The information captured in the web-based LMIS mirrors the paper-based quarterly
reporting from the health facilities, but districts now generate updated logistics
information monthly as opposed to quarterly.

 The inventory management system at the district level is linked to the web-based LMIS
in such a way that once the storekeeper updates data in the inventory management
system, the information required in the web-based LMIS can be uploaded with the click
of a button.

 This saves the storekeeper from typing

 Information into the web-based LMIS, reducing the risk of inaccuracies.

 Linking the inventory management system to the LMIS has helped the LMD monitor the
stock levels in all 75 districts, and it can now supervise and guide districts on key issues
of inventory management.

 This process also helps maintain the practice of updating inventory data regularly in the
districts.

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  As part of the implementation, districts were supplied with networking accessories to
set up reliable high speed internet connections.

 Some DPHOs even contributed by installing Internet access at their own cost.

 Opportunity to learn about computers and the Internet.

 The district storekeepers received computer training, and most of them responded very
positively to the innovative approach of using an online logistics information system.

 It gave them and their co-workers the

 Because district storekeepers are frequently transferred, the flow of the quarterly LMIS
and monthly web-based

 LMIS reports is sometimes delayed. To improve reporting and strengthen the web-based
LMIS in the 75 DPHOs, the USAID|DELIVER PROJECT subcontracted with a private-
sector partner to provide training over a ten-month period.

 DPHO staff welcomed the support, and the effort resulted in 100 percent reporting from
the districts.

 In a few districts, monthly LMIS reporting can be delayed because of Internet outages;
when this happens; staff try to find other ways to report, sometimes using their own
mobile phones.

 Throughout the implementation, the LMD led the effort to create a well-functioning
LMIS, with technical support from JSI Research & Training Institute, Inc. and USAID
under the Logistics and Child Health Support Services Project.

 The Nepal Family Health Program (NFHP) and the USAID | DELIVER PROJECT have
continued to provide technical assistance to the LMD’s LMIS unit since 2001.

 Joint technical support visits by NFHP and the LMD to health facilities also help to
improve the LMIS, and the LMD and NFHP continue to provide logistics training for
existing staff and newly recruited storekeepers.

 Today, the LMIS is an integrated system, tracking 206 items at the district level,
including family planning, maternal and child health, vaccines, cold chain accessories,
and surgical and miscellaneous items from nine different programs are given next slide.
There are---

LMIS Includes Program and Regular Items

 Family Planning Program (five contraceptives

 Expanded Programme on Immunizations (eight vaccines plus immunological

agents)

 Malaria/Kala-Azar Program(five anti-malarial drugs)

 Tuberculosis (TB) Program (23 TB drugs as well as glass slides and sputum
containers)

 Control of Diarrheal Disease Program (oral rehydration salts and zinc Sulphate)

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  Acute Respiratory Infection Program (Cotrim Pediatric and Cotrim)

 Nutrition Program (vitamin A, iron tablets, and Albendazole)

 Leprosy Program (four leprosy drugs)

 Essential Drugs (56 standard plus other essentials drugs).

 At the central level, the LMIS unit at the LMD compiles the data, generates various
reports, and distributes them to different divisions at the Department of Health Services
and external donor partners.

 LMIS data is used extensively for key logistics decision making, such as forecasting,
procurement, and distribution of health commodities.

 At the national level, policymakers used LMIS data (stock outs of health commodities)
for indicators in the Nepal Health Sector Programme II, a plan that will guide the
country's health sector

 Improvement activities from 2010–2015.

 The plan includes activities to strengthen the inventory management system and the
LMIS.

 Reporting within the LMIS has improved significantly over the years. The percentage of
LMIS forms regularly submitted by health facilities on time has increased from 36
percent in 1996 to 96 percent in 2011 Both health facilities and districts are increasingly
using the LMIS data; districts use the data to monitor the fluctuation of stocks for supply
decisions, and health facilities use it to decide how much product to order from the
districts

Using Data to Support Decision making

 A strategic approach, good collaboration among the various levels and actors in the
supply chain, and strong commitment from the Government of Nepal have been key
components in the success of the LMIS.

 Even during a decade of Maoist-movement (1996–2006), support for the health sector
continued from both sides of the conflict.

 Access to timely and relevant logistics data enables coordinating bodies along the supply
chain to make the right decisions in support of product availability.

 Each year, the LMD conducts a regional-level logistics review meeting to discuss LMIS
reporting, stock outs, and other logistics-related activities, as well as the impact these
activities have on increasing reporting and reducing stock outs.

 In 2001, the LMIS unit created a logistics data bank by archiving all previous years’ LMIS
data.

 The data is compiled to show trends over time, which can provide powerful insights for
decision makers at the national level.

 The information is used by different program divisions for long-term forecasting and
quantification of health commodities on a semi-annual and annual basis.

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  It is also used extensively to monitor the stock situation for seven key commodities at
district and health facility levels.

 Using the LMIS, the LMIS unit and the LMD monitor the flow of commodities at the
national level, the RMSs monitor it at the district level, and the DPHOs monitor it at the
field level.

 The LMIS unit sends the monthly reporting status to all 75 districts and RMSs and sends
the quarterly feedback report to districts and regions.

 The most common reporting problem has been discrepancies in the quarterly opening
balance.

 When such a problem is identified, the LMIS unit notifies the supervisor and health
facility of the error, and staff provide on-the-job training at the facility to correct the
report.

Flow of LMIS Data

Units of LMD in Nepal

 Logistics Management Division/

 DOHS

 Regional Health Directorate (5)

 Regional Medical Stores (5)

 Central Store, Transit Store (2)

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  District Health Offices(75)

 Program Divisions/DOHS (5)

 External Donor Partners(USAID, DFID, KfW, UNFPA)

 District Clinics(33)

 Primary HealthCare Centers(185)

 Health Posts(697)

 Sub Health Posts (3130)

 District Hospital - NGOs (115)

 NFHP and its district staff assist in monitoring the LMIS but the system is mostly
operated by the government in the country’s more than 4,000 health facilities.

 NFHP and the USAID | DELIVER PROJECT staff help maintain the quality of reporting
and provide on-the-job training to new staff in the districts.

 While the MOHP is committed to supporting the LMIS and recognizes its value,
sustained long-term donor support is needed until the MOHP is able to fully absorb the
LMIS unit into the MOHP's structure and assume full management and funding
responsibility for the system. Options for the future include—

Options for the future include -

 Advocating with government to create civil service positions for the staff of the LMIS
unit (currently donor supported) Approaching other donors who can fund the LMIS unit.

 Advocating with government and donor partners to contract out the LMIS unit to the
private sector using development funds or other resources.

Key achievements
 The improvements in the LMIS and the addition of web-based reporting have led to
profound changes in the way information is used and shared throughout Nepal’s public
health supply chain.

 With commitment from the Government of Nepal and support from its partners, the
following results have been achieved:

 Nepal has a national LMIS producing reliable logistics data for decision making at all
levels and functions of the health supply chain, including forecasting, inventory
management, distribution, pipeline monitoring of key health commodities, and
prevention of stockouts.

 Policymakers accept LMIS data as credible and use it to make nationwide policy and
operational decisions.

 LMIS reporting has improved storage practices, reducing waste and expiry of
commodities.

 Improvements in LMIS made it possible to successfully introduce the demand-based

supply system (also known as the pull system) for essential drugs.

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  With the insertion of data elements like ASL, EOP, and Quantity to Order in the LMIS
form, the system can easily generate ASL and EOP for the health facilities and districts
and calculate the stock needed for resupply.

 The pull system has generated a consistent reduction of stock outs since its introduction
in 2005.

 At all levels of the government health system, managers are able to make supply
decisions based on accurate and timely logistics data generated by the LMIS.

 The system is used to establish actual quantity needed, and facilities and districts can
order supplies according to authorized stock level(ASL)and emergency order point
(EOP), reducing the incidents of excess stock and waste due to expiry.

 The MOHP now recognizes the LMIS as one of its main information systems, along with
the country’s health management information system.

 The LMIS has become a key information source, raising the level of visibility throughout
the supply chain. With a web-based LMIS, the center, regions, and districts are
empowered to make evidence-based logistics decisions, ultimately ensuring year-round
availability of key health commodities and essential drugs to the end user.

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 UNIT 2: PROCUREMENT, INVENTORY AND SUPPLY CHAIN MANAGEMENT
2.1: Procurement
2.1.1: Concept, definition, objectives and types of procurement.
• Adopt the word PROCUREMENT in preference to the word PURCHASING.
• It does not deal with a single action or process. Procurement covers the complete range
of events from the identification of a need for a good or service through to its disposal or
cessation
• Very similar to the term ‘supply management’.
What Is Procurement?
• In simple terms procurement means the purchase of goods or services.
• Procurement in this sense actually goes further in that the organization seeks to obtain
contracts to deliver public services to their local community and to the wide range of
public sector customers and users.
• “Procurement is the business management function that ensures identification,
sourcing, access and management of the external resources that an organization needs
or may need to fulfil its strategic objectives”
Considerations of Procurement:
• Speed
• Cost
• Quality
• Specific Project Constraints
• Risk
• Asset Ownership
• Financing
Procurement includes activities and events before and after the signing of a contract as well as
the general management activities;

 pre-contract activities such as planning, needs identification and analysis, and sourcing,

 post-contract activities such as contract management, supply chain management and

disposal, and

 General activities such as corporate governance, supplier relationship management, risk

management and regulatory compliance.

Procurement delivers a range of benefits. It not only seeks to reduce costs and to ensure supply,
it also supports strategic organizational objectives such as market expansion and product
innovation.

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 Seven core benefits of procurement:
1. Security of supply,
2. Lower costs,
3. Reduced risk,
4. Improved quality,
5. Greater added value,
6. Increased efficiency,
7. Innovation.
Procurement in Nepal:
• Under the GoN public procurement regulations, districts are involved in local
procurement of health commodities (Essential Drugs) necessary for the district.
• LMD with support from USAID | DELIVER PROJECT provided District Level Public
Procurement Training to 15 participants from Rukum, Jajarkot and Mugu districts.
• The training imparted knowledge and skill to the participants in order to make
procurement process timely, simple, easy, uniform and more transparent over time.
Indicators of Procurement
• District Procurement Plan
• Setting up of procurement committee (evaluation committee) in the district
• Forecasting and quantification (also have district followed quantification provided by
the center)
• Cost estimation of the health commodities
• Timely procurement
Procurement in Public Sector
Public sector organizations use procurement for contracts to achieve benefits such as increased
efficiency and cost savings (faster and cheaper) in government procurement and improved
transparency (to reduce corruption) in procurement services. E-procurement in the public
sector has seen rapid growth in recent years.
E-Procurement System
An e-procurement system manages tenders through a web site. This can be accessed anywhere
globally and has greatly improved the accessibility of tenders. An example is the System for
Acquisition Management (SAM), which on July 30, 2013 combined information from the former
Central Contractor Registration and Online Representations and Certifications Application
(ORCA), in the United States.
Types of Procurement:
• Single Procurement
• Stock Procurement

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 • Vendor Management Inventory
• Just In Time
• Just In Sequence
• Ship to Line

Direct VS Indirect Procurement:

TYPES

Direct procurement Indirect procurement

Raw material and Maintenance, repair, Capital goods

production goods and operating supplies and services

Quantity Large Low Low

Frequency High Relatively high Low

Value Industry specific Low High

FEATURES

Nature Operational Tactical Strategic

Crude oil
Crude oil in petroleum
Examples Lubricants, spare parts storage
industry
facilities

Public Procurement
• Government procurement
Public procurement generally is an important sector of the economy. In Europe, public
procurement accounts for 16.3% of the Community GDP.
• Green public procurement
In Green public procurement (GPP), contracting authorities and entities take
environmental issues into account when tendering for goods or services. The goal is to
reduce the impact of the procurement on human health and the environment.
Procurement Steps:
• Identification of Need.
• Supplier Identification.

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 • Supplier Communication.
• Negotiation.
• Supplier Liaison.
• Logistics Management.
• Tender notification.
Alternative Procurement Procedures
There are several alternatives to tendering which are available in formal procurement. One
system which has gained increasing momentum in the construction industry and among
developing economies is the Selection in planning process which enables project developers and
equipment purchasers to make significant changes to their requirements with relative ease. The
SIP process also enables vendors and contractors to respond with greater accuracy and
competitiveness as a result of the generally longer lead times they are afforded.
Procurement Frauds
Procurement fraud can be defined as dishonestly obtaining an advantage, avoiding an obligation
or causing a loss to public property or various means during procurement process by public
servants, contractors or any other person involved in the procurement. An example is the
kickback, whereby a dishonest agent of the supplier pays a dishonest agent of the purchaser to
select the supplier's bid, often at an inflated price.
Types of Procurement
1. Public Procurement
2. Private Procurement
3. Project Procurement :( Optional)
a. Public Sector Project Procurement, and
b. Private Sector Project Procurement
1. Public Procurement

 It is the process of acquiring goods and services for the operation of government and to
provide public services.

 It is carried out within a specific legal framework based on certain principles aimed at
making the fulfillment of public procurement requirements competitively available to
qualified firms and individuals in a transparent and nondiscriminatory manner based on
pre-established selection criteria.

 The goal of public procurement is to provide everything necessary for the operation of
government and, specifically, public services to the population within a country.

2. Private Procurement

 Is the process of acquiring goods and services to satisfy the needs of a particular private
entity (usually a business, for profit or not).

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  These are goods and services needed for
(i) the operation of the business or
(ii) the business to use in the process of production of goods and/or services they
provide to their customers

 For instance they are not always covered by national public procurement laws.
 primary example are goods such as stationary, furniture, office equipment, etc. needed
for a business to operate, and respecting the latter, are all the goods and services needed
to satisfy customer demands.
Differences:
1. The public sector is constrained by regulations
2. The public sector has more complex motivations and objectives
3. The public-sector stakeholder base is wider and includes those outside the buying
organization
4. The public sector faces more transparency
2.1.2: Principle of procurement
1. Plan and manage for great results

 Identify what you need and then plan how to get it. ›
 Set up a team with the right mix of skills and experience.
 Involve suppliers early – let them know what you want and keep talking.
 Take the time to understand the market and your effect on it. Be open to new ideas and
solutions.
 Choose the right process – proportional to the size, complexity and any risks involved.
 Encourage e-business (for example, tenders sent by email).
2. Be fair to all suppliers

 Create competition and encourage capable suppliers to respond.

 Treat all suppliers equally – we don’t discriminate (this is part of our international
obligations).

 Give suppliers a full and fair opportunity to compete.

 Make it easy for all suppliers (small to large) to do business with us.

 Be open to subcontracting opportunities in big projects.

 Clearly explain how you will assess suppliers’ proposals – so they know what to focus
on.

 Talk to unsuccessful suppliers so they can learn and know how to improve next time.
3. Get the right supplier

 Be clear about what you need and fair in how you assess suppliers – don’t string
suppliers along.

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  Choose the right supplier who can deliver what you need, at a fair price and on time.

 Build demanding, but fair and productive relationships with suppliers.

 Make it worthwhile for suppliers – encourage and reward them to deliver great results.

 Identify relevant risks and get the right person to manage them.

4. Get the best deal for everyone

 Get best value for money – account for all costs and benefits over the lifetime of the
goods or services.

 Make balanced decisions – consider the social, environmental and economic effects of
the deal.

 Encourage and be receptive to new ideas and ways of doing things – don’t be too
prescriptive.

 Take calculated risks and reward new ideas.

 Have clear performance measures – monitor and manage to make sure you get great
results.

 Work together with suppliers to make ongoing savings and improvements.

 It’s more than just agreeing the deal – be accountable for the results.

5. Play by the rules

 Be accountable, transparent and reasonable.

 Make sure everyone involved in the process acts responsibly, lawfully and with
integrity.

 Stay impartial – identify and manage conflicts of interest.

 Protect suppliers’ commercially sensitive information and intellectual property.

2.1.3: The scope of procurement and supply chain management
Scope of Procurement:

 The purpose of procurement is to meet the user's requirement

 To ensure that the correct goods and services are delivered to the correct person(s) at
the correct time in the most effective way.
 Better value for money

Supply chain management

• Supply Chain:
• the sequence of organizations - their facilities, functions, and activities - that are
involved in producing and delivering a product or service

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 • Sometimes referred to as value chains
• Value is added as goods and services progress through the chain.

 Logistics:
• The part of a supply chain involved with the forward and reverse flow of goods,
services, cash, and information.

Concept of Supply Chain Management

• The concept of Supply Chain Management (SCM) is based on two core ideas:
• The first is that practically every product that reaches an end user represents the
cumulative effort of multiple organizations. These organizations are referred to
collectively as the supply chain.
• The second idea is that while supply chains have existed for a long time, most
organizations have only paid attention to what was happening within their “four walls.”
Few businesses understood, much less managed, the entire chain of activities that
ultimately delivered products to the final customer. The result was disorganized and often
ineffective supply chains.
Supply Chain Management
• Supply Chain Management (SCM)
• The strategic coordination of business functions within a business organization
and throughout its supply chain for the purpose of integrating supply and
demand management
• Supply:
• From the beginning of the chain to the internal operations of the
organization
• Demand:

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 • From the organization's output delivery to its immediate customer to the
final customer in the chain
Why so much interest in SCM?
• As manufacturing becomes more efficient (or is outsourced), companies look for ways to
reduce costs.
• Several significant success stories. Efficient SCM gives Walmart & others an important
edge.
• Web-based models for supply chains:
• Online retailers
• B2B business models.
Goal and Key SCM Issues
Goal: is to match supply to demand as effectively and efficiently as possible
Key issues:

 Determining appropriate levels of outsourcing.

 Managing procurement
 Managing suppliers
 Managing customer relationships
 Being able to quickly identify problems and respond to them
 Managing risk
Flow Management
Three types of flow management

 Product and service flow

o Involves movement of goods and services from suppliers to customers as well as
handling customer service needs and product returns
 Information flow
o Involves sharing forecasts and sales data, transmitting orders, tracking
shipments, and updating order status
 Financial flow
o Involves credit terms, payments, and consignment and title ownership
arrangements
Supply Chain Risks

 Supply chain disruption

o Natural disasters
o Supplier problems
 Quality issues
o Another form of disruption that may disrupt supplies and lead to product recalls,
liability claims, and negative publicity.
 Loss of control of sensitive information
o If suppliers divulge sensitive information to competitors, it can weaken a firm’s
competitive position.

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 Risk Management

 Involves identifying risks, assessing their likelihood of occurring and their potential
impact and then developing strategies for addressing those risks.
o Strategies for addressing risk include:
• Risk avoidance
• Risk reduction
• Risk sharing

 Key elements of successful risk management include:

o Know your suppliers
o Provide supply chain visibility
o Develop event-response capability
Global Supply Chains
• Product design often uses inputs from around the world.
• Some manufacturing and service activities are outsourced to countries where labor
and/or materials costs are lower.
• Products are sold globally
Complexities

 Language and cultural differences.

 Currency fluctuations
 Political instability
 Increasing transportation costs and lead times
 Increased need for trust amongst supply chain partners
Management Responsibility: Tactical and Operational

Tactical Operational
• Forecasting • Scheduling
• Sourcing • Receiving
• Operations Planning • Transforming
• Managing inventory • Order fulfilling
• Transportation planning • Managing inventory
• Collaborating • Shipping
• Information sharing
• Controlling

Supplier Management
• Vendor analysis
• Evaluating the sources of supply in terms of price, quality, reputation, and
service
• Supplier audit

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 • A means of keeping current on suppliers’ production (or service) capabilities,
quality and delivery problems and resolutions, and performance on other
criteria
• Supplier certification
• Involves a detailed examination of a supplier’s policies and capabilities
• The process verifies the supplier meets or exceeds the requirements of a buyer
Supplier Relationship Management
• Type of relationship is often governed by the duration of the trading relationship
• Short-term
• Oftentimes involves competitive bidding
• Minimal interaction
• Medium-term
• Often involves an ongoing relationship
• Long-term
• Often involves greater cooperation that evolves into a partnership
Choosing Suppliers
• Quality and quality assurance
• Procedures for quality assurance and quality control
• Flexibility
• For changes in delivery schedules, quantity, product or service changes
• Location
• Nearby?
• Price
• Competitiveness, willingness to negotiate, cooperate to reduce prices
• Reputation and Financial Stability
• Supplier reputation, its financial stability
• Lead times and on-time delivery
• Procedures to assure on-time delivery and problem correction
• Other accounts
• Dependence on other customers and their priority
Supplier Partnerships
• More organizations are seeking to establish partnerships with others in their supply
chain:

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 • Fewer suppliers, long term relationships, sharing of information (forecasts, sales
data, problem alerts), cooperation in planning
• Benefits:
• Improved operations: higher quality, increased delivery speed and reliability,
lower inventories, lower costs, higher profits. Higher supplier flexibility in
accepting changes (delivery schedules, quality, quantity), suppliers can help in
identifying problems and offer suggestions

Aspect Adversary Partner

Number of Many; play one against the others One or a few

suppliers

Length of May be brief Long-term

relationship

Low price Major consideration Moderately important

Reliability May not be high High

Openness Low High

Quality May be unreliable; buyer inspects At the source; vendor certified

Volume of May be low due to many suppliers High

business

Flexibility Relatively low Relatively high

Location Widely dispersed Nearness is important for short lead

time and quick service

Strategic SCM
• Information technology
• Integrating systems and sharing information (forecasts, inventory status,
shipments etc.) throughout the SC.
• Strategic partnerships
• Choice of partners, level of partnership.
• Distribution strategy

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 • Centralized or decentralized distribution. In-house distribution or third-party
logistics.
• Uncertainty and risk reduction
• Identifying potential risks and deciding on acceptable risk level.
• Capacity planning
• Assessing long term capacity needs and the degree of flexibility
• Products and services
• New products and services selection and design.
Logistics

 The part of the SC involved with the forward and reverse flow of goods, services, cash,
and information.
Logistics Management

 Management of :
o Inbound and outbound transportation
o Material handling
o Warehousing
o Inventory
o order fulfillment and distribution
o Third party logistics
o Reverse logistics (return from customers)
Inventory issues in SCM

 Inventory location
o Centralized inventories

 Lower overall inventory, lower cost, lower stock-out risk

o Decentralized inventories

 Faster delivery, lower shipping cost

 Inventory velocity
o The speed at which goods move through a supply chain
o The greater the velocity the lower the holding cost and the faster orders are
fulfilled and goods are turned into cash.
 The bullwhip effect
o Inventory oscillations that become increasingly larger looking backward
through the supply chain
Creating an Effective Supply Chain
• It begins with strategic sourcing
• Analyzing the procurement process to lower costs by reducing waste and non-
value-added activities, increase profits, reduce risks, and improve supplier
performance

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 • There must be
• Trust
• Effective communication
• Information velocity
• Supply chain visibility
• Event management capability
• Performance metrics
Trade-Offs
1. Lot-size-inventory trade-off
• Large lot sizes yield benefits in terms of quantity discounts and lower annual
setup costs, but it increases the amount of safety stock (and inventory carrying
costs) carried by suppliers
2. Inventory-transportation cost trade-off
• Suppliers prefer to ship full truckloads instead of partial loads to spread
shipping costs over as many units as possible. This leads to greater holding costs
for customers
• Cross-docking
• A technique whereby goods arriving at a warehouse from a supplier are
unloaded from the suppliers truck and loaded onto outbound truck,
thereby avoiding warehouse storage
3. Lead time-transportation costs trade-off
• Suppliers like to ship in full loads, but waiting for sufficient orders and/or
production to achieve a full load may increase lead time
4. Product variety-inventory trade-off
• Greater product variety usually means smaller lot sizes and higher setup costs,
as well as higher transportation and inventory management costs
• Delayed differentiation
• Production of standard components and subassemblies which are held
until late in the process to add differentiating features
5. Cost-customer service trade-off
• Producing and shipping in large lots reduces costs, but increases lead time
• Disintermediation
• Reducing one or more steps in a supply chain by cutting out one or more
intermediaries

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 Order fulfillment
Order fulfillment refers to the processes involved in responding to customer orders.

 Engineer-to-Order (ETO)
o Products are designed and built according to customer specifications. This
approach is frequently used for large-scale construction projects, custom
homebuilding, home remodeling, and for products made in job shops.
 Make-to-Order (MTO)
o A standard product design is used, but production of the final product is linked
to the final customer's specifications. This approach is used by aircraft
manufacturers such as Boeing. Fulfillment time is generally less than with ETO
fulfillment, but still fairly long.
 Assemble-to-Order (ATO)
o Products are assembled to customer specifications from a stock of standard and
modular components. Computer manufacturers such as Dell operate using this
approach. Fulfillment times are fairly short, often a week or less.
 Make-to-Stock (MTS)
o Production is based on a forecast, and products are sold to the customer from
finished goods stock. This approach is used in department stores and
supermarkets. The order fulfillment time is immediate.

Small Businesses
• Small businesses do not always give adequate attention to their supply chains.
• Three aspects of supply chain management that are often of concern to small businesses
are:
1. Inventory management
2. Reducing risks
3. International trade
Supply Chain Performance Measures
• Financial
• Return on assets
• Cost
• Cash flow
• Profits
• Suppliers
• Quality
• On-time delivery
• Cooperation
• Flexibility

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 • Operations
• Productivity
• Quality
• Inventory
• Average value
• Turnover
• Weeks of supply
• Order fulfillment
• Order accuracy
• Time to fill orders
• % of orders delivered on time
• Customers
• Customer satisfaction
• % of customer complaints
Managing Returns
• Products are returned to companies or third-party handlers for a variety of reasons, and
in a variety of conditions. Among them are the following:
• Defective products
• Recalled products
• outdated products
• Unsold products returned from retailers
• Parts replaced in the field
• Items for recycling
• Waste

 In the US, the annual value of returns is estimated to be in the neighborhood of $100
billion

 Reverse logistics is the process of physically transporting returned items.

o This involves either retrieving items from the field or moving items from the
point of return to a facility where they will be inspected and sorted and then
transporting to their final destination.

 Two key elements of managing returns

o Gatekeeping oversees the acceptance of returned goods with the intent of
reducing the cost of returns by screening returns at the point of entry into the

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 system and refusing to accept goods that should not be returned or goods that
are returned to the wrong destination.
o Avoidance refers to finding ways to minimize the number of items that are
returned.
Trends in SCM
Trends affecting supply chain design and management:

 Measuring supply chain performance

o Incorporating economic metrics into decisions (e.g., inventory velocity,
inventory turnover)
 “Greening” the supply chain
o Redesigning products and services to reduce pollution from transportation,
choosing “green” suppliers, managing returns, end-of-life programs (e.g.,
appliances)
 Re-evaluating outsourcing
o Reconsidering outsourcing due to long lead time, increased transportation costs,
language, culture, job loss, control loss, lower productivity, loss of ability to
perform work internally, loss of business knowledge, management efforts.
 Integrating IT
o Real time data to enhance strategic planning, control costs, measure quality and
productivity, respond quickly to problems, improve SC operations
 Managing risks
o Identifying risks, assessing likelihood of occurrence, potential impacts,
prioritizing, developing management strategies (avoidance, reduction,
transference).
 Adopting lean principles
o Eliminating non value-added processes, using “pull” systems to improve product
flow, using fewer suppliers, continuous improvement.

Operations Strategy
• Effective supply chains are necessary for organizational success
• Requires integration of all aspects of the chain
• Supplier relationships are a critical component of supply chain strategy
• Lean operations to improve supply chain success
• Future Supply Chains

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 Key Points
• Supply chains are a vital part of every business organization and need to be managed
effectively to achieve a balance of supply and demand.
• There are a number of trade-offs to be made by supply chain managers.
• Effective supply chains involve trust, communication, a rapid, two-way flow of
information, visibility, and event-response capability.
• Among important trends in supply chain management are measuring ROI, “greening”
the supply chain, reevaluating outsourcing, integrating IT, managing risks, and adopting
lean principles.

2.1.4: Definition and importance of Quotation

Quotation
• A formal statement of promise (submitted usually in response to a request) by potential
supplier to supply the goods or services required by a buyer, at specified prices, and
within a specified period.
• A quotation may also contain terms of sale and payment, and warranties.
• Acceptance of quotation by the buyer constitutes an agreement binding on both parties.
• The bid and asked price cited for the sale or purchase of a commodity or security.
• The RFQ process should be one of the most common operations carried out by every
purchasing and supply manager on a daily basis.
• However, even as the most common operation, it can still be run many different ways.
Whichever way you do it, the RFQ is the most powerful method to get quick cost savings.
Difference between RFQs and RFPs

• The RFQ process can be divided into four steps: preparation, processing, awarding, and
closing.

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 1. Preparation: most important part of the process, keep your final goal in mind, prepare the
documentation
Important RFQ Documents
- Invitation and description
- General terms and conditions
- Pricing template
- Pre-qualification requirements
- Awarding selection criteria
2. Management: treat all participants equally, Share the same information with everyone,
against business ethics to leak price information or other supplier-specific info to other bidders
3. Awarding; second most important step, decide with whom you are going to deal, internal
auditors concern, useful to have evidence available
4. Closing; set a meeting for closing the deal and signing the contract
Importance:
a. To develop new business relations so that they can gain more benefit in future
b. can provide important pieces of evidence
c. Gives more informed choices

2.2: Introduction to public procurement

2.2.1: Scope and nature of public procurement

“Procurement is the act of obtaining or buying goods and services. The process includes
preparation and processing of a demand as well as the end receipt and approval of payment. It
often involves

(1) Purchase planning,

(2) Standards determination,

(3) Specifications development,

(4) Supplier research and selection,

(5) Value analysis,

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 (6) Financing,

(7) Price negotiation,

(8) Making the purchase,

(9) supply contract administration,

(10) Inventory control and stores, and

(11) Disposals and other related functions

2.2.2: Meaning of public procurement

 It is the process of acquiring goods and services for the operation of government and to
provide public services.

 It is carried out within a specific legal framework based on certain principles aimed at
making the fulfillment of public procurement requirements competitively available to
qualified firms and individuals in a transparent and nondiscriminatory manner based on
pre-established selection criteria.

 The goal of public procurement is to provide everything necessary for the operation of
government and, specifically, public services to the population within a country.

2.2.3: Difference between public and private procurement

There are four fundamental differences between the sectors,

1. The public sector is constrained by regulations

This is perhaps the most obvious, although we might argue it is not actually the most significant.
In virtually every country, public procurement is defined and constrained in some sense by
legislation. That may be at local, regional, national or international level, or some combination of
those. In the UK, we are bound by the UK regulations, which are taken from the EU directives.
Even beyond that, wider regulations such as the World Trade Organisation can come into play as
well. Clearly, this restricts how procurement is executed to a considerable degree. The private
sector is still constrained to some extent – for example, laws on equality or bribery might come
into play in procurement activities – but generally, there is much more freedom from legislation.

2. The public sector has more complex motivations and objectives

The public sector now expects procurement to address several issues beyond simple value for
money or basic supply. For example, “social value” is now enshrined in legislation in the UK, and
there are policy goals such as supporting smaller firms, or minority owned firms (e.g. in the US
and South Africa), driving employment or education, supporting equalities … the list seems
almost endless today. Now while some private sector firms might decide to look at similar areas
(particularly if the firm wants to win government contracts itself), it is unusual to find the same
focus on these wider issues in a private sector organisation.

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 3. The public-sector stakeholder base is wider and includes those outside the buying
organization
If we consider the largest and most significant public sector expenditure areas, many are of great
interest, significance and importance to those beyond the organisation doing the buying itself. So,
whether that is construction of new railway lines, buying expensive drugs or hospital equipment,
providing social care, waste disposal or employment services, many citizens outside the public
body itself have a great interest in what is being bought and the supplier performance. Even in an
area like defence, where the citizen is less involved, the stakeholder picture for major defence
equipment is incredibly complex, ranging through many technical experts, foreign allies, defence
analysts and politicians. Now there are complex spend categories in many private sector firms,
but few that have 10 million stakeholders.

4. The public sector faces more transparency

We suspect there are just as many major IT project disasters or other failures in the private sector
as the public, but we just don’t tend to hear about them. The public sector faces both legislation
that promotes transparency, and the general desire of the public and media to understand how
“their” money is being spent. The same simply does not apply to procurement activities in
Unilever, Shell or Ford.
So, our hypothesis is that all the practical and operational differences we observe between the
two sectors flow from these four fundamentals. For instance, if someone argues that the biggest
difference is “you can’t negotiate in the public sector” (not really true, we should stress), you can
trace any difference back to that legislative issue, plus a touch of the “transparency” point.

2.2.4: The Goal of government and procurement objectives

Goals of Government
Public Security, Development, Just, Regulation etc….
 Rule of Law
 Good governance
 Fairness
 Equality
 Efficiency
 Transparency
 Accountability
 Economy
 Cost-effective

Government Procurement Objectives

 To make the procedures, processes and decisions relating to public procurement much
more open, transparent, objective and reliable,

 To obtain the maximum returns of public expenditures in an economical and rational

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 o manner by promoting competition, fairness, honesty, accountability and
reliability in
o public procurement processes, and;

 To ensure good governance by enhancing the managerial capacity of procurement of

o public entities in procuring, or causing to be procured, construction work and
procuring goods, consultancy services and other services by such entities and by
ensuring the equal opportunity for producers, sellers, suppliers, construction
entrepreneurs or service providers to participate in public procurement
processes without any discrimination.
2.3: Procurement and process
Procurement management:

 Procurement management includes the following processes for acquiring goods and
services from outside the organization:
1. Procurement planning: determining what to procure and when.
2. Solicitation planning: documenting product requirements and identifying
potential sources.
3. Solicitation: obtaining quotations, bids, offers, or proposals as appropriate.
4. Source selection: choosing from among potential vendors.
5. Contract administration: managing the relationship with the vendor.
6. Contract close-out: completion and settlement of the contract.

• For example, after procurement planning the key milestone is the “make or buy decision”.
This will determine if further procurement management processes are required.

Procurement Planning:

 Procurement planning involves identifying which project needs can be best met by using
products or services outside the organization. It includes deciding:
– Whether to procure.
– How to procure.
– What to procure.

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 – How much to procure.
– When to procure

 The inputs needed for procurement planning include:

– The project/program scope statement.
– Product description.
– Market conditions.
– Constraints and assumptions.

 However, it is also essential to know exactly why you want to procure goods or services.
Tool and Techniques:

 Procurement management will often incorporate the following:

– Make-or-buy analysis: determining whether a particular product or service
should be made or performed inside the organization or purchased from someone
else. Often involves financial analysis.
– Experts, both internal and external, are valuable assets in procurement decisions.
• Internal experts are particularly useful in providing knowledge of
organizational and personnel issues.
• External experts can provide expert judgement, especially with regard to
vendors and technology issues.

Solicitation Planning

 Solicitation planning involves preparing of the documents needed for requesting bids
(solicitation), and determining the evaluation criteria for the award of a contract.
Common documents used in this process are:
– Request for Proposals: used to solicit proposals from prospective sellers where
there are several ways to meet the sellers’ needs.
– Requests for Quotes: used to solicit quotes for well-defined procurements.
– Invitations for bid or negotiation and initial contractor responses are also
part of solicitation planning.

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 Outline for a Request for Proposal (RFP)

I. Purpose of RFP
II. Organization’s Background
III. Basic Requirements
IV. Hardware and Software Environment
V. Description of RFP Process
VI. Statement of Work and Schedule Information
VII. Possible Appendices
A. Current System Overview
B. System Requirements
C. Volume and Size Data
D. Required Contents of Vendor’s Response to RFP
E. Sample Contract
Source Selection

 Once buyers receive proposals, they must select a vendor or decide to cancel the
procurement. Source selection involves:
– Evaluating bidders’ proposals.
– Choosing the best one.
– Negotiating the contract.
– Awarding the contract.

 It is highly recommended that buyers use formal evaluation procedures for selecting
vendors.
 Buyers often create a “short list”.

Sample Proposal Evaluation Sheet

 The following template could be used by a project team to help create a short list of the
best three proposals.

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 Detail criteria for selection of source
• After developing a short list of possible sellers, organizations will often undertake more
detailed evaluation.

• Contracts are legal relationships, and are subject to the contract law in the country
where the project is conducted, and in the case of international projects, the country of
supply.
• Contract management ensures that the seller’s performance meets contractual
requirements.
Examples of Contract Management
• A manufacturer and a retailer sign an agreement enabling the retailer to sell the
manufacturer's products. The contract management team must ensure the products reach
the retailers and that the retailers have the tools they need to sell the products.
Contract Management Process:

Contract Close-out

 Contract close-out is the final project procurement management process. It includes:

– Product verification to determine if all work was completed correctly and
satisfactorily.

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 – Administrative activities to update records to reflect final results.
– Archiving information for future use.

 Procurement audits are often undertaken during contract close-out to identify lessons
learned in the procurement process.
 The following guidelines can help can assist in preparing proposals, contracts and
administrative procedures:
– Use checklists and templates where appropriate.
– Evaluate risks by reference to suggested contract provisions where appropriate.
– All major proposals and contracts, and contracts with questionable provisions,
should be reviewed by a contract law expert.
– Appropriate pricing and/or insuring of risk under the contract.
– Periodic review, improvement and updating of contract preparation and
administration procedures
2.4: Public procurement method
Introduction
Procurement is the act of obtaining or buying goods and services. The process includes
preparation and processing of a demand as well as the end receipt and approval of payment. It
often involves
1. Purchase planning,
2. Standards determination,
3. Specifications development,
4. Supplier research and selection,
5. Value analysis,
6. Financing,
7. Price negotiation,
8. Making the purchase,
9. Supply contract administration,
10. Inventory control and stores, and
11. Disposals and other related functions.
The process of procurement is often part of a company's strategy because the ability to purchase
certain materials will determine if operations will continue.
2.4.1: Selection of Procurement method

 Procurement methods are the procedures used by the procuring entity to acquire goods,
services and works.

 These methods can be competitive and non-competitive.

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  There’s a preference for using competitive methods of procurement given that they tend
to promote transparency, economy and efficiency, and limit favoritism.
Public Procurement:

 Public procurement is the procurement of goods, services or constructions on behalf of a

public authority, such as a government agency.

 Government procurement regulations normally cover all public works, services and
supply contracts entered into by a public authority.
2.4.2: Open Method

 Open tendering is shorthand for competitive bidding.

 It allows companies to bid on goods in an open competition or open solicitation manner.

 Open tendering requirements call for the company to:

1. Advertise locally
2. Have unbiased and coherent technical specifications
3. Have objective evaluation measures
4. Be open to all qualified bidders
5. Be granted to the least cost provider sans contract negotiations

 The open tendering method of procurement encourages effective competition to obtain

goods with an emphasis on the value for money.
 There are course also disadvantages to this kind of procurement method including:
a. Complex requirements are typically not suited for this method
b. The timeline for needing the goods
c. Complications in defining the exact needs of the requirement by the procuring
company
2.4.2: Restricted Method

 Restricted tendering only places a limit on the amount of request for tenders that can be
sent by a supplier or service provider.

 Because of this selective process, restricted tendering is also sometimes referred to

as selective tendering.

 Like open tendering, restricted tendering is considered a competitive procurement

method, however, the competition is limited to agencies that are invited by the procuring
team.

 The procuring entity should establish a set of guidelines to use when selecting the
suppliers and service providers that will be on the invitation list.

 Randomized selections will not bode well for procuring.

 This method is selective to find the best-suited and most qualified agencies to procure
goods and services from.

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  It’s also employed as a way for the procuring team to save time and money during the
selection process.
2.4.3: Request for Proposal

 Request for Proposal is a term that is used all across the business world.

 Social media managers receive RFP’s from potential clients all the time when a client is
seeking a new manager of their venture.

 In the procurement world, a RFP is a method used when suppliers or service providers
are proposing their good or service to a procurement team for review.

 Understanding the in’s and out’s of quality service management is key to winning your
bid.

 The agencies writing the RFP’s should submit a two-envelope proposal to the
procurement manager.

 The two-envelope process allows the procurers’ to review the proposal through and
without knowing the financial component.

 The financial proposal is sealed in the second envelope and should only be opened after
the content of the first-envelope proposal is approved or rejected.
2.4.3: Request for Quotation

 This procurement method is used for small-valued goods or services.

 The procurement entity selects a minimum of three suppliers or service providers that
they wish to get quotes from.

 A comparison of quotes is analyzed and the best selection determined by requirement

compliance is chosen.

 This procurement method is used for small-valued goods or services.

 The procurement entity selects a minimum of three suppliers or service providers that
they wish to get quotes from.

 A comparison of quotes is analyzed and the best selection determined by requirement

compliance is chosen.
2.4.4: Micro-procurement
The Micro- Procurement option is one of the methods of procurement. Micro-Purchasing falls
under informal procurement process.
Micro-purchases comprise a subset of small purchase procedures, which are relatively simple and
informal methods for acquiring products and services that do not cost more than the Simplified
Acquisition Threshold.
Purchase orders may be awarded without soliciting any competitive quotations if the Program
operator considers the cost (s) to be reasonable.
2.4.5: Direct Procurement, Community purchase

 Direct procurement is the act of acquiring raw materials and goods for production.

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  These purchases are generally done in large quantities, acquired from a pool of suppliers
at the best possible cost, quality and reliability.

 These purchases are made frequently and are necessary for key business practices.

 If direct procurement stops functioning or encounters problems, companies are no longer

able to manufacture their product and create revenue.

Provisions for Direct Procurement (Article 41; Rule 85, 86)

Notwithstanding anything contained elsewhere in the Act, goods or consultancy services or
other services may be procured or construction work effected by means of direct procurement
in the following circumstances:

a. Miscellaneous procurement work (expendable items or capital goods or consulting or other

services) up to a value of NRs. 150,000 by obtaining Quotation or Proposal from Supplier,
Consultant, or Service Provider in the Standing List;

b. Only one supplier or construction entrepreneur or consultant or service providerhas the

technical capacity or capability to fulfil the procurement requirements;

c. Only one supplier has the exclusive right to supply the goods to be procured andthere is no
other suitable alternative.

d. In such situation, such proprietary goods may be procured through the solesupplier or its
authorized distributor or authorized agent.

e. While procuring directly in this manner, it may be done by asking for a quotation or proposal
from a supplier or service provider in the standing list of the public entity.

f. In case additional goods or services of proprietary nature are to be procured from the original
supplier or consultant or service provider after it is established that if there is a change of
supplier or consultant or service provider to replace or extend the existing goods or services or
spare parts of installations, it will be difficult to replace or extend the existing goods or services
in the public entity; such proprietary goods may be purchased directly for up to 30 percent of
the original value by obtaining the approval of a superior authority.

g. In case it is necessary to procure essential construction works, goods, consultancy services,

or other services within the threshold as prescribed, which were not included in the initial
contract because of unforeseeable reasons and have become necessary since the separation of
such works, goods or services from the initial contract would be difficult for technical or
economic reasons, or,

h. The service of a particular consultant with any unique qualification is immediately required
for the concerned task or it is indispensable to obtain service from the then consultant;

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 UNIT 3: INVENTORY MANAGEMENT SUPPLY CHAIN
3.1: Inventory management supply chain

3.1.1: Definition of Inventory, Vendor or Supplier

Definition of Inventory

Inventory is material that the firm obtains in advance of need, holds until it is needed, and then
used, consumes, incorporates into a product, sells, or otherwise disposes it off. A business
inventory is temporary in nature. Inventory is the raw materials, component parts, work-in-
process, or finished products that are held at a location in the supply chain. It is purchased to be
re-sold at a profit. A company might purchase finished goods, or materials to be manufactured
into goods. Both are essential elements of the profit-making processes of the business or
finished products that are held at a

Inventory:

Inventory or stock refers to the goods and materials that a business holds for the ultimate purpose
of resale (or repair).

Inventory Management:

Inventory management is a science primarily about specifying the shape and placement of
stocked goods. It is required at different locations within a facility or within many locations of a
supply network to precede the regular and planned course of production and stock of materials.

Reasons for keeping an inventory

Five basic reasons for keeping an inventory:

Time - The time lags present in the supply chain, from supplier to user at every stage, requires
that you maintain certain amounts of inventory to use in this lead time. However, in practice,
inventory is to be maintained for consumption during 'variations in lead time'. Lead time itself
can be addressed by ordering that many days in advance.

Seasonal Demand: demands varies periodically, but producer's capacity is fixed. This can lead
to stock accumulation, consider for example how goods consumed only in holidays can lead to
accumulation of large stocks on the anticipation of future consumption.

Uncertainty: Inventories are maintained as buffers to meet uncertainties in demand, supply and
movements of goods.

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 Economies of scale: Ideal condition of "one unit at a time at a place where a user needs it, when
he needs it" principle tends to incur lots of costs in terms of logistics. So bulk buying, movement
and storing brings in economies of scale, thus inventory.

Appreciation in Value: In some situations, some stock gains the required value when it is kept
for some time to allow it reach the desired standard for consumption, or for production. For
example; beer in the brewing industry.

Definition of Vendor

A Vendor is someone who purchases products from manufacturers or distributors and sells
them to the customer. As the last person involved in the process of manufacturing and selling
goods, they sell goods directly to the ultimate customer. So, they have frequent interaction with
their clients and can maintain a good relationship with them.

Vendor Managed Inventory

 Vendor Managed Inventory (VMI) is a procurement process where the manufacturer is

responsible for managing the inventory of the distributor or retailer.
 One of the most popular business models for inventory management.
 Within the usual procurement business model, when a distributor or retailer requires a
product, they place an order with the manufacturer. The distributor has total control of
the size and delivery times of the order.
 Under the Vendor Managed Inventory process the manufacturer and distributor are
linked via EDI or a secure internet connection. The manufacturer is aware of the retailers
or distributor’s stock levels and point of sales figures. This is usually done by linking the
companies ERP (Enterprise Resource Planning) systems together. The manufacturer
creates the orders and maintains the distributor’s inventories to agreed levels.

Definition of Supplier

The supplier is defined as a business person or entity, who makes goods and services available
to another entity. He provides goods and services, needed by the entities in carrying on
business.

As the supplier is the major source of inputs such as materials, tools, etc. in the business, he is an
important link in the supply chain. He or she provides goods to manufacturers, in large
quantities.

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 Comparison Chart

BASIS FOR
VENDOR SUPPLIER
COMPARISON

Meaning Vendor is an individual or entity, who Supplier is the one whose work is to
sells goods and services for a price to provide the good or service required by
the customers. the business.

Business B2C B2B

Relationship

Supply chain link Last First

Objective To sell the goods to the final To make the goods available to the people
consumer. who need it.

Purpose Use Resale

Quantity Small Bulk

provided

Key Differences between Vendor and Supplier

 The person or entity, who sells goods or services in exchange for money to the customer,
is called Vendor. The supplier is an individual or business entity, who is the source of
products and services to the company.
 We use the term vendor, for business to consumer, sales relationship. On the other hand,
when the sales relationship is business to business, we use the term supplier.
 Supply chain goes like this, Supplier>Manufacturer>Distributor>Vendor>Customer. So,
the supplier is the first link of the supply chain whereas vendor is the second last person
involved in the chain.
 Supplier aims at providing goods and services to the business entity who need it. As
against this, vendor aims at selling the products to the ultimate consumer.

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  Supplier sells goods to businesses for the purpose of resale. Conversely, Vendors sell
goods to the customers for using purposes.
 In general, supplier supplies a specific type of goods to manufacturers in bulk quantities.
Unlike vendor, who keeps a wide variety of goods and provides the end user in small
lots.
 Both supplier and vendor play the role of an intermediary in the supply chain.
 The major difference between vendor and supplier lies in the purpose of sale, i.e. when
the goods are sold by the vendor to another party for the purpose of resale, a vendor will
be called as a supplier. Likewise, when the supplier supplies goods directly to the final
consumer, he is called as a vendor.

Inventory Management

 Inventories are a major component of any logistics system and as such require to be
planned, managed and controlled in order to achieve the basic aims of:-
o Minimizing costs at acceptable levels of investment.
o Providing the desired levels of customer service.
 The major responsibility of inventory management is the management of materials and
materials systems throughout the defined acquisition and supply chain from
procurement to consumption point.

3.1.2: Principles of Inventory Management

There five key principles of inventory management:

1. Demand forecasting,
2. Warehouse flow,
3. Inventory turns/stock rotation,
4. Cycle counting and
5. Process auditing.

1. Demand forecasting:

 Demand forecasting essentially involves asserting the expected level of demand

during the period under consideration.
 Sales are functions of demand. Likewise, even cost of production depends upon
demand.
 Production of any commodity requires time and resources.

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  In order to plan the level of production and make arrangements for the
resources to be consumed, it is important to estimate future demand.

Stages in forecasting demand

 Specification of objectives.
 Selection of appropriate technique.
 Collection of appropriate data.
 Estimation and interpretation of results.
 Evaluation of the forecasts.

Levels of forecasting

 Demand projections may not be percent correct/ accurate, more so when the
scope of demand forecast is wide
 Different levels of demand forecast may be attempted by business firms.

2. Warehouse Flow:

 ‘A warehouse is a planned space for the storage and handling of goods and
material.
 In general, warehouses are focal points for product and information flow
between sources of supply and beneficiaries. However, in humanitarian supply
chains, warehouses vary greatly in terms of their role and their characteristics.

Procedures of Warehouse

 The procedures will normally provide the step by step guidance on how to manage each
aspect of warehousing and may cover:
 Receiving and issuing of supplies;
 Quality control or verification;
 Storage of goods;
 How to control stock movement (stock control);
 Documentation flow;
 How to detect and deal with stock losses;
 How rejected material will be managed; and
 How to deal with unwanted material, obsolete and scrap, disposal.

Basic Principles of Warehouse

a. Planning inbound delivery procedures.

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 b. Storage formalities e.g:
 Location management
 Inventory control
 Occupational health and safety
c. Outbound delivery procedures.

3. Inventory Turnover/Stock rotation:

 The Inventory turnover is a measure of the number of times inventory is sold or

used in a time period such as a year.
 The equation for inventory turnover equals the cost of goods sold or net
sales divided by the average inventory.
 Inventory turnover is also known as inventory turns, merchandise
turnover, stockturn, stock turns, turns, and stock turnover.
 A low turnover rate may point to overstocking, obsolescence, or deficiencies in the
product line or marketing effort

4. Cycle Counting

 It is a popular inventory counting solution that allows businesses to count a number

of items in a number of areas within the warehouse without having to count the
entire inventory.
 Cycle counting is a sampling technique where count of a certain number of items
infers the count for the whole warehouse. This sampling method is used by pollsters
every day where they measure the opinion of a small number of the people and infer
that is the opinion of the population.

5. Process Auditing

 Proactive error source identification starts with process audits.

 One of the cornerstone principles of inventory management is to audit early and
often.
 Process audits should occur at each transactional step, from receiving to shipping
and all inventory transactions in between.

Inventory control

Inventory control is the means by which materials of the correct quality and in correct quantity
are made available as and when required with due regard to economic in storage and ordering
cost. Hear the desired level of inventory can neither be high or low because high level inventory

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 will lead to increase in carrying cost while low level of inventory will lead to increase in
ordering cost

The activities of inventory control normally include the following:

 Determination of the limits of the inventories to be held.

 Determination of inventory policies.

 Selling out of investments pattern and its regulations as per individual and collective
requirements.

 Follow up to examine the work of inventory policy and effect change as and when
needed.

Scope of inventory control:

Objectives of inventory control:

 To ensure smooth flow of stock.

 To provide for required quality of materials.

 To control investments in stock.

 Protection against fluctuating demand.

 Protection against fluctuations in output.

 Minimization of risk and uncertainty.

 Risk of obsolescence.

 Minimization of material cost.

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 3.1.3: Inventory flows and supply chain

 Inventory flow is a system that companies use to move raw materials or finished
products.

Supply Chain

 The supply chain is viewed as a single entity rather than a series of fragmented elements
such as procurement, manufacturing, distribution, etc. This is also how logistics is viewed
in most forward-looking companies.
 The real change is that both the suppliers and the end users are included in the planning
process, thus going outside the boundaries of a single organization in an attempt to plan
for the supply chain as a whole.
 Stock management in the retail supply chain follows the following sequence:
o Request for new stock from stores to head office
o Head office issues purchase orders to the vendor
o Vendor ships the goods.
o Warehouse receives the goods.
o Warehouse stocks and distributes to the stores
o Stores receive the goods.
o Goods are sold to customers at the stores

The management of the inventory in the supply chain involves managing the physical quantities
as well as the costing of the goods as it flows through the supply chain.

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 3.2: Warehousing and inventory management

3.2.1: Principles of stores and warehouse management

Definition

A simple definition of a warehouse is:

‘A warehouse is a planned space for the storage and handling of goods and material.’ (Fritz
Institute)

In general, warehouses are focal points for product and information flow between sources of
supply and beneficiaries. However, in humanitarian supply chains, warehouses vary greatly in
terms of their role and their characteristics.

Global Warehouses

The global warehousing concept has gained popularity over the last decade as stock pre-
positioning becomes one of the strategies for ensuring a timely response to emergencies. They
are usually purpose built or purpose designed facilities operated by permanent staff that has been
trained in all the skills necessary to run an efficient facility or utilizing third party logistics (3PL)
staff and facilities. For such operations, organizations use, information systems that are computer
based, with sophisticated software to help in the planning and management of the warehouse.
The operating situation is relatively stable and management attention is focused on the efficient
and cost effective running of the warehouse operation. Numerous organizations have centralized
pre-positioning units strategically located globally. Some of these offer extended services to other
humanitarian organizations on a cost plus operating charges basis. The United Nations
Humanitarian Response Depot (UNHRD) Network.

Field Warehouses

Field Warehouses are usually temporary in nature. They may be housed in a buildings which was
not designed to be used as a warehouse, in a temporary building/structures, and are often in
mobile units (rub halls, Wiikhalls) that are little more than a tent in a field. The initial staff may
be a casual workforce that has never worked in a warehouse before and the inventory system is
more likely to be paper based. Often the situation is initially chaotic, sometimes dangerous
and coupled with a humanitarian need which may be very urgent. The management style must
therefore be practical and action oriented with a focus on making the humanitarian goods
available as quickly and efficiently as possible, while being accountable at the same time.

Policies and Procedures

Policies

The policies contain hard and fast rules and regulations that define the general conduct of the
warehouse operation. Examples of the types of policies that organizations will define are as
follows:

 Organizational specific warehouse management policy and procedures guideline outline

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  Health and safety
 Human resources management
 Security
 Pest control
 Warehouse maintenance and cleaning
 Quality control
 Record keeping and reporting
 Reverse logistics – return of goods and exit strategy in the event of downscaling or
shutting down operations
 Disposal of obsolete and damaged goods.

Procedures

The procedures' document defines step by step how the activities in the warehouse should be
carried out and clearly defines the processes to be adopted. These can be adopted as ‘best
practice’.

The procedures provide visibility of the operations for managers and donors.

However, in creating such procedures, care must be taken to avoid constraining the use of local
initiative which might be required to deal with local conditions. Procedures should be considered
as streamlining the business processes and providing checks and balances. They provide
guidance to warehouse managers and must have some level of flexibility to cater to unique
situations. This can be achieved by limiting the level of detail that the procedures document
defines, allowing more flexibility and/or by arranging ‘dispensations’ to allow departure from the
procedures in order to optimize local performance, especially in emergencies.

The procedures will normally provide the step by step guidance on how to manage each aspect
of warehousing and may cover:

 Receiving and issuing of supplies;

 Quality control or verification;
 Storage of goods;
 How to control stock movement (stock control);
 Documentation flow;
 How to detect and deal with stock losses;
 How rejected material will be managed; and
 How to deal with unwanted material, obsolete and scrap, disposal.

Types of Warehouse Space

1. Commercial: in rented building used for business.

2. Government or state: such as at the ports or harbours. This is common in emergency
situations.
3. Transit: for temporary storage of goods destined for different locations and need storage
for a very short time.

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 4. Bonded warehouses: for storage of goods whose duty is unpaid and especially where
the goods are destined to another country. Pre-positioned stock is often held in bonded
warehouses so that export is quick and can sometimes be stored for long periods.
5. Open storage: not ideal for perishable products but in emergencies, sometimes the only
alternative.
6. Space that is owned and managed by the organization.
7. Pre-fabricated warehouses where there are no permanent structures available. This is
common practice in emergencies.

Basic Principles of Warehouse and Inventory Management

 Planning inbound receipt procedures.

 Storage formalities e.g:
o location management
o inventory control
o occupational health and safety
 Outbound delivery procedures.

How to Select and Set-Up a Warehouse

Determining Needs

In determining needs, one should look beyond the basic need of a warehouse to store things.
Whilst, this is correct there are also other considerations.

 The volume of goods;

 Speed of through-put required;
 As a transit point;
 Breaking bulk location;
 An area for sorting and consolidating different goods;
 To enhance the speed of the response;
 To protect and account for inventor; and
 As a buffer in the event of a break-down or delay in the supply pipeline

Determining Storage Requirements

Selecting a Suitable Location

There are a range of factors to consider when deciding on the location of a new warehouse facility
and these may vary depending on whether you are selecting a location for a temporary building
or selecting from one of a number of existing buildings.

These may include:

 Proximity to ports of entry and beneficiaries

 Existing buildings
 Security
 The context

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  Site condition
 Access
 Services
 Land size available
 Purpose of warehouse
 Previous use of the facility
 Floor weight
 Access to labour

Warehouse Selection

Factors to consider:

 Nature and characteristics of goods to be stored;

 Nature of handling equipment available;
 Duration of storage needed i.e. Short term or long term;
 The need for other activities, e.g. Repackaging, labelling, kitting, etc;
 Access and parking for vehicles;
 Number of loading docks required; and
 Secure compound.

Warehouse Preparation Planning

Space layout

The areas that should be planned are both the general storage areas and the areas for goods
receipt, consignment picking and goods dispatch. It is also desirable that space should be set aside
for the following activities:

 Equipment maintenance and parking;

 Charging of equipment batteries such as pallet trucks;
 Refueling of trucks;
 An area for garbage disposal e.g. Empty packaging;
 A quarantine area for keeping rejected goods, goods to be sent back or destroyed;
 An employee rest area;
 Washroom; and
 An administration office.

Planning

It is worth keeping these requirements in mind during the planning of the main operating areas.
Planning consideration needs to be given to the following:

 Allocate space for each type of product and locating number;

 Allow sufficient space for easy access to the stacks for inspecting, loading and unloading.
Stacks should be one meter from the walls and another meter between stacks;
 Sizing the goods receipt and dispatch area;
 Allow space for storage of cleaning materials and supplies;

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  Allocate areas for damaged items by consignment number;
 Allow sufficient space to repackage damaged items and place it in separate stacks;
 Sufficient free space is needed to operate a warehouse effectively. When planning the size
of a warehouse consider:
o Planning on having about 70-80% utilization of available space, whilst
considering:
o Throughput rate
o Number of stock keeping units (sku)
o Handling characteristics of items, etc.
 See stacking guide in the annexes.

How to calculate warehouse storage space.

Special storage needs

Some relief items require special attention in terms of the type and security of the storage area.
For example:

 Medical supplies and drug shipments can contain a large number of small, highly-valued
and, often, restricted items, many with a limited shelf-life. Thus, a secure area is required,
as well as judicious attention to expiry dates.
 Hazardous products such as fuels, compressed gases, insecticides, alcohol, ether and
other flammable, toxic or corrosive substances must be stored separately, preferably in a
cool, secure shed in the compound but outside the main warehouse.
 Antibiotics and vaccines may require temperature-controlled cold storage arrangements,
with sufficient capacity and a reliable, as well as a back-up, power source.
 With combustible items, such as alcohol and ether, specific attention is required when
storing and handling. Inventory management techniques need to be implemented to
prevent wasteful surpluses and to ensure proper stock rotation to avoid costly losses due
to expired goods. Procedures for controlling, preserving and releasing medical supplies
and drugs should be established in consultation with the medical experts.

Space utilization and handling

Diagram 1: Space utilisation

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 As shown above, the warehouse operation is composed of four key work activities:

 Goods receipt
 Storage
 Picking
 Goods dispatch

To estimate the resource requirement for the whole warehouse, one should start by estimating
the requirements for each of the key work activities in turn and the level of demand. Then, the
resource requirements for all activities should be combined together, taking into account the way
that the activities are phased during the working day, in order to make an estimate of the total
resources required.

Aspects to consider when managing Warehouse Operations

 Planning the workload

 Allocating resources
 Space utilization & handling, (see the diagram above):
o Receiving goods;
o Storing goods.
 Assembling consignments
 Dispatching consignments
 Disposal of goods
 Pest control
 Security
 Inventory management
 Handling and stacking techniques
 Occupational health and safety

Managing Inventory Levels

It has been established that the role of inventory management is to ensure that stock is available
to meet the needs of the beneficiaries as and when required.

Inventory represents a large cost to the humanitarian supply chain. This is made up of the cost of
the inventory itself, plus the cost of transporting the goods, cost of managing the goods (labor,
fumigation, repackaging, etc) and keeping the goods in warehouses. The inventory manager's job
is to make inventory available at the lowest possible cost.

In order to achieve this, the inventory manager must ensure a balance between supply and
demand by establishing minimum holding stocks to cover lead-times. To achieve this, the
inventory manager must constantly liaise with the programs to keep abreast of changing needs
and priorities. The warehouse must always have sufficient stocks to cover the lead-time for
replacement stocks to avoid stock-outs.

Inventory Control

There are two methods of inventory control that are applicable to emergency situations:

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 1. Reorder level policy
2. Reorder cycle policy.

Both are applicable to humanitarian situations and have associated pros and cons. Note that
economic order quantity (EOQ) in practice only works in a fairly stable environment where
demand variability and replenishment lead-time are reasonably stable and predictable. This is
not the case in an emergency. Economic order quantity is applicable in more stable environments
such as refugee camps and perhaps later in a relief/recovery phase.

Inventory management in an emergency is more ‘project based’, matching supply with demand
in a rapidly changing environment. This requires building a supply chain that has a high level of
flexibility and adaptability, with rapid identification of need and rapid fulfilment of that need
through the supply chain.

In managing this sort of system, inventory should be considered in relatively small quantities
(inventory packages of associated relief items) that are attached (pegged) to an identified need
then moved (and tracked) through from source to the identified need (the user).

Optimization comes from having logistics systems that can configure, procure and consolidate
these packages quickly and a distribution chain that is flexible and can adapt to changing
requirements quickly and at least cost.

Information systems that facilitate transparency of the supply chain inventory levels, location,
and demand provide the necessary visibility to facilitate good planning and effective decisions
that maximize services and reduce costs.

Stock control and movements

The warehouse/inventory manager is responsible for monitoring the movement of goods as they
are transported from the supplier and for the control of stock movement in the warehouse facility.

The vital stock control measurements include:

 Establish levels of operating stocks based on consumption/rate of usage. The stock levels
shall be reviewed from time to time depending on current needs. (see “inventory control
above);
 Ensure that weekly and monthly stock balances reports of each stock item and the total
value are prepared;
 Maintain monthly stock usage report of each item kept in the store and the overall in the
usage trend in last six months;
 Review and report on six monthly basis slow moving items indicating the last movement
date the unit value and total value and liaise with user department;
 Establish quantity, lead -time and availability of each item supplied on the market;
 Keep a record of all non- stock items received from suppliers, returned to suppliers and
issued out to users.

Monitoring Goods in Transit

 Order lead time

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  Tracking orders for goods
 Controlling stock movements:
o Establishing minimum stock levels and monitoring the same;
o Goods receipt quality inspections;
o Physical stock control in the warehouse;
o Controlling specialized items; and
o Releasing stock from storage and goods dispatch.

To facilitate and account for movement of stocks the following documents could be used:

 Delivery notes or waybill samples 1 and 2 or packing list samples 1 and 2;

 Goods received notes, see several samples 1, 2, 3, and 4;
 Stock card;
 Bin card; and
 Consignment notes.

Stock Records - Documentation

 Stock identification
 Stack cards, see samples 1 and 2
 Bin cards
 Stock checks: see inventory section for different samples or in the annexes
 Sock loss reporting
 Reporting of stock levels.

Resource Requirements

In addition to the work methods, equipment and space requirements it is essential that the
warehouse is adequately resourced. This is done by planning or estimating the requirements for
people and equipment in order to operate the warehouse facility.

There is a trade-off to be made between the people and handling equipment requirements for any
given workload.

In global warehouse operations, which are run like commercial operations, the focus is on
minimising the cost of running the operation. In this situation, it is often better to invest in
handling equipment and reduce the dependence on people resources.

However, in field operations, many humanitarian organisations prefer to hire local labor which
provides employment instead of relying on handling equipment.

The requirement for the total amount of resources required will be determined by the amount of
goods flowing into and out of the warehouse, as shown in the diagram below.

Basic Warehouse Equipment

Various types of equipment are required to ensure the smooth execution of work in a warehouse.
All equipment should be properly stored when not in use and a regular maintenance schedule
posted. Warehouse staff should be trained in standard daily maintenance practices and the

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 correct use of equipment. Where necessary, they should be equipped with personal safety
equipment such as work gloves, work boots, goggles, etc.

Required equipment may include:

 Sufficient quantities of standard forms, calculators and stationery to keep proper storage
records;
 Small tools for opening cases, such as hammers, pliers, crowbars, steel cutters;
 Tools and materials for store repair and simple maintenance;
 Supplies for reconditioning damaged packaging, such as bags, needles, twine, oil
containers, stitching machine, strapping machine, adhesive tape and small containers or
cartons;
 A sampling spear for inspecting foodstuffs;
 Scales for weighing goods;
 Standard wooden pallets in sufficient numbers – ideally international;
 Standardization organization’s “euro” type (120 × 80cm);
 Two-wheel hand trolleys for moving supplies within the warehouse;
 A pallet-jack to move pallets;
 A forklift where pallets are to be loaded and offloaded from trucks;
 Brooms, dust pans, brushes, shovels, sieves, refuse bins for cleaning and disposing of
collected waste;
 First aid kits, flashlights, fire extinguishers and other fire-fighting equipment both inside
and outside the warehouse;
 Weighing scales; and ladders.

Care of Warehouse equipment

Warehouse equipment is maintained to prevent accidents and breakdowns from occurring.

Maintenance activities consist of inspections, regular servicing and monitoring performance for
failure trends, as this will enable symptoms to be recognised before failure occurs.

Equipment maintenance has a strong health and safety bias. Often health and safety legislation
will impose on management an obligation for safe systems of work. Ensuring safe policies and
procedures of work will require an examination of men, machinery, methods, materials and
environmental aspects.

Some areas to pay attention to:

 Planned maintenance
 Maintain equipment
 Maintain building
 Completion of maintenance records

Legal Considerations

Leasing Temporary Warehouses/Contracting.

The common practice in emergencies is to lease or rent, not purchase warehouses. In this
situation, there is often a shortage of suitable buildings or locations for warehouse space and this

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 can often cause the costs to increase significantly. Therefore, it is often necessary to utilise
temporary warehouse space for as short a time a possible.

Care must be taken with the drawing up of the lease agreement (See Warehouse Rental Contract
sample) with the owner. The following items are basic inclusions and in a lease agreement:

 The cost for the lease;

 The duration of the lease agreement;
 Exit clause: the period of notice required for terminating or extending the lease period.
Confirmation of the existence of property insurance, covering third-party, fire, water
damage, window breakage, etc;
 Details of any security arrangements;
 A detailed inventory of any equipment, fixtures and fitting included with the building and
detailed description of their condition;
 Confirmation of either sole tenancy or details of other tenants;
 Information about the ground or floor strength per square metre;
 The weight capacity of any equipment such as forklifts, racks and shelves;
 In situations where neutrality is important, care must be taken to establish the actual
owner of the building, which might be different from the ‘lessor’ of the building e.g. The
military, religious groups or government;
 Force majeure;
 Indemnity; and
 Insurance

Conclusion
The warehouse is a key component of the supply chain in emergencies. It buffers uncertainties
and breakdowns that may occur in the supply chain. When properly managed and appropriately
stocked a warehouse provides a consistent supply of material when it is needed.

3.2.2: Store management process- ASL, EOP, LIFO and FIFO

Store

 The term stores, storehouse, warehouse etc. refer to the physical place be it a building or
a room etc. where materials of all variety are kept.
 The function of stores is to receive, store and issue materials.
 Stores are normally divided into various sections such as:
o Receiving section
o Tool stores
o General stores
o Raw materials stores
o Finished parts stores etc.
 Stores plays a vital role in the operations of a company

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  Stores networks are incredibly complex and therein lies the opportunity of improvement.

Store management.

 Store management is “to receive materials, to protect them while in storage from damage
& unauthorized removal, to issue the material in the right quantities, at the right time to
the right place and to provide these service promptly and at least cost”.

Functions of stores:

o To receive raw materials, components, tools, spares, supplies, equipment and

other items and account for them.
o To provide adequate, proper and efficient storage and preservation for all the
items.
o Physical checking of all incoming materials as per the delivery challan / invoice
and proper maintenance of daily goods receipt register or records.
o Arrange for inspection of incoming materials.
o Ensure that goods inward notes (gin) are raised and distributed without delay
o Issue materials to the consuming departments against authorised requisitions
and account for the same.
o Maintain accurate and up – to – date records of material received, issued, rejected,
disposed, and quantity on hand of all the items.
o Ensure that all documents relating to receipts and issue are sent to stock control,
accounts and other concerned departments.
o Undertake stock verification as per approved procedure.
o To highlight stock accumulation, discrepancies and abnormal consumption and
initiate appropriate control action, wherever necessary.
o To minimize obsolescence, surplus and scrap through proper codification,
standardization, preservation and handling.
o To ensure good housekeeping so as to minimize the need for material handling.
o To make available a balanced flow of materials so as to economies on capital tied
up in inventory.
o To accept and store scrap and other discarded materials.

Depending upon the nature of business (i.E. Manufacturing, trading services, etc,) one or more of
these functions may gain primacy over the rest.

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 Store management process

ASL

 Authorized Stock Level (ASL) refers to the maximum allowed stock level of drugs and
other program items. Typically it is a stock level for ten months for district stores and five
months for health facilities below district level.

EOP

 Emergency Order Point (EOP) refers to the minimum allowed stock level of drugs and
program items. It is a stock level for one month. If it falls below the minimum authorized
level an emergency order has to be made to concerned bodies.

FIFO

 First – In – First Out Method is an inventory management system that ensures the
products with the earliest in are the first products issued. This system moves older stock
first to prevent expires.
 FIFO method, as its name suggests, is governed by the principle that the materials which
are received first are issued first.
 The issues are priced at the cost price of the oldest consignments till it gets exhausted.

LIFO

 Last – In – First – Out – Method is a store management process that ensures the products
with the latest in are the first products issued. This system moves newer stock first for
handling the storage. This is done in high density storage.

3.3: Reverse logistics

Introduction

Reverse logistics was traditionally defined as the process of moving a product from its point of
consumption to the point of origin to recapture value or ensure proper disposal. It is one of the
fastest developing fields of business logistics, with the result that it is continuously changing in
scope and significance. Reverse logistics includes activities to avoid returns, to reduce materials
in the forward system so that fewer materials flow back, and to ensure the possible reuse and
recycling of materials.

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 It is important to ensure that aid projects are handled in a responsible manner and that they do
not end up causing long term damage to the very people and nations that they are intended to
assist.

Thinking in advance about long term effects of the aid that a humanitarian organization is
providing can save money and time, reduce operational challenges, and minimize environmental
and/or other long-term damages.

Definition

“The process of planning, implementing, and controlling the efficient, cost effective flow of raw
materials, in-process inventory, finished goods (in the humanitarian context) and related
information from the point of customer receipt to the point of origin to recapture value or
appropriate disposal.”

Wikipedia

“Reverse logistics is the management of all the activities involved in the flow of goods, demand
information and money in the opposite direction of the primary logistics flow, a reduction in the
generation of waste, and the management of the collection, transport, disposal, and recycling of
hazardous as well as non-hazardous waste in a way that maximizes the long term profitability of
the business.”

Link

Types of Reverse Logistics

Reverse logistics covers a broad range of items and activities and can include:

 Movement of capital items and equipment to the next emergency response.

 Removal of containers and packaging from response area.
 Destruction of spoiled food commodities and out of date pharmaceuticals.
 Return of rejected goods to the suppliers.
 Movement of excess or over-supplied goods to other programs or organizations.

Aspects of Reverse Logistics

Packaging

Where possible, packaging materials could serve dual purposes as in the case of large bladders,
wooden pallets, cooking drums, fuel drums, etc. Some examples include:

Pillows/bladders

As goods are mobilized through various modes of transport in response to emergencies, the
bracing in ship and rail containers can be done with “pillows” which are basically large bladders
filled with air.

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  The bracings can then be further used at distribution sites for water storage (or fuel
storage if they are correctly lined).
 These “pillows” filled with air also weigh less than traditional wood bracing and thus
lower the weight of the shipment and the cost.
 Environmentally the lower weight means less fuel is used which is good for the
environment.

Wooden pallets vs. plastic pallets

 Wooden pallets, though less expensive, may contain pests which can devastate indigenous
agricultural industries.
 Developed countries are therefore required to treat wooden pallets with chemicals
making the burning of these for firewood toxic and less environmental friendly.
 Many countries have now restricted the clearance for wooden pallets from many areas to
combat the pest issue.
 Plastic pallets can be reused as the local population will not be tempted to burn them for
firewood.

Cooking oil drums and fuel drums

 These can usually be converted into barbecues or water storage containers on site.
 Agencies that plan for this will look more efficient.

Plan to Back Ship

 Most of the goods in the humanitarian world are consumable and thus are on a one-way
trip.
 Packaging may be able to be disposed, recycled or reused in the capital city while it may
not be possible in remote field locations.
 Return shipping will not be expensive, as trucks and aircraft have to return empty
anyway. But to capitalize on such opportunities the program is required to plan in
advance so as not to cause unnecessary delays to transporters.

Reverse Logistics in the Humanitarian Sector

Reverse logistics occurs when there is:

 Downscaling of activities:
o Program closure - goods are moved to different programs or disposed,
o Evacuation due to insecurity - may result in the suspension of deliveries of goods
that have already been purchased and are returned to the supplier or used in
other programs;
 Closure of programs or handover of emergency response programs;
 Product recalls (goods re-called by the manufacturer);
 Rejected goods returned to the vendor:
o Wrong orders,
o Wrong deliveries,

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 o Deliveries delayed and goods no longer useful to the program,
o Damaged goods,
o Goods on warranty or going for repair;
 Back-trucking of packaging materials for re-use or disposal.

3.3: Tender or Bidding

3.1.1: Concept, types and process of bidding

Concept of bidding

• Bidding is a offer to set a price by an individual or business for a product or services or a

demand that something be done.

• Bidding is used to determine the cost or value of something.

• Bidding can be performed by a “buyer” or “supplier "of a product or service based on the
context of the situation.

Tender

• To tender is to invite bids for a project, or to accept a formal offer such as takeover bid.
Tender usually refers to the process whereby government and financial institution invite
bids for large project that must be submitted within a finite deadline.

Types of bidding

1. Traditional bidding: In a traditional auction, the auctioneer begins by asking for an

opening bid and then the audience continues to escalate bids until the highest bidder is
determined.

2. High bidder’s choice- in this style of bidding, similar properties are grouped on a display
next to the auctioneer. Bidders then bids for the right to select the property of their choice
from the display.

The highest bidder’s choice is then removed and a subsequent round of bidding begins.
This style of bidding is most commonly used on the sale of new construction
condominiums or townhomes.

3. Multi-par bidding- multi-par bidding is most commonly used on the sale of large
undeveloped land where multiple parcels of land are offered. This method allows the
bidder to place bids for various configurations of parcels based on bidder’s desire to
assemble the parcels.(national property solutions)

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 Process of bidding

There are five steps in bidding process-

1. Specifications

The first step in the bidding process deals with coming up with the specifications for the
job. The company or costumer looking for bids has to develop specifications for the
bidding process. For e.g. if the customer needs a building constructed, a schematic or
blueprints must be developed first. All of the details for the entire project must be outlined
in the documentation.

2. Request for bids

After the details of the project have been developed, the costumer must request that bids
be made. This can involve sending out invitations to bids on projects and posting the
opportunity online.

In some cases, the client will only request bids from a pre-selected list of contractors. In
other situations, the bid opportunity may be open to anyone who qualifies to bid on it.

3. Bidding

After the information about the project has been distributed to contractors, the bidding
process begins. The bidding process can differ, depending on the rules set by the client. In
some cases, sealed bids will be submitted and the costumer will evaluate them.

In other cases, a more informal bidding process will be involved in which contractors
simply give a total amount that they can do the job for.

4. Reviewing the bids

The costumer will typically set a deadline on when the last bids will be accepted. Once
that deadline is reached, the customer will begin reviewing the bids. The length of time
that it takes to review the bids could vary, depending on the number of bids received.

5. Awarding the contract

After the bids have been thoroughly reviewed, the customer will award the contract to
one bidder.

In most cases, the bidder with the lowest bid wins. In some situations, the bidder will
award the contract not only on price but other factors as well. for instance, the costumer

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 may be inclined to go with a more reputable provider or with those where a prior
relationship exists.

Typical Tender Problems

 Either related to Contractors or Owners’ Problems

1. Contractors’ Problems
a. Incomplete Bids
 Not all requested documents have been provided.
 Not all requested prices have been submitted, e.g. Separate, itemized, unit or
alternate prices missing or not properly filled out.
 Sub trade list is missing or inadequate.
 Bid bond missing from bid.
 Surety’s consent missing from bid.
 Receipt of supplement not acknowledged.
b. Faulty Bids
 Bid not signed or sealed properly.
 Mathematical errors in bid.
2. Owners’ Problems
a. Insufficient Number of Bids
 Only one bid received.
 Only two bids received.
b. Owner wants to manipulate bid result using Alternate or Separate Prices.

c. Owner wants to award to low bid that is qualified or non-compliant.

d. Two bids received that are identical, owner wants to use non disclosed criteria to
determine award.

e. Owner wants to exercise privilege clause to award in accordance with non-disclosed

criteria.

f. Owner wants to add an uninvited bidder after a prequalification process.

g. Owner wants to open a late bid either because too few bids received or owner
knows/prefers bidder.

Constraints

1. Time and effort wastages in seeking procurement information.

2. Physical access barriers.
3. Human interfaces- Low value addition.
4. Non Transparent processes for suppliers.
5. Possibility of data tampering and loss of records.

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 The Issues

1. Risk management

2. Evaluation

3. Procurement isolation and lack of knowledge

4. Use of non-standard contracts and

5. supplementary conditions

6. Quality of tender documents

7. The stressed process

8. Communication

1. Risk management

 Bids evaluated on price on alone.

 Lack of recognition of the important role of pre-qualified submissions.

2. Evaluation

 The focus is more toward price instead of quality.

 The project budgets are many times unrealistic.

3. Procurement and Lack of Knowledge

 Lack of realistic timeframes for the tendering and procurement process.

 Inconsistency across different departments within the organization.

 Procurement process complicated

4. Non-Standard Contracts/Supplementary Conditions

 Creates confusion
 Not tested in law – poorly written, usually by a non-construction person
 Largest number of complaints come from this area

5. Quality of Tendering Documents

 Inadequate time for proper design development.

 Ensure that the designer understand construction logistics.
 Lack of clear expectations of the work required (owner to consultant).

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 6. The Stressed Process

 Inefficiencies in the tendering and bidding process

 Lack of clarity creates adversarial situations
 Too many cooks in the kitchen
 Lack of prompt responses
 Unrealistic delivery times on price and project

Some Benefits of Tendering & Bidding Process:-

1. Enhance Competition between suppliers,

2. Cost optimization and value of sale enhancement,

3. Transparency of purchase process,

4. Open vacancies for new market competitors and entrepreneurs,

5. Minimize potentials for conflict of interest,

6. Give more space for negotiation,

7. Assure subjectivity and accuracy of purchase.

1.3.3: New approach of bidding: E- bidding (logistic)

Situation before e-Procurement

 Discrimination in issue of tender schedules

 Physical threats to bidders

 Cartel formation - suppresses competition

 Pressures on dept. officials

 Inordinate delays in tender finalization

 Human interface – Manipulations, tampering

 Inadequate transparency

 Adverse Press coverage on Tender fracas

What is e-Procurement?

 E-Procurement is the application of technology to public procurement

 An e-Procurement implementation strategy is a management and reform program

 It applies to the acquisition of works, goods and services

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  Objectives include to improve efficiency and management

 E-procurement is a system of procuring goods and services online using the internet
/ computer systems.

 An electronic integration and management of all procurement activities including

1. Purchase request

2. Ordering

3. Delivering and payment

4. Between a purchaser and supplier

5. Covers the full life cycle of procurement

 An important part of many Business to Business sites. Typically, e-procurement Web

sites allow qualified and registered users to look for buyers or sellers of goods and
services.
 Depending on the approach, buyers or sellers may specify prices or invite bids.
 Transactions can be initiated and completed.
 Ongoing purchases may qualify customers for volume discounts or special offers.

Benefits of e-Procurement

1. Reduce procurement cycle times.

2. Increase supplier’s access.
 Ensure wider participation.
3. Reduce costs of procurement
 Competitive bidding.
4. Remove cartelization.
 Reverse auctioning.
5. Increased visibility and transparency
6. Complete elimination of paperwork.

3.3.3.2: Types and forms of E-Procurement

1. Web-based ERP: Creating and approving purchase requisitions, placing purchase order,
receiving goods and services using a software system based on fully automated internet
technology.
2. E-MRO: Use only for procuring indirect material eg: maintenance and repairing
response concern.
3. E-Tendering: Sending requests for information and quotations to suppliers and
receiving response online.

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 4. E-reverse auctioning: Participating in auctioning to buy goods and services through
internet.
5. E-informing: Gathering and distributing procurement information through internet.
6. E-market sites: A web sites where buyers and sellers come together to communicate,
exchange ideas, bid in auctions and buying and selling their products and services.

E-Bidding: Practice in Nepal

1. Currently E-submission only (Evaluation and contract awarding done manually).

2. Public Account Committee (PAC) of the parliament directed the government to
implement E-bidding system in all government bodies for the contract of over Rs.25
lakhs.
3. Compulsory for contract > 1 crore
4. Currently using buyers in Nepal: DUDBC, DoR, RAP, NTC etc.

Facility made available in module

1. Tender Notice, Bid information by Buyer.

2. Amendment by buyer.
3. Bid submission by bidder.

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 4. Modification/ submission/ withdrawal by bidder.
5. Secure submitted bids.
6. Bid opening and acquire bids for evaluation.
7. Notice of successful bidder.

E-Bidding related issues

1. Making manpower well-acquainted to the process (providing training to the staff).

2. Interruption by Load-shedding (needs reliable power back-up).
3. Problem due to slow connectivity (fast internet service of 512 kbps needed).

E-Bidding: Recent Developments

1. Simplification of tender amendment process for buyer.

2. Facility to upload bidding documents in multiple sessions fro bidder
3. Document management system (DMS)

Benefits of E-Procurement

1. Institutional compliance
2. Institutional Memory
3. Single Stop Shop
4. Increased price transparency
5. Human touch points decreased
6. Increases internal efficiency
7. Best value for money
8. Equal opportunity ushers economic development

Disadvantages:

1. Transaction cost
2. Time and resource consuming
3. Budget and policy of organization
4. Infrastructure.

3.3.4: Overview of contract law

Some Terminologies
• Contract: - An official written agreement.
• Agreement: - A promise made with some body.
• Enforceable: - To make sure that people obey a particular law or rule.

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 • Law: - In its simplest sense, law can be understood as a rule.

Introduction
• The law of contract consists of two words. They are the law and the contract. The law
means rules in the simple sense. And the contract means agreements or promises.
• In its literal meaning, the law of contract refers to the rules regarding to the rules of
agreement or promises. The rules which are necessary to form the agreements or the
promises are called the law of the contract.
• The contract Act, 2056 is the law of contract in Nepal. It contains various rules of contract
in it.

Definition
Different scholars have defined a contract differently.
Salmond: “A contract is an agreement creating and defining obligations between the two parties
or more persons.”
Pollock: “Every agreement and promises enforceable at law is a contract. A contract is a promise
or a set of promises for the breach of which law provides remedy.”
Definition by Nepal contract act 2056
Section 2(a) of the contract Act, 2056 (Nepal): “A contract is an agreement made between two
or more parties to do or not to do any work which is legally enforceable.”
According to our contract Act, it is an agreement that is made between two or more persons. They
agree to do or not to do any work. The agreement gives certain rights and imposes certain duties,
which are enforced by the court of law.
Contract includes the following:
a) Two or more parties
b) An agreement
c) Exchange of promise
d) Enforceable by law.
Essential elements of a valid contract
1. Lawful offer and lawful acceptance:

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 • All contracts are agreements but all agreements are not contracts. This means that an
agreement may be made on anything but the contract requires some of the essential
elements. An agreement has two essential elements only i.e. offer and acceptance but does
not require that the offer/acceptance must be legal only.
• Offer + acceptance = agreement. Lawful offer + lawful acceptance = the contract.
2. Lawful Consideration:
• This means the agreement must be supported by the lawful consideration. Either of the
parties must be benefited or got loss while making the contract is the concept of
consideration.
3. Intention to create legal relation:
• It concerns with the agreements which intend to have legal effects. This means that the
parties must have intended their agreement to have legal consequences.
4. Capability or capacity of the parties:
• Two competent parties is another essential element of the contract. A contract cannot be
made with oneself. A competent party is who is capable to finish the contract. The parties
must be qualified by law to make any contract.
5. Free consent:
• This means both of the parties to the contract must have agreed in the same sense and for
the same thing. Their consent must be free from oppression, under influence, mis-
presentation, fraud and mistake of law.
6. Meeting of Minds:
• To be a contract, two or more than two persons must agree upon same thing in the same
sense. If 'A' want to purchase 'X' but B want to sell 'Y' than there is no contract raised
between 'A' and 'B' because there is no meeting of minds.
7. Written form and registration:
• Generally the contracts may be made orally and in the written form. Sometimes, the
contract may be indirect as well. Some agreement must be in writing and others may be
oral or express. It is very appropriate if the agreements are in writing. Agreement in
writing gives more authenticity.
8. Lawful objects or legality of objects:
• The objective of an agreement must be lawful. If its purpose is illegal, it does not form a
contract. The law always encourages people to do the good things only. The objects of any
contract will be treated as lawful or legal when it is not forbidden by law or it is not of
such a nature that if permitted to do, will violate or affect another law.
9. Certainty:
• There are certain clauses, terms and conditions in the contract. They must be clear and
comprehensive. The contract to be valid, the terms, clauses or conditions included in it
must give clear and precise meaning.
10. Possibility of performance:

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 • The contract must be possible to perform. The contracts are made for its performance and
the contract which cannot be performed cannot be said as the contract. The contracts
must be possible to perform. The contracts, which are impossible to perform, are void and
useless.
11. Not declared to be void:
• Those agreements which are expressly declared void by the contract and other law force
are not the contract. Agreement to kill the life of other or agreement to steal goods are
illegal and void.
Kinds of Contract
On the basis of enforceability there are four types of contract,
a. Valid contract:
• Agreement enforceable by law i.e. which has two competent parties, lawful consideration,
legality of objects, intention to create legal relationship, free consent, possibility of
performance, certainty, lawful offer and acceptance, in some cases written and registered
b. Void contract: Literally, the term “void’ means ‘not binding in law”.
• Void contract is a contract which ceases enforceable by law.
• Void contracts are valid in the beginning but later on these become void due to unseen
force and uncontrollable circumstance.

c. Voidable contracts: Contracts which lack free consent of either of the parties. The contracts in
which coercion, undue influence, misrepresentation, fraud and mistake are present are said to be
voidable contracts. Section 14 of Nepalese Contract Act has recognized the contracts that are
voidable as follows:
a. Contract by coercion
b. Contract by undue influence
c. Contract by misrepresentation
d. Contract by fraud
e. Contract by mistake
d. Unenforceable contracts: Such contracts which are valid but are not capable of being
enforced in a court of law are unenforceable contracts.
• They are valid as they contain every essential element necessary for the valid contracts.
However, they cannot be enforced by the court because of some technical defects i.e. may
be expiry of time for the enforcement of the contract.
Process of making the contract
Offer and Acceptance: is the first step in the process of making the contract.
• Offer & acceptance make an agreement, which is one of the essential elements of
the contract provided there is a lawful offer by one party and a lawful acceptance
of the offer by another party.

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 • It is from the offer and acceptance that the obligations (duties) on the parties are
imposed and the rights of the parties are created.
Legal rules regarding to a valid offer
• Nepalese Contract Act (NCA), 2056 has defined the offer as: “A proposal made by one
party before another with an intention to get acceptance to do or not to do something”.
• The offer gets validity if it fulfills the rules regarding to the offer.
• The rules regarding to valid offer refer to different matters which are considered at the
making of offer.
1. Express or implied offer: An offer may be express or implied. Both of the offers are valid. In
any way the offer may be made. An offer may be made either by words or by conducts. The offer
which is expressed by words may be spoken or written it is called an Express offer. Written offers
can be made by letters, telegrams, telex messages, advertisements etc. Oral offers can be made in
person or over telephone.
• Offer made through the conduct of the party is called an Implied Offer. No words spoken
or written are used. It can be understood that the offer has been made through the
behavior of the offeror. It is made by positive acts or signs so that the person acting or
making signs mean to say or convey something
2. The offeror must intend to create legal relations: the offer must be able to create legal
relations. If the offer is accepted, the parties must intend to go to the court to make another
party fulfill the terms of the offer.
3. The offer must be certain: The terms or provisions containing in the offer must be definite
and certain. If the words of the offer give more than one meaning and they do not give certainty,
it does not amount to a lawful offer.
4. The principle of objective intention of the offer: This means “words are to be interpreted as
they were reasonably understood by the man to whom they were spoken, not as they were
understood by the man who spoke them. If the actual intention of one party was different from
that of the other, there would be no contract.
5. An offer need a complete negotiation process: An offer is an expression of willingness to
make a contract on certain terms.
6. An offer may be made to a particular person, a group of person or the world at large:
When the offer is made to a particular person or a group of person it is called a specific or a
particular offer. Sometimes an offer may be made to the world at large or the public in general.
This offer is known as the general offer.
7. Communication of offer: If the offer is not made known to the offeree, there can be no
acceptance and no contract. The acceptance without the knowledge of the offer makes no contract
at all.
8. The offeror is free to put any terms and conditions in the offer: An offer can be made
subject to any terms and conditions. An offeror may attach any terms and conditions to the offer
he makes. The offeree will have to accept all the terms of the offer. And the acceptor is also free
whether or not to accept the terms and conditions
9. Two identical cross-offers: Even though the two parties make the same offer, the offers need
to be accepted. They are called the cross-offers as they are made by each other in ignorance of

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 each other’s offer. This does not amount to an offer. Neither of the parties can be called the
acceptor of the offers.
10. Time of offer: If the time has been fixed for the acceptance of the offer, the offer must be
accepted within that time.
11. Status of the special terms in a contract: There may be many special terms in the offer. If
there are special terms in a contract, they must be notified to the offeree. The offeree may be a
customer, a consumer or a client.
Lapse or termination of offer
The offer is not made for all the time. It is not that the offer once made is meant for an indefinite
time. When the offer comes to an end, it is called the termination of offer. The offer is terminated
in the following conditions:
1. Termination of offer after the stipulated or reasonable time
2. An offer lapses if it is not accepted in the mode prescribed
3. By rejection
4. By death or insanity
5. Revocation
6. Subsequent illegality or destruction of the subject matter
Rules regarding to the acceptance
Nepalese Contract Act, 2056, defines the acceptance thus: “Acceptance means an assent given
by a person upon the offer in the sense taken by the offeror.”
There are many rules regarding to the acceptance. i.e.
1. The person to accept: Only the person or persons to whom it is made can accept the offer.
Another person without the consent of the offeror cannot accept it.
2. Express or implied acceptance: The express acceptance stands for the acceptance that has
been made either in writing or by words of mouth or by performance of some required act of the
offeree.
3. Acceptance must be absolute, qualified and according to the exact terms of the offer.
4. Mode of acceptance: Acceptance must be expressed in some usual and reasonable manner,
unless the proposal prescribes the manner in which it is to be accepted
5. Mental acceptance: Mental acceptance is no acceptance. It is not communicated therefore it
is no acceptance.
6. Communication of acceptance
7. Time of acceptance
8. Status of rejected offers: If the offeree keeps counter offers the original offer comes to an end.
This is true but if the offeror agrees to the terms of the offeree, then his status changes to that of
an offeree. He becomes the acceptor if he accepts the counter offers. The contract is formed. The
offers are renewed. The counter offer becomes a fresh offer and the contract may be formed
accordingly.

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 Contract relating to sale of goods
• “Sale of Goods” refers to ‘transfer of ownership of goods” against a price from seller to the
buyer.
• The business of selling and buying of ‘movable goods’ is regulated by the Contract of Sale
of goods.
• The Contract of Sale of goods is provided in Chapter 7 of Contract Act, 2056 which is
influenced by the Indian sale of goods Act, 1930 and English Sale of Goods Act, 1893
• 'Where a seller agrees to transfer any goods immediately or in future against the price of
that goods, there is a contract of sale of goods.'
• A contract of sale of goods is a contract whereby the seller transfer or agree to transfer
the property in goods to the buyer for a price.

Features of contract of sale of goods

The contract of sale of goods has some specific features or essentials. They are given below:
a) Two Parties: There must be two parties to form a contract of sale of goods as the seller
and buyer. Under this contract, the good has to pass from seller to buyer under their free
consent.
b) Transfer of Ownership: Ownership of goods must be transferred from seller to buyer
according to the contact of sale of goods.
c) Goods: Goods means every kind of movable property except money and actionable claim.
Like; furniture, vehicles, clothes etc.
d) Price of goods: The price plays significant role for determination of consideration in the
contract of sale of goods.
e) Sale and agreement to sell: When the goods are transferred from the seller to buyer
immediately such contract is called the sale. But where the transfer of goods is to take
place at future time or subject to some condition thereafter to be fulfilled such contract
is called the agreement to sell.
f) Express and implied: The contract of sale of goods can be formed in expressed or
implied both mode.
g) Terms of Contract of sale: The contract of sale of goods may be absolute or conditional.
Place of delivery, place of payment, mode of payment or delivery of goods, time of
payment or delivery may be the terms or conditions under the contract of sale of goods.
h) Essential elements of valid contract: Contract of sale is the special contract, so there
must be the essential elements of valid contract.
Contract relating to sale of goods to be void
• In case a contract has been concluded to sell specific goods, and in case the goods have
suffered any loss or damage at the time of or before concluding the contract and the
seller had no knowledge thereon at the time of concluding the contract, the contract
shall be void.

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 Compensation on breach of contract
• The aggrieved party may realize from the party who has broken the contract, the actual
loss or damage suffered by him/her a result of such breach of contract of the loss or
damage, which the contracting parties had anticipated at the time of signing the
contract.
Special provisions concerning compensation
• In case a buyer does not accept or refuses to accept or refuses to pay the price of goods
after once signing a contract relating to sale of goods, the seller may, subject to the
contract, claim compensation from the buyer in consideration of the buyer's failure to
accept or refusal to accept the goods.

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 UNIT 4: DOCUMENTATION
4.1: Definition, types and importance of documentation and record in LM
Documentation:
Documentation is a process that involves the systematic interaction of people, events and
documents to create the records of the organization / corporation.
It is a collection of document (a piece of written or printed matter) relating to a piece (or) events.
Documentation is an important aspect in pharmaceutical industry irrespective of the fact the
manufacturing plant is involved in production of dosage form (or) active ingredient.
Manufacturer of a drug, ultimately needs quality of his product (or) finished goods. Therefore a
good documentation is essential part of a quality control system, hence every manufacturer of
drugs should have good documentation.
Its aim is to define the specifications for all materials, method of manufacture and control, to
ensure that all personnel concerned with manufacture know the information necessary to decide
whether or not to release a batch or a drug for sale and-to provide an audit trail that shall permit
investigation of the history of any suspected defective batch.
Document:
As discrete packages of recorded information are the tools of quality assurance. Used to establish
standard specification and processes that assures compliance with standard specifications and
processes. Quality cannot be assured in a regulated industry without good documents and good
documentation practices. A document system is an interdependent, interrelated set of
documents, each with a defined purpose and a consistent format.
Objectives of documentation:

 To define all materials specifications.

 To define manufacture and control methods.
 To ensure all personal of manufacture and control department know what to do, and
when to do.
 To ensure that personal authorized to release a batch for sale (or) reject, it have all
information to take decision.
 To provide information during investigation, if a batch is suspected to have defect(s).
Essential characteristics:
To design an effective & efficient documentation process first identify the important
characteristics of processing event.

 The document directing the manufacturing event fulfills current regulatory commitments
to the agency; it is appropriately written, reviewed and approved.
 The directive document is appropriate for the task to be performed.
 The data is authentic; the individual responsible for performing the work has entered the
data on an appropriate data collection document.
 The data is accurate.
 The data is complete. There is no missing information, and there is no work as yet
uncompleted that will impact the occurrence of the data presented.
 The data is legible, consistently recorded and trustworthy.
 The data collected fulfills expectations (specifications).

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  The data is accessible to those who need to review it, audit it or use it to perform trending
analysis.
 The original data and the original documents (manufacturing record) is retrievable for
review or audit.
 The original manufacturing record is secure. Proper control of documentation also
requires that responsibility for each processing step to be assigned.
 “All documentation should be legible, clean, readily identifiable, and retrievable and
maintained in facilities that provide a suitable environment to minimize deterioration or
damage and to prevent loss”.
Why documentation:

 There is a saying in the pharmaceutical industry: 'if it hasn't been documented, then it
hasn't happened!'
 Good documentation practice constitutes an essential part of the QA system.
 Documentation system must be proactive vehicle of communication.
“Your documentation is an advertisement for your work. ˮ
Where documentation?

 Documentation during Project Design.

 Documentation during Construction Phase.
 Documentation during Commissioning and start-up.
 Documentation during Qualification and Validations.
 Documentation during Commercial Production.
 Documentation during Testing and Release.
 Documentation for Regulatory submissions.
Types of documents:
There are three types of Documents:
1. Commitment documents.
2. Directive documents.
3. Record documents.
1. Commitment Documents: Relationship between industry and the regulatory authorities. EX:
New Drug Applications (NDAs), Drug Master Files (DMFs) etc.
2. Directive Documents: Relationship between the Management and Employees. EX:
Specifications, STPs, Standard Operating Procedures (SOPs), Medicinal Product Records (MPRs)
etc.
3. Record Documents: Relationship between the Employees and the Work they perform. EX:
Protocols, Batch Production Records (BPRs), Log Books, Calibration Records etc.
1. Commitment Documents:

 These presents corporate goals, expectations and standard of practice.

 It describes what to do.
 Consensus of purpose, direction and authorization for projects.
 It organize the work in a manner that assures efficient and effective work flow.
 Commitments documents can also be written to establish internal commitments.

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  These documents such as master plans; organize and prioritize the work in a manner that
supports good business practice as well as regulatory compliance.
 Written to lead and guide the work and workers.
 To be used as active documents that are consulted and followed routinely.
 Content must be consistent and rigorous in order to lead and guide the work and the
workers.
 Must describe the work as it will be done.
 Deviations from regulatory submissions can have signification impact on product quality.
 Any deviation must be documented and managed.
New Drug Applications (NDAs):
The New Drug Application (NDA) is the vehicle in the United States through which drug sponsors
formally propose that the FDA approve a new pharmaceutical for sale and marketing. The goals
of the NDA are to provide enough information to permit FDA reviewers to establish the following:

 Is the drug safe and effective in its proposed use(s) when used as directed, and do the
benefits of the drug outweigh the risks?
 Is the drug’s proposed labeling (package insert) appropriate, and what should it contain?
 Are the methods used in manufacturing (Good Manufacturing Practice, GMP) the drug and
the controls used to maintain the drug’s quality adequate to preserve the drug’s identity,
strength, quality, and purity?
Drug Master Files (DMFs):
Drug Master File or DMF is a document prepared by a pharmaceutical manufacturer and
submitted solely at its discretion to the appropriate regulatory authority in the intended drug
market. There is no regulatory requirement to file a DMF. However, the document provides the
regulatory authority with confidential, detailed information about facilities, processes, or articles
used in the manufacturing, processing, packaging, and storing of one or more human drugs.
Drug Master File (DMF) is a document containing complete information on an Active
Pharmaceutical Ingredient (API) or finished drug dosage form. It is known as European Drug
Master File (EDMF) or Active Substance Master File (ASMF) and US-Drug Master file (US-DMF) in
Europe and United States respectively.
The DMF contains factual and complete information on a drug product's chemistry, manufacture,
stability, purity, impurity profile, packaging, and the cGMP status of any human drug product.
2. Directive Document:

 Working documents that establish the standards for resources, processing, products &
quality system.
 Describe how to do it……???
 Describe how to do routine work.
 Several types of directive documents.
 The different types are determined by the specific, functional purpose of the document in
the document system.
 In order to facilitate the development, production, testing and distribution of a product in
a defined manner.
 Reviewed and approved by both management and the individuals responsible for
performing the work.

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 Example:
Specifications:
A document specification contains several parts: a description of the audience(s) for the
document, a detailed outline giving the structure and contents of the document, and a work plan
showing who is responsible for each part of the document and what the deadlines are for
completing each task. For large documents, there may other managerial information, such as
number of pages allocated for each section, graphics budgets, printing costs, and so forth. We do
not expect you to produce this level of detail in your document specification.
There are three purposes for document specifications:
In the workplace, formal document specifications serve three important functions: economy of
effort, work planning, and writing organization.
i. Economy of effort:
First, document specifications are used to help you reduce the amount you have to write.
When you are requested to write a major report, quite often you will be told something
like, Do a draft and then come see ‟ me with it”. After talking with your boss, you will have
to revise the draft completely so that it will have in it what the boss really wants, since
he/she hadn't thought about the project carefully until reading your draft. You can often
save yourself (and your boss) much work if you write a detailed document specification
instead. A document specification is much easier to create, change, revise, and add to than
a draft is.

ii. Work planning:

The second major function of a document specification is work planning. This can mean
either budgeting your own time, or, in large formal reports, distributing the work among
many people. Multi-author writing is probably the most common form of workplace
writing. The more you know about the specification, the more likely you are to get only
your fair share of the writing and no more. For the purposes of the class, the document
specification will serve to distribute the work between you and your partner. You should
bear three things in mind in dividing the work: even work load, respective areas of
expertise, and getting things done in the order that you need them. These points sound
obvious, but achieving a fair distribution of the work is not always easy. It involves
keeping to a schedule, for one thing, and staying in close touch with your partner, for
another.

iii. Writing Organization:

The third major function is the organization of the report itself.
Standard Operating Procedures (SOPs):
Standard Operating Procedures (SOPs) are issued to specifically instruct employees in areas of
responsibility, work instructions, appropriate specifications and required records A Standard
Operating Procedure (SOP) is a set of written instructions that document a routine or repetitive
activity followed by an organization. The development and use of SOPs are an integral part of a
successful quality system as it provides individuals with the information to perform a job
properly, and facilitates consistency in the quality and integrity of a product or end-result. The

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 term “SOP” may not always be appropriate and terms such as protocols, instructions, worksheets,
and laboratory operating procedures may also be used. For this document “SOP” will be used.
SOPs describe both technical and fundamental programmatic operational elements of an
organization that would be managed under a work plan or a Quality Assurance (QA) Project Plan
[EPA Requirements for QA Project Plans (QA/R-5) (EPA 2001a)], or Chapter 5 of the EPA Quality
Manual for Environmental Programs, (EPA Manual 5360 A) and under an organization’s Quality
Management Plan [EPA Requirements for Quality Management Plans (QA/R-2) (EPA 2001b)], or
Chapter 3 of the EPA Quality Manual. This document is designed to provide guidance in the
preparation and use of an SOP within a quality system.
Purpose:
SOPs detail the regularly recurring work processes that are to be conducted or followed within
an organization. They document the way activities are to be performed to facilitate consistent
conformance to technical and quality system requirements and to support data quality. They may
describe, for example, fundamental programmatic actions and technical actions such as analytical
processes, and processes for maintaining, calibrating, and using equipment. SOPs are intended to
be specific to the organization or facility whose activities are described and assist that
organization to maintain their quality control and quality assurance processes and ensure
compliance with governmental regulations.
If not written correctly, SOPs are of limited value. In addition, the best written SOPs will fail if they
are not followed. Therefore, the use of SOPs needs to be reviewed and re-enforced by
management, preferably the direct supervisor. Current copies of the SOPs also need to be readily
accessible for reference in the work areas of those individuals actually performing the activity,
either in hard copy or electronic format, otherwise SOPs serve little purpose.
3. Record document:
Protocol:
Protocols are written records clearly defining the objectives and methods that will be used for
the validation programs. An important part of the protocol is the description of the testing method
including who will test the system, how they will test it and what data is to be collected and
reported.
Computerized system protocols often include the three distinct stages as described in PMA
reports: Installation Qualification (IQ), Operational Qualification (OQ),and Performance
Qualification (PQ).
Protocol Changes are documented requirements specifying who and how changes to parameters,
thresholds, and acceptance criteria are made after approval. It is not impossible to make changes
after or during testing, but these changes must be properly implemented and approved to be
validatable. What Good Documentation requires:
What Good Documentation requires:
1. Approval
 This applies particularly to work instructions, procedures, manufacturing
formulae and specifications.
 Approval should be by the relevant technical, management and quality personnel,
to ensure that documents comply with the principles of GMP and the specific
product marketing and manufacturing authorizations.

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 2. Clarity
 They should not be open to misinterpretation by the users. They should be written
in a way that makes them easy to check, particularly when they will form part of
a product manufacturing history. Good documentation design will help to
minimize errors.
3. Regular review and update
 Documents must be kept up-to-date with changes in regulations or processes and
should be distributed in a controlled manner to ensure that only the most recent
versions are available for use. They must also be available to those who need
them, where they need them!
4. Formal Presentation
 Controlled documents should be prepared in accordance with a written
procedure, now a days probably using a computerized documentation control
system.
 Records should be made at the time of each action - do not rely on memory for
their completion.
 Records relating to manufacturing or testing operations should be kept for at least
one year after their expiry.
 If documents or data are stored electronically, the computer system must be
validated to assure data security and integrity.
 Provisions must also be made to retrieve the stored data, possibly years after they
have been generated
Protocol for documentation:
Protocol is a detailed plan and instructions to the employees working in pharmaceutical industry.
It is a guidebook for those involved in work.
The manufacturing records relating to manufacture of sterile products shall indicate the following
details:-
1) Serial number of the Batch Manufacturing Record.
2) Name of the product.
3) Reference to Master Formula Record.
4) Batch/Lot number.
5) Batch/Lot size.
6) Date of commencement of manufacture and date of completion of manufacture.
7) Date of manufacture and assigned date of expiry.
8) Date of each step in manufacturing.
9) Names of all ingredients with the grade given by the quality control department.
10) Quality of all ingredients.
11) Control reference numbers for all ingredients.
12) Time and duration of blending, mixing, etc. whenever applicable.
13) pH of solution whenever applicable.
14) Filter integrity testing records.
15) Temperature and humidity records whenever applicable.
16) Records of plate-counts whenever applicable.
17) Results of pyrogen and/or bacterial endotoxin & toxicity.
18) Results of weight or volume of drug filled in containers.
19) Bulk sterility in case of aseptically filled products.
20) Leak test records.

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 21) Inspection records.
22) Sterilization records including autoclave leakage test records, load details, date, duration,
temperature, pressure, etc.
23) Container washing records.
24) Total number of containers filled.
25) Total numbers of containers rejected at each stage.
26) Theoretical yield, permissible yield, actual yield and variation thereof.
27) Clarification for variation in yield beyond permissible yield.
28) Reference numbers of relevant analytical reports.
29) Details of reprocessing, if any.
30) Name of all operators carrying out different activities.
31) Environmental monitoring records.
32) Specimens of printed packaging materials.
33) Records of destruction of rejected containers printed packaging and testing.
34) Signature of competent technical staff responsible for manufacture and testing. In
addition to the routine good manufacturing practices documentation, manufacturing
records shall show the following additional information:-
a) Temperature and humidity in the manufacturing area.
b) Periodic filled weights of the formulation.
c) Records of rejections during on line check weighing.
d) Records of rejection during spray testing.
Applications

 Education
o Provide a large data bank of information
o Aid to time-tabling
 Commerce
o Assist the production of text material (known as word processing) such as
reports, letters, circulars etc.
 Banks and Financial Institutions
o Cheque handling
o Updating of accounts
 Management
o Planning of new enterprises
o Finding the best solution from several options
 Industry
o In process control
o In production control
Importance of documentation:

 Avoids confusion
 Reflects each step
 Review on or focuses on each step
 Proper presentation of data
 Increases convenience to judge performance
 Important in research proposal
 Saves time
 Reference for new comers

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 4.2: Registration and reference number and their importance
Registration

 Registration is process by which a company files required documents with the Securities
and Exchange Commission (SEC), detailing the particulars of a proposed public offering.

 It can also be defined as the action or process of registering or of being registered. For
examples: - The registration of births, marriages, and deaths.

Reference Number

 A type of document that outlines past procedures, actions or strategies as they relate to
a particular activity.

 For example, an employee could create a reference document to outline the procedures
undertaken during an infrequent activity to avoid missing steps the next time that the
activity is performed.

Importance of Registration and reference number

 Registration of health and social care professionals is important as it enhances

professional regulation.

 The prime purpose of registration is to protect the public and give confidence that the
public health workforce is appropriately trained, competent and fit to practice.

 Public reference numbers generally appear in the following locations:

o Site core Support Communication

o Release Notes

o Known Issues

 Patch and Hot fix identifiers

 It is necessary to indicate the reference number of the document. The reference number
can contain different elements depending on the type of document that you are
requesting.

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 4.3: Dispatching process and its importance

 Dispatching refers to the process of actually ordering the work to be done. It involves
putting the plan into effect by issuing orders. It is concerned with starting the process
and operation on the basis of route sheets and schedule charts.
 “Dispatches put production in effect by releasing and guiding manufacturing order in the
sequence previously determined by route sheets and schedules.” - John A. Shubin
 Dispatching is the routine of setting productive activities in motion through the release
of orders and necessary instructions according to pre-planned times and sequence of
operations embodied in route sheets and loading schedules.

Definition: Dispatching

 It refers to assigning the order related to manufacturing or problem resolution to the

desired operating point (say, worker) depending upon capacity availability and
production planning.
 It ensures that plans are getting executed without hindrance. It’s done by a dispatcher
who knows the capacities of different operating points and keeps track of orders in the
system.
 Dispatching creates a link between production and sales.

There are two different kinds of dispatching:

1. Centralized dispatching: Order dispatching takes place from a centralized location that has
complete view of capacities across production department and maps order to the worker based
on the requirement of individual order. It has greater control, greater flexibility and effective co-
ordination among several facilities. It also has effective utilization of man power and other
resources.

2. De-centralized dispatching: It’s done at the shop floor level. It reduces communication gap
and time to solve day to day problems. As shop floor person has better knowledge about local
operation, he dispatches accurately and intuitively. It also reduces duplication of dispatching of
same order.

Procedure or steps followed in dispatching

1. Moving of materials from process to process.

2. Assigning of work to machines.

3. Issuing of tools to production departments.

4. Issuing of job orders.

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 5. Recording of time taken.

6. Ensuring necessary changes.

7. Having proper liaison with routing

Delivery dates are missed due to wrong dispatching or false address data.

Products get damaged due to the wrong packaging or packing system and often lead to costly
complaints.

Or the delivery of components is incomplete because parts were forgotten when dispatching
and then have to be delivered later at extra cost

Importance of Dispatching:

1. To check the availability of input materials and ensure the movement of material from
store to first process and then from process to process.

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 2. To ensure the availability of all production and inspection aids.
3. To obtain the essential drawings, specifications and material lists.
4. To assign the work appropriate machine, workplace and men.
5. The issue of job orders authorizing operations in accordance with dates and times
previously planned and entered on load charts and route sheets.
6. The issue of time tickets, instruction cards and other required items to the workers who
are to perform the various activities.
7. The issue of inspection orders after each operation in order to determine result
regarding the quality of products if excessive spoilage occurs, to find out its causes.
8. Clean up on jobs, collection of time tickets, blueprints and instruction cards and their
return to appropriate section of production control deptt.
9. To ensure that the work is forwarded to next deptt. or storeroom etc.
10. To record the beginning and completion times of jobs on time tickets for calculation of
time interval. To forward time ticket to accounts deptt for preparing wages.
11. To record and report idle time of men and machines and request for corrective action
required.

4.4: Principles of producing documentation

Documentation must be consistent with professional and agency standards, complete, accurate,
concise, factual, organized a gained and timely, lengthy, lengthy, prudent and confidential.
1. Date & Time
 Document date and time of each recording.
 Record time in conventional manner(Eg. 9am, 6pm etc) or according to the 24
hour clock(military clock)
 Avoid recording in advance
2. Legibility
 Entries must be legible and easy to read.
 Writing must be clear.
 Very important in recording numbers and medical terms
3. Correct Spelling
 Correct spelling is essential for accuracy.
 If unsure about the spelling use a dictionary or other resource book.
4. Permanence
 Entries should be done in dark ink.
 It helps to identify changes and allows duplication (Xerox).
5. Accepted Terminology
 Use commonly accepted abbreviations, symbols and terms that are specified by
the agency
 Use universally accepted abbreviations
6. Factual
 Descriptive objective information about what nurse sees, hears, feels and smells.
 Use of inference without supporting data is not acceptable
 Vague terms like appears, seems or apparently is not accepted.
 Include objective signs of problems.

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  Subjective data is documented in client’s exact words within quotation marks.
7. Accurate
 Use of exact measurement establishes accuracy.
o E.g. Intake 450ml of water than writing adequate amount of water.
 Clients name and identifying information is written on each page.
 Before making any entry in the chart make sure that it is correct.
 Chart only your observations and actions to be accountable.
 If any mistakes occur while recording, draw a line through it and write above or
next to original entry with your initials or name.
 Do not erase, blot or use correction fluids.
 Follow agencies policy while making computerized charting.
 Write on every line but not in between the lines.
 Draw a line through the blank spaces so that no additional information can be
added.
8. Sequence
 Document events in order of occurrence.
o E.g. Record assessments, then nsg interventions and then the client
responses.
 Update or delete problems as needed.
9. Appropriateness
 Record information's pertaining to the client health problems& care only.
 Avoid personal information's that are in appropriate.
10. Completeness
 Document all necessary information's
 It should give a clear picture of what took place.
 Complete pertinent assessment data such as vital signs, wound drainage, client
complaints, who was notified and what interventions are carrid out etc are
recorded.
 The following information's should be included in the chart:
o A new or changed information
o Signs and symptoms
o Client behavior
o Nursing interventions
o Medications
o Physician’s orders carried out
o Client teaching
o Client response
11. Current
 Timely entries are must
 Keeping record at bed side may facilitate immediate documentation
 Activities/findings recorded at the time of occurrence include the following
o Vital signs
o Administration of drugs or Rx
o Preparations for diagnostic tests or surgery
o Change in the client's health status & who was notified.
o Admission, transfer, discharge or death of a client.
o Treatment for a sudden change in client’s status.
12. Conciseness (Brievity)
 Recording need to be brief as well as complete to save time in communication.
 Client’s name and the word client can be omitted
o E.g. “Perspiring profusely. Respiration shallow. 28/mt”
 Use accept abbreviations

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 13. Organized
 Information should have logical manner
 E.g. Description of pain, nurse's assessment and interventions and the
client response.
 This helps in preventing any omission of information's.
 Easy to read.
14. Signature
 Each recording is signed by the nurse.
 Signature includes the name and the title
 In computerized charting nurse will have his or her own code?
15. Confidentiality
 All the client’s record are confidential files
 The information in the chart is personal as well as legal.
 Record shouldn't be copied without the permission of the client.
 Nurse should not allow any outsiders to verify the client record.

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 UNIT 5: COMPUTER SOFTWARE APPLICATION
5.1: Introduction about software and its application in public health
Software is a general term used for computer Programs. A computer program is a planned, step
by step set of instructions that directs the computer what to do and how to do.
5.2: Various kind of statistical software used in computer

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 System Software

 System software is computer software designed to operate the computer hardware, to

provide basic functionality, and to provide a platform for running application software.
 System software includes device drivers, operating systems, servers, utilities, and
window systems.
 System software is responsible for managing a variety of independent hardware
components, so that they can work together harmoniously.
Types of System Software

 System control programs

o Controls the execution of programs, manage the storage & processing resources
of the computer & perform other management & monitoring function.
o The most important of these programs is the operating system.
 System support programs
o Provide routine service functions to the other computer programs & computer
users: E.g. Utilities, libraries,
o Ex: Text editors, language translators such as BASIC interpreter
 System Development Programs
o They assists in the creation of computer programs. Examples of system
development are – programming language, language translations.

Application software

 All of the programs that enable you to use the computer for your work. Many types of
application software exist that enable user to perform a variety of task.
 Examples of application software are-student record software, railway reservation
software, income tax software, word processors etc.
 Examples include enterprise software, accounting software, office suites, and graphics
software and media players.
Uses
Application software has a variety of uses:
1. To make business activities more efficient
2. To assist with graphics and multimedia projects
3. To support home, personal, and educational tasks
4. To facilitate communications

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 Types of Application Software
a) Packaged software is mass-produced, copyrighted retail software that meets the needs
of a wide variety of users, not just a single user or company. Packaged software is available
in retail stores or on the Web.
b) Custom software performs functions specific to a business or industry. Sometimes a
company cannot find packaged software that meets its unique requirements.
c) Web application is a Web site that allows users to access and interact with software
from any computer or device that is connected to the Internet. Many Web sites provide
free access to their programs; some charge a fee.
d) Open source software is software provided for use, modification, and redistribution.
This software has no restrictions from the copyright holder regarding modification of the
software’s internal instructions and its redistribution.
e) Shareware is copyrighted software that is
Distributed at no cost for a trial period. To use a shareware program beyond that period,
you send payment to the program developer.
f) Freeware is copyrighted software provided
At no cost by an individual or a company that retains all rights to the software.
g) Public-domain software has been donated
For public use and has no copyright restrictions. Anyone can copy or distribute public-
domain software to others at no cost.

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 Example:

Quantitative Data Qualitative Data Geospatial Data Management

Analysis Software Analysis Software Software Software

Epi Info 7 MAXQDAplus 11 ArcGIS 10.1 CSPro

MatLab NVivo 10 QGIS 2.0.1 Microsoft Access

R 3.0.2 ENVI 5.0 Microsoft Excel

SAS 9.3 GeoDa 1.4.0

SPSS Statistics 20 Google Earth

Stata 12 SatScan 9.1.1

TerraGo
Toolbar

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 • Now more than ever, local health departments and providers need to work together to
improve the health of their communities. Improving outcomes for individuals and
populations while containing costs is critical. By implementing an electronic health
record and participating in health information exchanges with other providers, local
health departments can be more strategic in achieving these goals.

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 • Netsmart's CareRecord™ electronic health record, is a completely integrated, web-based
solution with comprehensive clinical, financial management and operational features
designed just for public health
• While many statistical software applications are available, there is no accepted norm in
the profession regarding which software product to use.( some applications, such as
MedCalc, are designed primarily for biomedical analyses)
• Many leading statistical software vendors, such as SAS Institute, Inc. (Cary, North
Carolina), StataCorp LP (College Station, Texas), and SPSS Inc. (a subsidiary of IBM,
based in Chicago, Illinois), market a suite of general and specialized statistical software
computer programs, branded under such names as SAS, Stata, and SPSS. Spreadsheet
applications such as Microsoft Excel (Microsoft Corporation, Redmond, Washington) are
also commonly used for statistical analysis
• There are also dozens of other statistical software products used for HSR purposes. For
example, SUDAAN (RTI International, Research Triangle Park, North Carolina) is a well-
known software product used for the analysis of complex survey, clustered or other
correlated data.
Importance:
• Improved public health reporting and surveillance
• Chronic and communicable disease prevention
• Data exchange with community providers, labs, pharmacies and health information
exchanges (HIEs)
• Increased efficiency
• Integrated, coordinated and improved care
Free Public Health Software Programs
• Epi Inf Epi Info is a complete system for word processing, data entry, database
management, analysis, and public health statistics. Facilities are provided for importing
and exporting a variety of file types. It is easy to use for epidemiologic investigations. Epi
Info is produced by the Centers for Disease Control (CDC)and the World Health
Organization (WHO). Contains EpiMap for making maps and for combining data sets
with maps.
• EpiSurv is a generator of epidemiologic applications and health information systems. It
is ideal for surveillance as it manages large data bases, works in a network, provides
security options, produces graphics, and links with Word for printing. Data
imports/exports are rapid. Optimized indexes yield high speed analysis. A recoding
module permits detection of duplications. Texts are in French.
• EpiData is a comprehensive yet simple tool for documented data entry but NOT for
analysis. EpiData is free and currently developed for Windows 95/98/NT/2000. (Works
on PowerMac with emulator)
• Electronic Mass Casualty Assessment & Planning Scenarios (EMCAPS) can model
disaster scenarios for drill planning and to use as an education resource. The EMCAPS
Model allows you to estimate casualties from biological (Anthrax, Plague, Food

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 Contamination), chemical (blister, nerve and toxic agents) radiological (dirty bomb) or
explosive (IED) attacks, based on the
• Electronic Preventive Services Selector (ePSS) is a quick hands-on tool designed to help
primary care clinicians identify the screening, counseling, and preventive medication
services that are appropriate for their patients. The ePSS is available both as a PDA
application and a web-based tool
• CoCASA: Comprehensive Clinic Assessment Software Application is a tool for assessing
immunization practices within a clinic, private practice, or any other environment
where immunizations are provided. It has data entry and import capabilities. After
immunization data have been entered, analysis can pinpoint strengths and areas of
improvement for an individual immunization provider.
• LOGISTICS SUPPORT SYSTEM (SSL) can improve the management of humanitarian aid
in emergencies, by strengthening the national capacity to manage effectively the
humanitarian supplies, bringing them to the affected people in an adequate and
convenient way. Setting up the LSS system in emergency situations will enable reports
to be prepared that can be shared with donors, authorities in a disaster - stricken
country, humanitarian agencies and the media.
• IMPS: Integrated Microcomputer Processing System performs the major tasks in survey
and census data processing: data entry, data editing, tabulation, data dissemination,
statistical analysis and data capture control which can be used as a complete processing
system or as stand-alone modules
• CSPro (Census and Survey Processing System) is a public-domain software package for
entering, tabulating and mapping census and survey data.
• Household Registration System (HRS) is a computer system for the automated
generation of database software for longitudinal survival studies developed by the
Population Council has developed the Household Registration System
5.3: Use of SPSS in Computer
What is SPSS?

 “Statistical Package for the Social Sciences”

 It is a software used for data analysis in business research. Can be used for:
o Processing Questionnaires
o Reporting in Tables and Graphs
o Analyzing: Means, Chi-square, Regression, and much more.

About SPSS Incorporated

 SPSS Inc. is a leading worldwide provider of predictive analytics software and solutions.
 Founded in 1968, today SPSS has more than 250,000 customers worldwide, served by
more than 1,200 employees in 60 countries.
 SPSS is now owned by IBM
 It is also known by the name PASW (Predictive Analytics Software)
Ownership history

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  Between 2009 and 2010, the premier vendor for SPSS was called PASW (Predictive
Analytics Software) Statistics. The company announced on July 28, 2009 that it was
being acquired by IBM for US$1.2 billion.
 IBM SPSS is now fully integrated into the IBM Corporation, and is one of the brands
under IBM Software Group's Business Analytics Portfolio, together with IBM Cognos.
We already know that a Research Process consists of:

 Problem definition
 Research objectives
 Desk Research
 Field Research
o Qualitative
o Quantitative: constructing a questionnaire
 Collecting and Analyzing data
 Writing and Presenting the final research report
SPSS comes into picture after data has been collected by let's say: questionnaires
Translate the Questionnaire into codes and enter data in SPSS
Questions in the questionnaire are mapped into Variables in SPSS

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 5.4: Use of Epi- data in Computer

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 Epi Data has two parts:
• Epi data Entry – used for simple or programmed data entry and data documentation. It
handles simple forms or related systems
• Epi Data Analysis – performs basic statistical analysis, graphs, and comprehensive data
management, such as recoding data, label values and variables, and basic statistics. This
application can create control charts, such as pareto charts or p-charts, and many other
methods to visualize and describe statistical data.
• (Epi-Data does not contain any complex data analysis functions but data may be
exported to a variety of common formats.
• (Epi-Data use the same file format as EpiInfo version 6.xx (a popular MSDOS-based
program widely used by field epidemiologists).

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 • Any program that can read EpiInfo version 6.xx data (.REC) files may also be used to
analyze data entered using (Epi-Data).
• And numerous add-in programs that perform logistic regression, conditional logistic
regression, and survival analysis.
• Basic data analysis functions may be added to subsequent versions of Epi-Data.
Data

Defining database file structure

Variables
In Epi-Data variable names:
• Must not exceed eight characters
• Must begin with a letter, not a number
• Can otherwise contain any sequence of letters and digits

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 • Must not contain any spaces or punctuation marks
Epi data provides many different variable types

• Statistical procedures such as ANOVA, Regression and Correlation will only work with
data stored in numeric variables.
• Boolean, Logical, or Yes/No variables hold a special type of categorical data. Some
investigators prefer to use numeric variables to hold categorical data. Categories are
given numeric codes. Data coded in this way may be easier to use with statistical
packages and with some statistical procedures
Defining Variables and Length
• Numeric variables are defined using the # character. A variable defined as # # # can
hold three digits.
• Text variables are defined using the underline_ character. UPPER CASE TEXT variables
are defined by enclosing an upper case A within angle brackets. E.g.

 Logical variables are defined by enclosing an upper case Y between angle brackets (i.e.
<Y>).
 Epi-Data handles missing data automatically. Any field that is left empty at data-entry or
uses missing data in calculations receives a special missing data code (. = missing).

5.5: Use of end note

End-Note is a commercial reference management software package, used to
manage bibliographies and references when writing essays and articles.
What Is EndNote?
EndNote is a bibliographic management software program designed to help individuals store,
organize, cite and format bibliographic references.

 No more writing out and organizing citations by hand.

 Store all your references, PDF articles, tables, images, & charts in one place.

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  No more consulting a style manual every 5 minutes when you’re writing a research
paper or manuscript.
What Can EndNote Do for You?
• Organize references including table, charts, & pictures in 1 place
• Import or search for references from many databases, including Ovid Medline and
PubMed
• Easily create & format bibliographies sorted by author, year, subject, or any other term
you specify
• Properly cite and create reference lists of articles, pictures, tables, etc. in Word
documents or other word processors using EndNote’s CWYW feature
Select & Export References Directly to EndNote from a Database like Ovid Medline

Search PubMed from EndNote & Directly Download Results

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 Cite While You Write (CWYW)

5.6: Use of different referencing style

Why Reference?
Your benefit
• To show off!
• To add authority to your argument
• To add credibility to your information
Reader’s benefit
• To understand the context of your work
• To allow your reader to track down your research
Ethical reasons
• Intellectual integrity
• To distinguish between:
– Your ideas
– Someone else’s ideas
• Intellectual property issues
What should be referenced?
• Ideas, information, results, opinions from any source that you have summarised,
paraphrased or directly quoted
• Definitions of terms

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 • Illustrations, tables, figures drawn from sources
• Your ideas that are also those of an author you have read
• Plans, ideas or anything that was stimulated by others

Guiding principles
• Respect the
– Creation of ideas by others
– Concept of intellectual property
• Acknowledge the ideas of others
But,
• Don’t reference “common knowledge”
What is common knowledge?
As general rules of thumb:
• If you didn’t know it before you read the research, then it is not common knowledge and
you need to reference it.
• If most classmates would know it then it probably is common knowledge.
Referencing

 A referencing style is a specific format for presenting intext references (footnotes or

endnotes), and bibliography.
 It is an act of referring.
Reference:

 The action of mentioning or alluding to something or,

 The use of a source of information in order to ascertain something.
Why to reference

 Proves that substantial research has been done to support our analysis.
 Enables others to follow up on our work.
 Gives credit to other people's work.
 Avoids charges of plagiarism.
 Required to support all significant statements.
 Used to indicate the origin of material & source for research & further reading.
Types of references

 Journal Reference
 Book Reference
 Internet Reference Reference Elements
 Authors name
 Article title

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  Journal name
 Year
 Volume
 Page numbers
Different styles of writing references
1. Harvard style of referencing.
2. American Psychological Association style (APA)
3. Vancouver style.
4. MLA citation style (modern language association).
5. The Chicago manual of style.
6. Royal society of chemistry style.

Harvard style of referencing

 Author’s name followed by its initials.

 Year of publication.
 Article title with single quotation mark followed by full stop.
 Name of Journal in italic form.
 Volume followed by a comma
 Issue no. in bracket.
 Page no.
Example
1. Padda, J. (2003) ‘creative writing in coventry'. Journal of writing studies 3 (2), 44-59.
2. Lennernas, H. (1995) ‘Experimental estimation of the effective unstirred water layer
thickness in the human jejunum & its importance in oral drug absorption’. Eur. J. pharm sci (3),
247-253.
Vancouver style

 Author Surname followed by Initials.

 Title of article followed by double quotation.
 Title of journal (abbreviated).
 Date of Publication followed by double quotation.
 Volume Number.
 Issue Number in bracket.
 Page Number.
Example
1. Haas AN, Susin C, Albandar JM, et al. Azithromycin as a adjunctive treatment of aggressive
periodontitis: 12-months randomized clinical trial. N Engl J Med. 2008 Aug; 35(8):696-704.
Vancouver Style does not use the full journal name, only the commonlyused abbreviation: “New
England Journal of Medicine” is cited as “N Engl J Med”.
MLA citation style (modern language association)

 Authors name.

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  Title of article.
 Name of journal.
 Volume number followed by decimal & issue no.
 Year of publication.
 Page numbers.
 Medium of publication.
Example
1. Matarrita-Cascante, David. "Beyond Growth: Reaching Tourism-Led Development." Annals of
Tourism Research 37.4 (2010): 1141-63. Print

American Psychological Association style

 Author’s name followed by its initials.

 Year of publication.
 Article title followed by full stop.
 Name of Journal in italic form
 Volume followed by a comma
 Page no.
Example
1. Alibali, M. W., Phillips, K. M., & Fischer, A. D. (2009). Learning new problem-solving strategies
leads to changes in problem representation. Cognitive Development, 24, 89-101.
The Chicago manual of style

 Name of author.
 Article title in double quotation mark.
 Title of journal in italic.
 Volume.
 Year of publication.
 Page no.
Example 1. Joshua I. Weinstein, “The Market in Plato’s ” Classical Philology, 104 (2009): 440.
Royal society of chemistry style

 INITIALS. Author’s surname.

 Title of journal (abbreviated).
 Year of publication.
 Volume number.
 Pages no.
Example
H. Yano, K. Abe, M. Nogi, A. N. Nakagaito, J. Mater. Sci., 2010, 45, 1–33.
Differences
• Bibliography- a separate list of sources we have consulted but not specifically cited in
our work including background reading. It is arranged alphabetically by the author's
surname.

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 • Reference list- a list of sources we have cited in our text arranged in the order they
appeared within the text. It is usually put at the end of our work but it can also appear as
a footnote (at the bottom of the page), or endnote (at the end of each chapter) which
serves a similar purpose.

Conclusion

 We conclude that there are many standard style used for referencing, we can use any
one of them.
 It gives us a standard format of presenting or reference.
 Supports or significant statement and helps to know origin of work.
 Plagiarism can be avoided.

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 UNIT 6: INFORMATICS
6.1: Understanding the health informatics, definition, scope, uses and importance
Why Health Informatics?

 Health Informatics provides information to make decisions

 Better information leads to better decisions
 Health care, management, planning and policy all need good information
Health Informatics

 The intersection of information science, computer science, and health care.

 It deals with the resources, devices and methods required to optimize the acquisition,
storage, retrieval and use of information in health.

 Public health informatics is the systematic application of information, computer science,

and technology to public health practice, research, and learning

 PHI could be considered one of the most useful systems in addressing disease
surveillance, epidemics, natural disasters and bioterrorism

 The disciplines involved include information science, computer science, social

science, behavioral science, management science, and others

 NLM defines health informatics as "the interdisciplinary study of the design,

development, adoption and application of IT-based innovations in healthcare services
delivery, management and planning

 Health informatics tools include amongst others computers, clinical guidelines, formal
medical terminologies, and information and communication systems
Tools

 Health informatics tools include not only computers but also clinical guidelines, formal
medical terminologies, and information and communication systems.
CDC Health Informatics

 CDC's National Center for Public Health Informatics (NCPHI) provides leadership in the
application of information and computer science and technology to public health
practice, research, and learning.
o Electronic health record support of public health functions
o Use of health care, population and other public health data in supporting public
health systems and analyses
o Basic capabilities that support public health practice such as statistical and
health surveillance
o Public Health decision support
eHealth

 eHealth is a broad term for healthcare practice which is supported by electronic

processes and communication.

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  The term can encompass a range of services that are at the edge of medicine/healthcare
and information technology.
mHealth

 Mobile Health
 Mobile technologies such as mobile phones to collect and access health information.

Informatics ≠ IT

 Information Technology is not Informatics

 Information technology is hardware & software.
o IT is to nouns, as informatics is to verbs.
o Informatics helps IT ‘work appropriately.’
Key Elements of Informatics

 Acquisition
 Storage
 Communication
 Manipulation
 Display
Health Information Systems Context

Health Informatics Principles

 Use drives data

 Interoperability using open standards

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  Incremental development and strengthening of systems
 Enterprise Architecture approach
 Collaborative Communities
Creative acts people in Informatics do…
• Formulate models for acquiring, representing, processing, displaying or transmitting
health information or knowledge
• Develop computer systems that use the models to deliver the information or knowledge
• Install information technology systems to support the models
• Assess outcomes regarding the effects to the overall health care system
Public Health Workforce and Informatics
• Use of information (per se) for professional effectiveness
• Use of information technology for personal effectiveness
• Development of information systems to improve the effectiveness of the public health
enterprise
Public Health Informatics Needed approach
• Multidisciplinary/collaborative
• Systematic
• Applied
• Integrated
• Management
• Project
• Change
Public Health Informatics:
Applications not Public Health Specific:
• Electronic Data Collection
• Collaborative tools
• Geographic Information Systems (GIS)
• Data Visualization tools
• Knowledge Management Systems (KMS)
• Electronic Health Record (EHR)
• Decision Support Systems
Applications Specific to Public Health
• Registries

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 • Electronic Lab Reporting
• Electronic Disease Surveillance
• Early Event Detection
• Program Monitoring and Evaluation
Public Health Information Network

Three Ways Health Informatics Impacts

1. Improved Outcomes
• To improve the quality and safety of care.
• The majority of physicians believe that electronic medical records provide a better view
of their patients’ total health – allowing for better diagnoses while reducing the chance
of medical errors.
• Physicians also cite improved efficiencies within their practices, which in turn translates
to an enhanced patient experience. The automation of previously manual tasks saves
time and money for physicians, insurers and patients alike.
2. Patient Participation
• Patients are empowered to play an active role in their health.
• This is especially important for people who suffer from chronic illnesses like diabetes,
asthma, obesity and cardiac conditions.
• Patients can monitor their medication usage and engage in dialogue with their doctors
for help in making the right healthcare choices.

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 • Patients whose healthcare providers do not offer a portal for retrieving health records
can instead use any of a number of web sites or apps to track their own information. It’s
been said that “knowledge is power” and there is nothing more powerful than good
health.
3. Public Health
• Greater access to data can be used to improve healthcare on a larger scale.
• Providers can look for trends in disease management, drug efficacy, and other factors
within their own patient population, while researchers can use the data for broader
application.
• Public health informatics can help control the spread of disease and improve
preparedness during an outbreak, such as with the flu or a food-borne illness. Data can
also help public health organizations put preventive plans in place, watch for changes in
a certain geography or demographic, or otherwise report information of interest or
concern to the overall populace.

6.2: Bioinformatics- Introduction, types and application

What is Bioinformatics?
• Bioinformatics is the use of computers for the acquisition, management, and analysis of
biological information.
• It incorporates elements of molecular biology, computational biology, database
computing, and the Internet…
• … bioinformatics is clearly a multi-disciplinary field including: computer systems
management networking, database design, computer programming, molecular biology
• Term Bioinformatics was invented by Paulien Hogeweg and Ben Hesper in 1970 as "the
study of informatic processes in biotic systems
• Paulien Hogeweg was a biologist and complex systems researcher
Bio-informatics

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 Bioinformatics has many definitions
• … the study of how information is represented and analyzed in biological systems,
starting at the molecular level … concerned with understanding how basic biological
systems conspire to create molecules, organelles, living cells, organs, and entire
organisms
• application of tools of computation and analysis to the capture and interpretation of
biological data.

Bioinformatics are essential to many nonmedical applications

1. Energy and environment
• New energy sources: bio fuels
• Pollutant detection
• Climate change
• Carbon sequestration
2. Agriculture
• Crops resistant to drought
• and insects
• More nutritious products
• Bio pesticides
3. Risk assessment & mitigation

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 • Waste cleanup Explore the properties of the bacteria Deinococcus radiodurans for clean
up of hazardous waste sites
• Reduce likelihood of heritable
• Mutations
4. Forensic science
• DNA: Detect criminals by analysis of DNA in crime scenes
• Mass spectrometry

Bioinformatics & Molecular Medicine

 Early detection of genetic predispositions to diseases

 Improved diagnosis of disease
 Pharmacogenomics
o Customized drugs
o Individualized drugs selection
o Better methods for determining drug doses for individuals
o Appropriate doses determination
 Gene therapy and control systems for drugs

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 The Differences?
• Although Medical Informatics and Bioinformatics both exploit computers and
computational tools, they differ in many ways.
• Arguably, these differences are due to diversity in the domain expertise of the
practitioners (medicine vs. biology) and researchers involved in the application field
(healthcare professionals vs. bioscientists) and the educational emphasis adopted by the
independent disciplines (patient-care vs basic-research).
eMERGE
• The eMERGE (Electronic Medical Records and Genomics) Network is a five-member
consortium formed to develop, disseminate, and apply approaches to research that
combine DNA bio-repositories with electronic medical record (EMR) systems for large-
scale, high-throughput genetic research.
6.3: Medical terminologies, nomenclatures, coding and classification system
Medical terminologies

 The words – or terms – which make up the language of medicine are referred to as the
terminology of the medical field…known as medical terminology.
 Like every other language, medical terminology has changed over time and will continue
to change.
 Most medical terms come from the Greek and Latin languages.
How It Works

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  Most medical terms can be broken down into parts like a sentence.
 Common word parts/components:
o Prefixes / Roots or Words / Suffixes
 Linking or combining vowel usually “o”, but occasionally “e” or “i”
 The medical terms will contain one or more of these components.
Prefix

 A prefix is a word component placed in front of a root/word to change or modify its

meaning.
 A prefix can give a root direction or position. It can also give a root a specific type/
classification, quality, or quantity.
Common Prefixes

 Ab- away from midline

 Acu- needle
 Anti- against
 Auto- self
 Bi- two, both, double
 Dys- abnormal, bad, painful
 Hemi- half
 Hetero- opposite, different 6
 Homo- same, similar
 Hyster- uterus
 Men- menstruation
 Quadri- four
 Re- back, again
 Super- above, beyond
 Tri- three
 A-, An- without, none
 Ad- toward/near midline
 Acro- extremities
 Ambi- on both sides
 Bio- life
 Brady- slow
 Circum- around, encircling
 Contra- against
 Dys- difficult, painful, bad, abnormal
 Endo- within 7
 Epi- upon, over, above
 Ex- out, out of
 Hyper- excessive, above, too much, over, beyond
 Hypo- less than, under, below, deficient
 Hydro- fluid, water
 Inter- between
 Intra- within
 Iso- equal
 Mal- ill, bad
 Meta- after, beyond, change

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  Multi- many, more than one
 Neo- new or abnormal 8
 Poly- many, much
 Post- after, behind
 Pro- before, in front of, forward
 Retro- behind, backward
 Sub- under, below, beneath
 Supra- above, on the top side
 Tachy- fast
 Trans- across, over
Suffix
A suffix is a word component added to the end of a root/word that changes or modifies its
usage, function, or meaning.
Suffixes: Surgical Procedures

 centesis – to puncture/tap to draw fluid from

 desis – surgical fixation, fusion
 ectomy – excision, removal, cut out
 pexy - fixation
 plasty – surgical repair, correction
 rrhaphy – suture
 sect – to cut
 stomy – forming a new opening
 tome – instrument for cutting
 tomy – incision into, cut into
 tripsy – to crush, break down
 puncture – to pierce a surface

SUFFIXES: diagnostic procedures

 assay – examine, analyze

 gram – written record, recording
 graph – instrument for recording
 graphy – process of recording
 manometer – instrument for measuring pressure
 manometry – process of measuring pressure
 meter – instrument for measuring
 metery – process of measuring
 opsy – to view
 scope - instrument for examining
 scopy – process of examining, examination
Root

 A root is the basic element of a word, and it is the foundation on which the meaning of a
word is built.

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  Many roots are real words in their own right and term. Although these roots can have
other elements, they don't need other elements to be complete.
 A root can be a whole word or a part of a word. Roots come from many different
languages, mainly Greek and Latin, and find their way into English.
Rules!

 To define medical terms, divide or slash them into their component parts; these word
components are called prefixes, suffixes, and roots.
 Use the hyphen ( - ) after the word component to indicate that it is a prefix; use it after
the combining form to indicate that it needs a suffix; use it before the word component
to indicate it is a suffix.
 For example: Epi-gastr/o/-cele
More Rules

 Use the combining vowel “o” when a suffix begins with a consonant. i.e Termin/o/logy.
 Use the combining vowel “o” when combining two roots only if the second root begins
with a consonant. i.e. Pneum/o/thorax.
 Do not use the combining vowel “o” if you are combining a second root that begins with
a vowel or a suffix that begins with a vowel (a, e, i, o, u, and sometimes y). i.e.
Pneum/arthr/osis
 Add –y to a word to indicate a procedure (gastroscopy) or –ly to indicate an act or
process (splenomegaly).
And More Rules!!

 The suffix –osis always denotes a condition (usually abnormal). When combined with
the color roots erythr/o- (red) and leuk/o- (white), it represents a condition of
abnormally increased blood cells.
 Most of the time, word components denoting color are used as prefixes. However,
sometimes they are the root of the medical term.
ROOTS: Colors

 Alb/o, Albin/o, Leuk/o – white

 Chlor/o – green
 Cirrh/o – orange-yellow
 Cyan/o – blue Eosin/o
 Erythr/o, Rhod/o, Rose/o, Rubr/i/o – red, rosy
 Flav/o, Jaund/o, Lute/o, Xanth/o – yellow
 Fusc/o – dark brown
 Glauc/o – gray, bluish greenan/o – black
 Poli/o, Tephr/o – gray, ashen
 Purpur/i - purple
The body

 BLOOD
 CARDIOVASCULAR
 ENDOCRINE
 GASTROINTESTINAL
 INTEGUMENTARY

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  LYMPHATIC/IMMUNE
 MUSCULAR
 NERVOUS
 REPRODUCTIVE – FEMALE
 REPRODUCTIVE – MALE
 RESPIRATORY
 SENSES (5)
 SKELETAL
 URINARY
Putting it all together
1. Hem/o/lysis: Blood breakdown
2. Hyper/kal/emia: Excess potassium in the blood
3. Thromb/o/pheresis: Clot removal
4. Hyp/o/volemia: Low blood volume
5. Erythr/o/cyte: Red blood cell
6. Phleb/it is: Vein inflammation
7. Hemat/o/logy: Study of blood

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 Difference

Coding

 A code is a sequence of symbols which refers to a concept and which can be used for
identification and selection.
 A code is a simple representation (or label) given to a concept that allows it to be
processed within an information system.
 Coding is needed because there are so many ways that a clinical concept can be
represented. For example, a patient with coronary heart disease can be represented or
implied by any of the following free text labels:
 ‘diagnosis of myocardial infarction’, ‘raised cardiac
 Enzymes’, ‘myocardial ischemia’, ‘triple vessel coronary
 Artery disease’, ‘three vessel coronary artery bypass grafting’ and so on.
Types of Codes
• Significant
– Mnemonic
– Juxtaposition
– Hierarchical
• Non-significant / context free
– Random
– Sequential

Mnemonic Codes
• Formed from one or more of the characters of its related class

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 – M = Male, F = Female
– KL204 = KLM flight 204
Juxtaposition Codes
• Composite codes consisting of segments
• Room J-1B-115 (Building, Floor, Location)
Hierarchical Codes
Example from ICD-9-cm:
• 003 Other Salmonella Infections
– 003.0 Salmonella Gastroenteritis
– 003.1 Salmonella Septicemia
– 003.2 Localized Salmonella Infections
• 003.20 Localized Salmonella Infection, unspecified
• 003.21 Salmonella Meningitis
• 003.22 Salmonella Pneumonia
• Aggregation, retrieval on different levels
Reasons for using significant codes
• Codes can be remembered
• Meaning can be derived from code
• (Juxtaposition and hierarchical) codes can be used for aggregation
Non-significant codes
• Random: pick any (unique) number
• Sequential: number consecutively, e.g., start by 1 and increase
• Such meaningless codes should NOT be presented to users
Classification System
• Classifications provide a method of ordering information within a defined area or
domain. For example, all the circulatory diseases in
• The Read system start with the letter G, and all operations with the number 7.
• The World Health Organization’s (WHO) International Classification of Disease (ICD) is
perhaps the best known classification.
• A terminology should provide comprehensive labelling of all the concepts within a
domain.
Classification example: Biology African Elephant Taxonomy
• Kingdom: Animal

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 • Phylum: Chordata / Craniata / Vertebrata
• Class: Mammalia / Theria / Eutheria / Afrotheria
• Order: Proboscidea
• Family: Elephantidae
• Genus: Loxodonta (African elephants)
• Species: Loxodonta africana
Classification “Chapters” ICD-10 (1)
• Certain Infectious and parasitic diseases
• Neoplasms
• Diseases of the blood and blood forming organs and certain disorders involving the
immune mechanism
• Endocrine, nutritional and metabolic diseases
• Mental and behavioral disorders
• Diseases of the nervous system
• Diseases of the eye and adnexa
Classification “Chapters” ICD-10 (2)
• Diseases of the ear and mastoid process
• Diseases of the circulatory system
• Diseases of the respiratory system
• Diseases of the digestive system
• Diseases of the skin and subcutaneous tissue
• Diseases of the musculoskeletal system and connective system
• Diseases of the genitourinary system

6.4:Telemedicine: Introduction, scope, uses, application, importance to provide health

service in rural Nepal, Case study of telemedicine in Nepal and its merits and demerits,
role of telemedicine in PHC
Introduction

 Telemedicine is a rapidly developing application of clinical medicine where medical

information is transferred through the phone or the Internet and sometimes other
networks for the purpose of consulting, and sometimes remote medical procedures or
examinations.
 Telemedicine may be as simple as two health professionals discussing a caseover the
telephone, or as complex as using satellite technology and videoconferencing equipment

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 to conduct a real-time consultation between medical specialists in two different
countries.
 Telemedicine generally refers to the use of communications and information
technologies for the delivery of clinical care.

 Telecommunication technology + Medicine : Telemedicine

 The use of electronic information and communication technologies to provide and

support health care when distance separates the participants.
Telemedicine: Scope

When do we use telemedicine?

• Improved Access
• Covers previously unserved or underserved areas.
• Improved quality of care
• Enhanced decision making through collaborative efforts.
• Reduced isolation of healthcare professionals
• Peer and professional contacts for patient consultations and
• Continuing education.
• Reduced costs
• Decreased necessity for travel and optimum uses of resources
Applications of Telemedicine
1. Remote Consultation
2. Remote Monitoring
3. Remote Education

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 4. Tele-mentoring

1. Remote Consultation

2. Remote Monitoring

3. Remote Education and Collaboration

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 4. Tele-mentoring

 Telemedicine is mere vehicle that permit the delivery of health care services.
 It is the content of the vehicle that permits effective health care, not the vehicle.
Benefits/Importance of Telemedicine Services
1. Telemedicine increases access to HealthCare.
2. Telemedicine Improves health outcomes.
3. Telemedicine reduces HealthCare & other costs.
4. Telemedicine assists in addressing shortages of HealthCare providers.
5. Telehealth supports clinical education programs
1. Telemedicine increases access to HealthCare

 Rural patients can more easily obtain specialty services.

 Rural patients can stay in their local communities and not travel long distances.
 Rural hospitals can provide a variety of specialty services to include, stroke, trauma, and
intensive care services.
 Specialists and other healthcare providers are able to expand their “reach” through
telemedicine.
2. Telemedicine Improves health outcomes

 Patients can be diagnosed and treated earlier which can contribute to improved outcomes
and less costly treatments.
 Patients with telemedicine supported ICU’s experience reduced mortality rates, reduced
complications, and reduced hospital stays.

3. Telemedicine reduces HealthCare & other costs

 Specialists “team up” with local healthcare providers to improve disease management and
improved disease management reduces complications and hospitalizations.
 Nursing Home Telemedicine reduces costly transports and unnecessary ED visits.
 High cost patient transfers for stroke and other emergencies are reduced.
 Home monitoring programs can reduce high cost hospital visits.
 Transportation savings to patients who would otherwise need to commute to an urban
location.

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  Missed work income savings to patients who would otherwise need to commute to an
urban location.
4. Telemedicine assists in addressing shortages of HealthCare providers.

 Specialists and other healthcare providers can serve patients in remote, underserved
areas using telemedicine.
 School based Telehealth allows school nurses and other healthcare providers to serve
more students at more locations.
 Specialists and other healthcare providers can serve patients in remote, underserved
areas using telemedicine.
 School based Telehealth allows school nurses and other healthcare providers to serve
more students at more locations.
5. Telehealth supports clinical education programs

 Rural healthcare providers can more easily obtain continuing education.

 Rural clinicians can more easily consult with specialists.
Merits of Telemedicine:
• Providing healthcare services via telemedicine offers many advantages. It can make
specialty care more accessible to underserved rural and urban populations.
• Video consultations from a rural clinic to a specialist can alleviate prohibitive travel and
associated costs for patients.
• Video conferencing also opens up new possibilities for continuing education or training
for isolated or rural health practitioners, who may not be able to leave a rural practice to
take part in professional meetings or educational opportunities.
• The use of telemedicine can also cut costs of medical care for those in rural areas.
Demerits to Telemedicine:
• High cost of infrastructure and hardware
• Lack of standards
• Confidentiality concerns
• Complex liability issues (for example, where would a law suit be filed?)
• Lack of guidelines for credential physicians
• Potential strain on physician-patient relationship
• Questions about image fidelity and context
• Poorly designed systems: Lack of appropriate telecommunications technology. Regular
telephone lines do not supply adequate bandwidth for most telemedical applications.
• Limited bandwidth: Many rural areas still do not have cable wiring or other kinds of
high bandwidth telecommunications access required for more sophisticated uses.
Role of Telemedicine in PHC

 Equitable distribution

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  Appropriate technology
 Inter-sectoral co-operation
6.5: GIS and GPS- Introduction, application on public health and difference between them,
Uses of them in disaster management.
GIS (Geographic Information System)

 Is a system designed to capture, store, manipulate, analyze, manage, and present spatial
or geographic data.
 GIS is a broad term that can refer to a number of different technologies, processes, and
methods.
 GIS is a software program that helps people use the information that is collected from
the GPS satellites.
What is GIS?

 Geographical Information Systems (GIS) are a special class of information systems that
keep track not only of events, activities, and things, but also of where these events,
activities, and things happen or exist.

 GIS Information systems help us to manage what we know, by making easy to organise
and store, access and retrieve, manipulate and synthesize, and apply knowledge to the
solution of problems.

 A Geographic Information System is not only about computers, software and electronic
data.
o Hardware
o Software
o Network
o Data
o Procedures
o And people

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  There are a number of Geographical Information Systems (GIS) (or GIS software)
available today. They range from high-powered analytical software to visual web
applications, and each of those are used for a different purpose.
o Web-based GIS: ONS and London Profile
o Geobrowser: Google Earth
o Desktop GIS: ArcGIS

GIS: Application in Public Health

 Public health is another focus area that has made increasing use of GIS techniques.
 Public health efforts have been based on analysis and use of spatial data for many years.
 Dr. John Snow (physician), often credited as the father of epidemiology, is arguably the
most famous of those examples.
 Dr. Snow used a hand-drawn map to analyze the geographic locations of deaths related to
cholera in London in the mid-1850s.His map, which superimposed the locations of
cholera deaths with those of public water supplies, pinpointed the Broad Street pump as
the most likely source of the cholera outbreak. Removal of the pump handle led to a rapid
decline in the incidence of cholera, helping the medical community to eventually conclude
that cholera was a water-borne disease.
 Dr. Snow's work provides an indication of how a GIS could benefit public health
investigations and other research. He continued to analyze his data, eventually showing
that the incidence rate of cholera was also related to local elevation as well as soil type
and alkalinity.
 Disease diffusion mapping, an area of study based on the idea that a disease starts from
some source or central point and then spreads throughout the local area according to
patterns and conditions there.
 Public health informatics (PHI) is an emerging specialty which focuses on the application
of information science and technology to public health practice and research. Correction
of human-generated mistakes and miscoding.
GPS (Global Positioning System)

 Also known as Navstar GPS or simply Navstar, is a Global Navigation Satellite System
(GNSS) that provides geolocation and time information to a GPS receiver in all weather
conditions, anywhere on or near the Earth where there is an unobstructed line of sight to
four or more GPS satellites.

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  GPS uses satellites that orbit Earth to send information to GPS receivers that are on the
ground, the information helps people to determine their location.
Global Navigation Satellite System (GNSS)

 GLONASS – Russia's global navigation system. Fully operational worldwide.

 Galileo – A global system being developed by the European Union and other partner
countries.

 Beidou – People's Republic of China's regional system, currently limited to Asia and the
West Pacific.

 IRNSS (NAVIC) – India's regional navigation system, covering India and Northern Indian
Ocean.

 QZSS – Japanese regional system covering Asia and Oceania

History of GPS

 Developed by US Department of Defense

 1969—Defense Navigation Satellite System (DNSS) formed

 1973—NAVSTAR Global Positioning System developed

 1978—First 4 satellites launched

 1993—24th satellite launched; initial

operational capability

 1995—full operational capability

 May 2000—Military accuracy available to all users

Satellites

 There are quite a number of satellites out there in space.

 They are used for a wide range of purposes: satellite TV, cellular phones, military
purposes and etc. Satellites can also be used by GPS receivers.

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 GPS Satellites

 The GPS Operational Constellation consists of 32 satellites that orbit the Earth in very
precise orbits twice a day. GPS satellites emit continuous navigation signals.

Applications

 Civilian
o Geotagging : Applying location coordinates to digital objects such as photographs
and other documents.
o Disaster Relief/Emergency Services
o Vehicle Tracking Systems
o Person Tracking Systems
o GPS Aircraft Tracking
o Telematics: GPS technology integrated with computers and mobile
communications technology in automotive navigation systems.

 Military
o Target Tracking: Tracking potential ground and air targets before flagging them
as hostile.
o Navigation
o Missile and Projectile Guidance: Allows accurate targeting of various military
weapons including cruise missiles and precision-guided munitions
o Reconnaissance
o Search and Rescue: Downed pilots can be located faster if their position is known.

 Other Applications
o Railroad Systems
o Recreational Activities
o Weather Prediction
o Skydiving
o And many more!

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 GPS : Application in Public Health

 Disaster relief

 Emergency services

 Tracking systems
GIS and GPS: Difference

 Global Positioning System (GPS): A satellite system that projects information to GPS
receivers on the ground, enabling users to determine latitude and longitude coordinates.

 Global Information System (GIS): Software program that enable users to store and
manipulate large amounts of data from GPS and other sources.

Examples of GPS and GIS

 Global Positioning System (GPS): A public health expert may use a handheld GPS
receiver to determine the latitude and longitude coordinates of a water source near a
defined community.

 Global Information System (GIS): Following a chemical spill, maps obtained from a GIS
system can reveal environmentally-sensitive areas that should be protected during
response and recovery phases.
GPS data gathering

 Depending on the make and model of the unit, the number of satellites available, and the
quality of (unobstructed) signals, GPS receivers can collect information such as

 Latitude and longitude coordinates (time-in-place or point location

 “Real Time” position (calculated while farm equipment is moving)

 Elevation (if 4 or more satellites are used)

GIS
With GIS software, information from a GPS unit

 Topographical map
 Digital elevation models
 Critical infrastructure maps
 Aerial photography
 Cropland use
 Census maps
The Result:
“Layered” maps can be generated by the GIS software. May be combined with data such as

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