Ethiopian Federal Agency Deploys ERP to Overhaul $1 Billion Drug Supply Chain

Ethiopia’s federal agency responsible for supplying pharmaceuticals and medical equipment to health institutions has deployed an Enterprise Resource Planning (ERP) system to streamline its operations.

The Ethiopian Pharmaceuticals Supply Service (EPSS), began implementing the ERP software last week and aims to make the drug supply chain data-driven and align supply with demand.

With a revolving fund of one billion dollars, EPSS supplies 1,200 medicines and medical devices to 5,000 public health institutions on both credit and cash bases. Its previous operations have faced challenges, with health institutions failing to repay hundreds of millions of birr for supplies taken on credit.

“ERP technology is critical for making the drug supply chain transparent and accessible, as well as for standardizing the previously fragmented system,” says Awol Hassen, Communication Director of EPSS.

“The plan has been in place for over ten years and has finally been implemented due to the management’s dedication to digitization,” he adds.

“We secured a fund of nine million dollars for the system’s implementation,” says Awol. He further explained that the MOU between SEIDOR, the private firm that developed the ERP, and the EPSS was signed eighteen months ago by former Minister of Health Lia Tadesse (PhD).

SEIDOR is a consulting firm specializing in technology services and solutions. The company’s website says it has a presence in 45 countries.

“We have been using systems like HCMIS, VITAS, and SAGE for financial activities previously,” says Awol. “But these software systems were not integrated, so our quality and productivity were poor.” According to the communication director, the newly implemented system integrates a total of nineteen branches nationwide.

“The system has twenty features that help the company supply and operate,” says Awol. He further explains that EPSS is currently implementing eleven of the features and plans to add nine more in the coming years.

One feature currently implemented is F to F (store to ship). “Pharmaceutical warehouses are not like other warehouses; they need special features and specifications,” he says. This feature will help employees register items using bar codes and Radio Frequency Identification (RFID), enabling easy tracking of item conditions such as expiration dates, remaining quantities, and warehouse temperature. “Using that information, we can monitor conditions and order more or distribute to places where items are most needed,” Awol told Shega.

Another important feature, according to Awol, is plan-to-procurement (PL-to-PR). “Most of our data comes from hospitals,” says Awol. “We take data on frequently purchased items from hospitals, but the data management system at the hospitals is poor, resulting in inaccurate information. The ERP system allows the Agency to track frequently requested items and remaining stock, enabling precise demand forecasting and decision-making. 

Awol states that this new management system integrates the company’s work from sales to distribution. He adds that health institutions can use the platform to submit requests online without visiting the office. Additionally, they are working to integrate the system with Ethiopian Airlines and Shipping and Logistics for more streamlined operations.

“Currently, the system is implemented in our five offices, including three in the capital and two in Adama and Hawassa,” says Awol.