SPARE PARTS SUPPLY CHAIN STUDY FOR PIPED WATER …

SPARE PARTS SUPPLY CHAIN STUDY FOR PIPED WATER SYSTEMS

April 2017

Report byDr. Kwabena Biritwum NyarkoDr. Eugene Appiah-Effah

SPARE PARTS SUPPLY CHAIN STUDY FOR PIPED WATER SYSTEMS

Submittedby

Dr. Kwabena Biritwum NyarkoDr. Eugene Appiah-Effah

April 2017

Final Report

SPARE PARTS SUPPLY CHAIN STUDY FOR PIPED WATER SYSTEMS2

EXECUTIVE SUMMARY

ContextThe delivery of sustainable water service services require readily available spare parts for timely repairs and maintenance. Spare parts supply chain for rural water supply based on boreholes and hand pumps in Ghana has received some attention but there is a dearth of information on spare parts supply chain for community water supply relying on other technologies such as mechanised boreholes, Slow Sand filtration (SSF), Ultra violet (UV) and Ultra Filtration (UV) systems.

ObjectivesThe main objective of the study is to contribute to strengthening operational sustainability of water systems by examining the spare parts supply chain. The specific objectives covered are as follows:

» identifying spare parts outlets;

» determining the type and availability of spare parts;

» identifying repair and maintenance service providers and their operational status, capabilities and challenges

» mapping out the distribution/supply chains for spare parts in the two regions;

» identifying gaps in the spare parts supply chains/network;

» identify barriers and issues to spare parts availability and provide recommendations for improving access to spare parts and strengthening the supply chains network;

» quantify the costs of improved spare parts inventory management to water systems

Scope

The study was conducted in three (3) districts namely Biakoye and North Dayi districts in the Volta Region, and Asikuma Odoben Brakwa district in the Central Region as indicated on the map. In all a total of 24 piped water systems were assessed.

ResultsThe Private Sector is the major player in the spare parts supply chain for piped water systems. The typical spare parts supply chain identified extends from the manufacturer (International) to local distributors or wholesalers (at the national level in Accra) and to retailers (in other regional and district levels) to the maintenance service providers and finally to the end user/operators and managers of water systems at the community level. The spare parts identified from the study were classified into basic (minor) and advanced (major) (Table 2, page 13). The basic spare parts are those available within the districts where the water supply systems are located whereas the advanced spare parts are the parts available outside the district where the water supply system are located. Majority of the water system (22 out of 24) had no access to advanced

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spare parts outlet in their communities. The advanced spare parts were usually available in plumbing and other hardware shops located in major towns within the district or region or the national capital, Accra. The WSMTs had technical operators in charge of basic (minor) repairs and maintenance of water system such as sealing of leakages, replacement of taps etc. Aside the minor repairs by technical operators, some of the piped water systems had service contracts with private maintenance and service providers to undertake routine maintenance and break down maintenance. Spare parts were obtained from three main sources -operators of water systems buy spare parts either directly from the retail shops, distributors or through the assistance of private repair and maintenance service providers. The total annual expenditure on basic and advanced spare parts for a single water system ranged from GHS 1,200-2,200 and GHS 1,800-3,500 (USD 418.50-813.80) respectively. Spare parts distributors/wholesalers and retailers indicated that they usually obtained their parts mainly from France, India, China or Germany through importers. The barriers and gaps in identified in the study were (1) Individual water system operators and managers are left to purchase spare parts from any available outlet they identify on market based principles (2) There is no documented information on profile of spare parts outlet to offer customers the opportunity to buy from their preferred supplier (3) There is no known quality assurance and control of piped water system spares parts (4) There is no regulation in place to eliminate or reduce the presence of sub-standard parts, which are likely to result in reduced lifespan and increased breakdown of parts and (5) Inadequate incentives for spare parts suppliers to decentralize their distribution centres to the community level.

The study revealed the average downtime for water systems to be approximately 4 days per system per year. Improving the supply chain to reduce the downtime of each water system from 4 days to 1.5 days could lead to financial savings of USD 13,570 from 500 small towns water systems in Ghana. If the cost of improving the supply chain with Mobile Phone Technology is USD 30,000 then the payback period will be 2 years 3 months. In addition, the will be other economic benefit in the form time savings made in collection of water and reduction in absenteeism from work and school as a result of reduction in water related diseases.

Conclusion and RecommendationsThe spare parts supply chain is working fairly well on market based principles. However, the supply chain could be strengthened with interventions to promote 1) easy identification of the outlet with required spare part of good quality and the lowest price and 2) timely access to the required spare part. The recommendations to address these challenges are: (1) making information on spare parts readily available to the water supply operators to increase access to spare parts and provide options to stimulate competition by exploring option of using technologies such as the Mobile Phone Technology (MPT) (2) Explore the feasibility of a policy on standardisation of water supply parts to enhance the quality of spare parts (3) To reduce the travel time in accessing major spare parts by exploring the use of technologies (emerging social media and mobile money platforms) to order parts and also make payment.


CONTENTSEXECUTIVE SUMMARY 2

CONTENTS 4

LIST OF TABLES 5

LIST OF FIGURES 5

LIST OF ABBREVIATIONS 6

GLOSSARY 7

1. INTRODUCTION 8

1.1 Background 8

1.2 Objectives 8

2. METHODOLOGY 9

2.1 Introduction 9

2.2 Sampling 9

2.3 Data Collection 9

2.3.1 Literature Review 9

2.3.2 Interviews with key informants 10

2.3.3 Observations and inspection of water system records 10

2.4 Data analysis 11

3. POLICY FRAMEWORK ON SPARE PARTS SUPPLY CHAIN MANAGEMENT 11

3.1 Context 11

3.2 Policy framework on spare parts supply chain 11

3.3 Supply chain: Public or Private? 12

4. FINDINGS 13

4.1 Identification and access to spare parts outlets 13

4.2 Mapping out the distribution/supply chains for spare parts 15

4.3 Repair and maintenance service providers and their operational status, capabilities and challenges

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4.4 Market Assessment of Spare parts- business 19

4.5 Barriers and Gaps in Spare Parts Supply Chain/Network 19

4.6 Quantifying the cost of improved spare parts inventory management to water systems

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5. RECOMMENDATIONS FOR IMPROVING SPARE PARTS SUPPLY CHAIN 21

REFERENCE 22

ANNEXES 23

Annex 1: Study questionnaire 23

Annex 2: Communities visited and information about their piped water systems

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Annex 3: Type of Spare parts available in study districts 25

Annex 4: Concept of Mobile Phone Technology as a tool for improved spare parts inventory management

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Annex 5: List of people contacted 27

LIST OF TABLESTable 1: Rationale of Assessment Tools 9

Table 2: Classification of Water Supply Spare Parts in Study Areas 13

Table 3: Number of Repair and Maintenance service providers in study district 19

LIST OF FIGURESFigure 1: Map of Ghana showing study areas 1

Figure 2: Distribution of piped water systems/communities visited in the study districts

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Figure 3: Components of water system with associated Spare Parts 13

Figure 4: Existing Spare Parts Supply Chain Model 15

Figure 5: Map showing spare parts purchase route for water systems in AOB 16

Figure 6: Map showing spare parts purchase route for water systems in North Dayi

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Figure 7: Map showing spare parts purchase route for water systems in Biakoye 17

Figure 8: operational status, capabilities and challenges of maintenance service providers

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LIST OF ABBREVIATIONS

AOB Asikuma Odoben Brakwa

CWSA Community Water and Sanitation Agency

DA District Assembly

DCD District Coordinating Director

DCE District Chief Executive

GOG Government of Ghana

GWCL Ghana Water Company Limited

LMS Limited Mechanised System

MPT Mobile Phone Technology

SWN Safe Water Network

UF Ultra filtration

UV Ultraviolet

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GLOSSARYBeneficiary Communities/End users refers to a group of individuals, a small community, a small town, a district or a community for whose benefits from water supply facility

District Assembly means a district assembly organised in accordance with the Local Government Act (Act 462) of the laws of Ghana, which shall be responsible for implementing projects

Limited Mechanized System is a piped system using decentralized overhead plastic tanks (e.g. polytanks) on galvanized or block work towers with one or two points with spouts

Maintenance describes the set of measures and activities aimed at keeping, or restoring optimal and reliable functionality of equipment, and sustaining and protecting natural resources

Operation means the safe, reliable and economic use of a facility over its Life Span.

Preventive maintenance means measures that are taken before major problems and disturbances like breakdowns occur

Rural water supply covers all the measures taken to satisfy the demand for water in predominantly rural population

Small Town Piped Water Systems refers to piped systems that supply water to a community with a population between 2,000 and 50,000

Sustainability is the capacity to maintain a certain process or state indefinitely. In the context of safe water provision, it refers to the indefinitely continued functioning of water facilities, i.e. it includes operation and maintenance and eventual renewal of facilities.

Water supply refers to access to potable water for domestic uses; such as water for drinking, food preparation, bathing, laundry, dishwashing, and cleaning


1. INTRODUCTION

1.1 BackgroundIn Ghana, Safe Water Network (SWN) has over 44 water stations using various technologies such as mechanised boreholes, slow sand filtration (SSF), ultraviolet (UV) and ultra filtration (UF) to serve rural and peri-urban communities without safe water. One of the factors affecting sustainable water service delivery is the availability of spare parts. Spare parts supply chain for rural water supply in Africa focusing on boreholes and hand pumps has received some attention but there is a dearth of information on spare parts for other technologies such as mechanised boreholes, SSF, UV and UF. The supply chain refers to arrangement in place to deliver the correct goods and/or services to the user, at the right time, cost, and quality.

Given the dearth of information on the supply chain, UNICEF in partnership with Safe Water Network has commissioned this study to establish spare parts supply chains across various levels at community, cluster/regional and national level for various water supply technologies in Ghana notably limited mechanisation/reticulated (LMS) systems, UV/UF treatment systems and slow sand filtration systems. The study is based three (3) districts namely Biakoye and North Dayi districts in the Volta Region, and Asikuma Odoben Brakwa district in the Central Region (Figure 1).

1.2 ObjectivesThe overall objective of the study was to contribute to strengthening operational sustainability of water systems by:

» identifying spare parts outlets;

» determining the type and availability of spare parts;

» identifying repair and maintenance service providers and their operational status, capabilities and challenges

» mapping out the distribution/supply chains for spare parts in the two regions;

» identifying gaps in the spare parts supply chains/network;

» identify barriers and issues to spare parts availability and provide recommendations for improving access to spare parts and strengthening the supply chains network;

» quantify the costs of improved spare parts inventory management to water systems;

The findings from this study will provide input to inform capacity-building and business development efforts to increase the range of availability and affordability of spare parts of water supply systems.

Figure 1: Map of Ghana showing study areas

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2. METHODOLOGY

2.1 IntroductionThe study employed multiple data sources and triangulation to provide detailed and comprehensive perspective of the situation regarding spare parts supply. The assessment was based on review of literature, semi-structured interviews with key stakeholders in the spare parts supply chain and direct observation of piped water systems (Table 1).The key stakeholders consulted were operators of selected water supply systems, staff of Community Water and Sanitation Agency (CWSA), District Water and Sanitation Engineers, Spare part outlet owners, repair and maintenance service providers and representatives of participating communities (Assembly members, Owners of water systems or water and sanitation management team).The study took place between October and December, 2016.

Table 1: Rationale of Assessment Tools

Assessment Tool Purpose

Literature review To get a better overview of spare parts supply chain, informed the selection of key indicators for interviews, development of data collection tools and general planning and guidance for the study.

Semi-structured interviews

To give sufficient space to investigate and probe the availability and price of water supply systems spare parts and other related issues during interviews with key stakeholders

Direct field observations

To initially understand and describe the context of water supply in the study areas

2.2 SamplingThree (3) out of four (4) districts were selected because the fourth district was outside the scope of this study since it did not have any small town water system. The locations are Asikuma Odoben Brakwa, North Dayi and Biakoye Districts. With the help of the district assemblies, all piped water systems within their jurisdiction were enumerated and captured for the study. In all a total of 24 piped water systems were assessed, with their distribution as shown in figure 2 (details presented in Annex 2)

Figure 2: Distribution of piped water systems/communities visited in the study districts

2.3 Data CollectionThe methods used for data collection were literature review, interviews with key informants and observations.

2.3.1 Literature ReviewA number of documents were reviewed before commencing the fieldwork, and additional documents were obtained during the fieldwork. The documents considered for review were:

» 2010 population and housing census district analytical report of the study districts,

» Operations and maintenance of handpumps and small town water systems strategy report


» CWSA Project Implementation Manual

» Operation and Maintenance of Rural Water Supplies in Malawi

» Sustainable Supply Chains for Rural Water Services

» Supply chain analysis of handpumps and spare parts in Eastern Democratic Republic of Congo

» Region Specific Supply Chains for Hand pumps and Spare Parts in Ethiopia

The review provided an overview of the water and sanitation situation within the study districts, provided relevant information already available and gave guidance on where to solicit additional information. This approach was used to enable the study team maximise the time available for field work and to obtain adequate qualitative information on the research objectives.

2.3.2 Interviews with key informantsThe key informants interviewed were operators of selected water supply systems, Community Water and Sanitation Agency (CWSA) staff, District Planning Officers and District Water and Sanitation teams, Assembly members of participating communities and Spare parts retail shops. The full list of people met can be found in Annex 5. Key stakeholders were selected based on their knowledge and experience in the Ghana water supply sector. Semi-structured interviews were used to gather information from key informants (see Annex 1 for detailed questions). The semi-structured interview addressed seven (7) sub-themes and covered the following key areas (Box 1)

Box 1: Themes for semi-structured interview questionnaires

• Identifying spare parts outlets;

• Determining the type, availability and demand of spare parts;

• Identifying repair and maintenance service providers and their operational status, capabilities and challenges

• Mapping out the distribution/supply chains for spare parts in the two regions;

• Identifying gaps in the spare parts supply chains/network;

• Identifying barriers and issues to spare parts availability

• Quantifying the costs of improved spare parts inventory management to water systems;

2.3.3 Observations and inspection of water system recordsObservations were used as an additional tool to assess the water supply systems, the various system components and their functionality. Additionally, observations were used to validate information on the use of facilities and the level of operation and maintenance and availability of spare parts outlets in the study areas.

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2.4 Data analysisDetails from interviews (with all key stakeholders and operators and managers of piped water systems) and observations were recorded and transcribed as field notes. These were later organised in terms of their subject themes. The data was coded based on patterns that related to the objectives of the study and issues that emerged. Results were interpreted by means of attaching significance and offering narrative explanations, drawing conclusions and offering recommendations.

3. POLICY FRAMEWORK ON SPARE PARTS SUPPLY CHAIN MANAGEMENT

3.1 ContextSupply chain is critical to the delivery of sustainable water services. According to the national water policy in Ghana, regular maintenance of water systems is dependent on reliable supply of spare parts, which is critical for sustaining the use and functioning of water facilities at the community level (GOG, 2007).

Over the years however, new water supply technologies have been introduced in Ghana such as small town pipe systems, limited mechanisation/reticulated (LMS) systems, UV/UF treatment systems and slow sand filtration systems for communities with population above 2000. The key components of the water supply system are the water source (ground water or surface water), water treatment system (SSF or UV/UF), service reservoirs, pumping equipment, delivery and distribution network, public stand pipe. Yet there is dearth of information on the supply chain for the small town water systems.

3.2 Policy framework on spare parts supply chain

In 2001, the Government of Ghana established the National Hand pump Spare Parts Network System, to support the rural water supply chain for spares to meet community needs as a public-private-partnership between CWSA and a network manager (private company), with regional distribution outlets that assures spares availability to districts and communities (GOG, 2007). This is done through a system of procurement and warehousing established in Accra, Kumasi and Tamale as the main zonal distribution points (Akari, 2003). The distribution network is a public-private-partnership between CWSA and a network manager (private company), with regional distribution outlets that assures spares availability to districts and communities (GoG, 2007). The national water policy identified two main challenges (1) maintaining sufficient returns from sale of spares to sustain the distribution network and (2) effective supply chain management for spare parts close to community users. This it intends to address by providing an enabling environment to ensure private sector participation in managing spare parts supply chains in a sustainable manner.

The CWSA Operation and Maintenance guidelines for small towns is silent on supply chain arrangement. The guidelines states that the services performed by Private Sector Specialist Firms shall include the following: repair and cleaning of reservoirs, repair of valves, repair of pumps, rehabilitation of boreholes, repair of intakes (where applicable), repair of meters, comprehensive water quality analysis, repair and cleaning of treatment units, replacement and washing of filter sand aggregates (where applicable), routine maintenance of mechanical and electrical equipment, repair and maintenance of pump houses, treatment buildings, chemical houses and repair of cast iron pipes.


The CWSA design guide for small towns also states the following:

» All suppliers of electro mechanical equipment shall have local agents capable of providing after sales services and relevant practical and theoretical training, particularly to beneficiary communities and water sector professionals.

» Faulty meters may be repaired when withdrawn, either under warranty or through an arrangement with a private firm or GWCL.

The CWSA guidelines on small towns’ water supply is silent on standardisation. A supply chain relates all of the activities associated with the flow and transformation of goods and services from their source to the end-users, that is, from manufacturers, suppliers and service providers, through a network of distributors, to customers. For any supply chain to operate effectively, there must be a demand for the goods and services it supports and certain factors are important to create such product demand. These include price, product appropriateness and simplicity of the product technology. Goods and services in water supply include technology (pumps, storage tank, filters, valves, transmission pipes, simple analysis equipment and associated spare parts), training, repair services, financial and technical services, and facility management. The underlying objective of all supply chains is to deliver a successful product at an acceptable profit. To achieve this, the product must meet the aspirations of the customers; that is it must be : available, affordable, of adequate quality; and delivered in an appropriate time.

3.3 Supply chain: Public or Private?

Supply chains can be operated by the private sector, public sector, or private/public partnership depending on demand for the spare parts, commercial incentives for the provider and the enabling environment. Ideally, private sector operators could operate the supply chain fully if there is a good business case/commercial incentive, the operator has the necessary business acumen and financial capital, as well as existing links to a network of distributors. In a situation where there are low population densities and thus low levels of demand, it is unlikely that a private sector-operated supply chains for spare parts can be viable (WSP/World Bank Sept 2004)

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4. FINDINGS

4.1 Identification and access to spare parts outletsThe piped water supply systems monitored usually comprised of the components and some of their associated spare parts as shown in the figure 3.

Figure 3: Components of water system with associated Spare Parts

Water supply systems are made up of several mechanical and electrical components that wear and tear with time and therefore need to be replaced. The spare parts identified from the study were classified into basic (minor) and advanced (major) (Table 2). The basic spare parts are those that were available within the district where the water supply system was located whereas the advanced were the parts available outside the district of where the water supply system was located.

Table 2: Classification of Water Supply Spare Parts in Study AreasNo. Water Supply Spare Parts

Basic (Minor) Advanced (Major)

1 Small diameter pipes (1 and 2 inches) Big diameter pipes

2 Padlock HDPE pipes

3 Taps Pump

4 Joints (90o) bends Pump motor

5 Tapes Capacitor

6 Glue Switch board/Panel

7 Bends Breaker

8 Stop cork Air valves

9 End cap Gate valves

10 Socket


11 Water Meter

12 Saddle

13 Motor for washing tank

14 UV Light

15 Sand media

16 Micron filters

17 Chlorinator

Most (22 out of 24)of the water systems had no access to advanced spare parts outlet. The advanced spare parts were usually available in plumbing and other hardware shops located in major towns within the district or region or the national capital, Accra. Some of the communities (6 out of 24) had small plumbing shops that sell the basic (minor) spare parts such as bends, end caps, stop cork, taps, pad locks and small diameter types. Asikuma Odoben Brakwa had 3 of such shops whereas North Dayi and Biakoye districts had 1 and 2 small plumbing shops respectively. The water systems supported by Development Partners such as DANIDA were given spare parts following the construction and handing over of the system from Development Partners to beneficiary communities through the District Assembly. It was however observed that all these systems had used the spare parts. Although all the operators and managers of water systems (WSMTs) in the communities knew the location of majority of spare parts outlet in the major towns, they did not have the names of the retail outlets, price list of spare parts nor telephone numbers to be able to check the prices. Most of the WSMTs highlighted the challenge of travelling relatively long distances of about 15km to 220km to purchase spare parts from the major towns. Also, WSMTs sometimes had to search for parts from several shops (15 out of 24).

The field assessment also revealed that the supply of spare parts such as water meters were procured with assistance from Ghana Water Company Limited (GWCL) in Ho and Cape Coast. It was however not clear whether there existed a formal arrangement for the supply of such parts to water supply systems by GWCL.

For example, in the case of North Dayi and Biakoye Districts in the Volta Region, spare parts were usually procured from Kpando, Ho, Hohoe and Accra, which represents district capitals, regional capital and the national capital. The choice of spare parts outlet to visit is dependent on the type of spare parts to be purchased. Minor spare parts were usually bought from either Kpando, Ho or Hohoe whereas major parts were bought from Accra. Minor spare parts included tap, padlock, small diameter pipes, valves, socket, Tees and bends, saddle etc whereas major parts were mainly submersible pump, control panel element, motor, breaker etc. Communities within the Asikuma Odoben Brakwa also bought minor spare parts from Asikuma, Makessim, AgonaSwedru and Akyem Oda. On rare (2) occasions some spare parts of specific water pumps were not available in Ghana and thus pump had to be bought from France.

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4.2 Mapping out the distribution/supply chains for spare parts

It is critical to map out the supply chain of water supply systems to improve on the productive use of resources for effective operation and maintenance to ensure improvement in their down time.

The evidence gathered from the study showed that the Private Sector is the major player in the spare parts supply chain for piped water systems. Spare parts were found to be managed by the private sector at three main levels which were regional capitals, district capitals and the communities. Typically spare parts supply chain extended from the manufacturers (international) to local distributors or wholesalers (at the national level in Accra) and to retailers (in other regional and district levels) to the maintenance service providers and finally to the end user/operators and

managers of water systems at the community level. The existing spare parts supply chain model identified from the study is shown in the figure 4. The repair and maintenance service providers, who are responsible for fixing plumbing, mechanical or electrical faults are also involved in the supply chain to ensure sustainability of water systems. Spare parts were generally obtained from three main sources-operators of water systems buy spare parts either directly from the retail shops, distributors or through the assistance of private repair and maintenance service providers. Thus the supply chain arrangement is by the private sector unlike the arrangement for the hand pump which is based on rural water supply. Individuals are left to purchase spare parts from any available outlet they identify on market based principles. In some cases however, water and sanitation management teams are sometimes supplied with post-construction spare parts which usually depletes within 1-3 years of operation. The study did not identify the active involvement of CWSA and DA in the piped water system spare parts supply chain.

Figure 4: Existing Spare Parts Supply Chain Model

In order to purchase spare parts for the small towns water systems, individual operators find their own way when there is break down of water system. The location of the spare parts outlets are mapped out in figures 5, 6 and 7, which shows the different routes

for purchasing piped water system supply spare parts by the WSMTs and repair and maintenance providers working in the study locations. All the communities in AOB district buy their spare parts from Agona, Mankessim, Cape Coast or Accra as shown in Figure 5.


Figure 5: Map showing spare parts purchase route for water systems in AOB

All the communities in North Dayi and Biakoye district buy their spare parts from Hohoe, Kpando, Ho or Accra as shown in Figures 6 and 7.

Figure 6: Map showing spare parts purchase route for water systems in North Dayi

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Figure 7: Map showing spare parts purchase route for water systems in Biakoye

In all the piped water system communities visited, the responsibility to purchase spare parts lie with the operators of the water system. The study observed that spare parts for plumbing works were readily available to the system operators but the situation was different with some parts of the submersible pump. The spare parts for the plumbing works were considered fast moving parts and majority of the retail shops had more in stock. The retail shops however, had minimal quantity of parts of the submersible pump as it was considered slow moving parts. This was because parts of the pump are seldom repaired due to less breakdowns and stockist therefore claim that it is not worth their while as a business person. It is therefore difficult to encourage supplies to stock these spare parts in their shops. Supplies therefore orders these parts directly from manufacturers on demand.

4.3 Repair and maintenance service providers and their operational status, capabilities and challenges

All the piped water systems visited had adopted the Community Management model with the exception of Safe Water Network water stations which operated under the Cluster Water Management Committee model. Also, private individuals managed their own piped water systems. Under the community management model, water services are provided by Water and Sanitation Management Teams (WSMTs). This team has technical operators in charge of basic (minor) repairs and maintenance of water system such as sealing of leakages, replacement of taps etc. During the handing over of water systems to WSMTs, the operators are provided with hands-on training which was supervised by CWSA. All the technical operators are able to perform basic (minor) repair works. In depth discussions with the technical operators revealed that about one third (8 out of 24) are able to diagnose advance breakdowns that required the services of repair and maintenance service providers (Figure 8). These operators after diagnosing the


breakdown inform repair and maintenance service providers of the required spares needed to fix the particular breakdown. This category of technical operators were either originally plumbers or hand pump area mechanics. The remaining two-thirds of the technical operators were unable to diagnose advance breakdowns and require repair and maintenance service providers to identify the breakdown before procuring the required spare parts.

Aside the minor repairs by technical operators, 4 out of the 24 piped water systems had service contracts with private repair and maintenance service providers usually from Accra and on a few occasions from the regional capitals (Ho and Cape Coast) to undertake routine maintenance and repair services for them (Figure 8). These service contracts were found in Asikuma Odoben Brakwa (3) and North Dayi (1) districts. These repair and maintenance service providers were usually engineers who have been involved in the construction of the water system. The repair and maintenance service providers provided

breakdown maintenance and preventive maintenance services. Only two (2) of the water systems visited (Brakwa and Bedum Systems in AOB) practiced routine preventive maintenance of water systems every six (6) months (Figure 8). The remaining 22 water systems practiced reactive maintenance where parts are repaired when there is a breakdown (Figure 8). That is, intervention by repair and maintenance service providers occur only when there is breakdown of the water system. For those without service contracts,6 relied on staff of GWCL to provide repair and maintenance services (Figure 8). GWCL staff from Cape Coast were responsible for systems in AOB (2) whereas those from Ho were responsible for North Dayi (2) and Biakoye (1) districts. However, there was no formal arrangement between GWCL and the water supply systems and thus staff were rendering these services outside their official duties. The key findings of the repair and maintenance service providers and their operational status, capabilities and challenges are summarised in the bar graph in figure 8;

Figure 8: Operational status, capabilities and challenges of maintenance service providers

Overall, a total of 7 repair and maintenance service providers were identified in the three districts assessed (Table 3).

Repair and maintenance service providers do face challenges. Some of the WSMTs (7 out of 24) are sometimes reluctant to pay for the full cost of work

done. They feel that the charges are too high because there is little or no competition among service providers. This situation is mostly experienced during the rainy seasons where water sales are dramatically low. Also all the outlets that sell advanced spare parts were found to be in the big towns mostly in Accra and required long distance travel. In Asikuma Odoben

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Brakwa and North Dayi districts, it requires about an average of 125 km and 180 km respectively to obtain advanced spare parts from Accra. The average distance from Biakoye district to purchase spare parts from Accra was also estimated at 220 km.

Table 3: Number of Repair and Maintenance service providers in study district

District No. of Repair and maintenance service provider

Asikuma Odoben Brakwa 3

North Dayi 2

Biakoye 2

4.4 Market Assessment of Spare parts- business

Although the private sector companies are supporting efficient water supply service delivery, the ultimate driving force is the market size that affect profit. The shop owners revealed that a precondition for the establishment of an outlet is that the business renders a reasonable profit. The end users (consumers) reported of problems with reliability of supplies and quality control of the spare parts.

As the number of water systems increases, it is expected that water supply systems spare parts business will experience some significant growth as a result of increase demand for parts. The situation is however different due to relatively low demand for parts as well as difficulty in forecasting required spare parts. Spare parts are considered as slow moving or fast moving parts. The study revealed that, for a single system the frequency for purchasing basic spare parts (usually considered as fast moving spare parts) is about 2 to 3 times in a month whereas that for advance parts (usually considered as slow moving spare parts) is about once every 6 months and could even extend to over a year. The frequency for purchasing spare parts was however dependent on the age of the facility, the complexity of design and other factors. The total annual expenditure on basic and advance spare parts as reported for a single system ranged from GHS 1,200-

2,200 (USD 279-511.51) and GHS 1,800-3,500 (USD 418.50-813.80) respectively. Spare parts distributors/wholesalers and retailers usually obtained their parts mainly from France, India, China or Germany through importers. Most of these shops experience low turnover as a result of insufficient demand making it difficult for them to stock spare parts as most are not ready to lock up their working capital. This low volume of spare parts purchased usually lead to high cost of parts. A survey with owners of spare parts shops showed that they include significant profit margins of about 25%-80% in their retail price to compensate for low turnover and stocking risk.

All the spare parts shops were also engaged in sales of sanitation hardware. They stated that they could not solely depend on sales of water supply spare parts and so needed to add in sales of sanitation spare parts and hardware to augment their profit.

4.5 Barriers and Gaps in Spare Parts Supply Chain/Network

Spare parts for the small towns’ water supply are not standardised. However, the initial construction of the water facilities used reputable parts such as Grundfos, Pedrollo pumps etc. This suggests that outlets will have to stock different types of the products. When it comes to replacement WSMTs are free to choose any brand based on availability and prices. Currently the spare parts supply chain serves many uses such as individual households with their own water systems, private sachet water produces and the small towns water operators. As a result, the shops sell various types and brands to meet the needs of the market. The parts that moves fast will obviously become the most readily available parts.

Standardisation of equipment has a significant effect on the sustainability and offers significant benefits. In terms of boreholes fitted with handpump, where the market demand is high in Ghana, CWSA has adopted a standardization policy for handpumps and it is working very well. However, there is no standardization policy for piped water systems but notwithstanding that, the lack of standardisation is not a problem except that there are different brands of spare parts which


imply that outlets could stock all types which at times become a challenge. A typical example was recorded by the Vakpo water system in North Dayi where they reported of frequent pipe burst as a result of the use of low quality pipes.

Access to timely information of the availability and price of spare parts is important for a good functioning supply chain. One way of improving and strengthen the supply chain is by making information on spare parts outlet readily available to customers to enable them compare prices and also arrange to get spare parts on time. There is no documented information on profile of spare parts outlet to offer customers the opportunity to buy from their preferred supplier. The operators have easy access to basic spare parts and are able to carry out basic repairs. When it comes to buying major spare parts they have to travel to the known outlets, check on availability and price before procuring the needed parts. Customers (Communities) are mostly not aware of information about availability, quality, quantity and the cost of various spare parts in stock. Access to timely information on the spare parts availability and price will improve spare parts supply chain and improve sustainability of the water service delivery.

Lack of regulation on quality of spare parts and control measures can be a barrier to proper spare parts supply chain. The quality of the spare parts is essential for achieving sustainable system. There is no known quality assurance and control of piped water system spare parts. Various brands from various countries are available for customers to choose from and also various degrees of quality which probably matches with the prices. There appears to be no regulation in place to eliminate or reduce the presence of sub-standard parts, which are likely to result in reduced lifespan and increased breakdown of parts. The spare parts supply chain is completely left to the open market which is good to control the price. It must be added that because of the water situation individual households also have their own self supply systems and sachet water producers that also relies on these same spare parts.

Inadequate incentives for spare parts suppliers to decentralize their distribution centres to the community level is also seen as a barrier. The low profit margins reported by the suppliers as a result of low demand of spare parts does not provide sufficient justification to decentralize the spare parts outlets since investment could be locked up in the stocks purchased.

4.6 Quantifying the cost of improved spare parts inventory management to water systems

The difficulty in getting spare parts relates to poor spare parts supply chains. This usually results in prolonged downtime of non-functioning water systems leading to poor water service levels.

The benefits of having an improved water supply chain on the operations of the water system are improved downtime which will ultimately have knock on effects on reduction in revenue loss due to downtime and improved health (reduction in disease burden and productivity).

The Mobile Phone-supported Technology (MPT) could be deployed to make timely information readily accessible on location, price of spare parts and availability of spare parts. The cost of setting up the mobile phone technology is estimated to be about USD 30,000.00 (See Annex 4 on concept of the use of Mobile phone technology to improve spare parts management). The average downtime per water system was found to be 4 days in a year. The average daily revenue from water systems was GHS 95 (USD 22). Assuming a production cost of 50% means that the annual net revenue lost per water system is USD 44. Therefore the equivalent annual revenue loss for 500 water systems, which is the total number of small towns in Ghana will be USD 22,000. Reduction in down time from 4 days to 1.5 day will translate to a revenue loss of USD 8,250 instead of USD 22,000 which gives savings of USD 13,570. Thus, if the cost of improving the supply chain is USD 30,000 then the payback period will be 2 years 3 months. In addition, there will be other economic benefits in the form of time savings made in collection of water and reduction in absenteeism from work and school as a result of reduction in water related diseases.

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5. RECOMMENDATIONS FOR IMPROVING SPARE PARTS SUPPLY CHAINThe spare parts supply chain is working fairly well on market based principles. However, the supply chain could be strengthened with interventions to promote (1) easy identification of the outlet with required spare part of good quality and the lowest price and (2) timely access to the required spare part..

The recommendations to address spare parts supply chain challenges are:

» (1) making information on spare parts readily available to the water supply operators to increase access to spare parts and provide options to stimulate competition by exploring option of using technologies such as the Mobile Phone Technology (MPT). A basic approach to intervene will be to create a database of a list (with name, address and contact details) of all spare part outlets and making it available to all piped water systems through the DA. WSMTs can call, SMS or use any of the social media platforms to enquire about spare parts. A more sophisticated approach will be to create electronic platforms that allow customers to see the availability and price of the products and also use electronic transactions such as the Mobile Phone Technology (MPT) applications to make the procurement process for spare parts and the maintenance service providers more competitive and effective.

» (2) Explore the feasibility of a policy on standardisation of water supply parts to enhance the quality of spare parts.

» (3) To reduce the travel time in accessing major spare parts by exploring the use of technologies (emerging social media and

mobile money platforms) to order parts and also make payment. A picture of the spare part needed will be taken and sent to the supplier via Whatsapp for instance, if available, then the customer will pay for the price (including courier cost) via mobile money. The supplier will intend send the part to the customer through a transport service. This will reduce considerably the burden on managers of these systems having to travel long distances to access spare parts


REFERENCEAkari, P.L. (2003). District Capacity Building Project (DISCAP) orientation paper on Operations and Maintenance of hand pump and small towns water systems in Northern Ghana, Volume 1: Strategy for Operations and Maintenance.

Ghana Statistical Service. (2014). District Analytical Report of the 2010 population and housing census. Accra: Ghana Statistical Service

GoG. (2007). National Water Policy, Ministry of Water Resource Works and Housing, Government of Ghana, pp 72

Oyo, A. (2002). Creating Successful Private Sector Supply Chains A resource guide for rural water supply and sanitation practitioners Part of the Supply Chains Initiative, a global initiative led by the Water and Sanitation Program

WSP. (2004). Creating Successful Private Sector Supply Chains, A resource guide for rural water supply and sanitation practitioners, Water and Sanitation Program, World Bank, 1818 H Street, NW, Washington, DC 20433, USA

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ANNEXES

Annex 1: Study questionnaire

No. Objective Question Response

1 Identifying spare parts outlets;

Can you please explain briefly your knowledge on spare parts for water systems and any possible outlets that you know?

Probe: Find out some of the types of spare parts, location and accessibility of spare parts outlets

2 Determining the type and availability of spare parts;

What are the different spare parts that are available to you?

Probe: What parts are often purchased from the outlet, Are you satisfied with the services of the outlet, Do you always get the spare parts needed from the outlets

3 Identifying repair and maintenance service providers and their operational status, capabilities and challenges

Are there repair and maintenance service providers available for repairs when there are breakdown of water systems?

Probe: How long does it take them to come and fix breakdowns, Are they responsible for buying spare parts for fixing breakdowns, Do they have adequate capacity to fix the breakdown, What are the key challenges they face and how they address those challenges

4 Mapping out the distribution/supply chains for spare parts in the two regions;

Is there a well-established spare parts supply chain in your community

Probe: Which type of spare parts are mostly sold, where exactly do you buy spare parts if you don’t get some from your community

5 Identifying gaps in the spare parts supply chains/network;

What have you identified as the possible gaps that can have impacts on the spare parts supply chain

Probe: Is there continuous supply of spare parts, what could account for the non availability of spares, In your opinion how will you describe the current situation of supply of spare parts

6 Identify barriers and issues to spare parts availability and provide recommendations for improving access to spare parts and strengthening the supply chains network;

What are some of the things that can hinder spare parts availability and how can the challenges be addressed

7 Quantify the costs of improved spare parts inventory management to water systems

The cost of improved spare parts inventory will be achieved based on the recommendations of the work


Annex 2: Communities visited and information about their piped water systems

District Community Type of water System Status

Asikuma Odoben Brakwa

Amanfopong Small Town Piped System Functional


KokosoBrakwa Small Town Piped System Functional


Fosuansa Small Town Piped System Functional


Jamra Small Town Piped System Functional


Benin Small Town Piped System Functional


Bedum Small Town Piped System Functional


Nwomaso Small Town Piped System Functional

North Dayi Aveme Danyigba Safe Water Network Small Town Piped System

Functional

North Dayi Bume Vuve Community Piped System Functional

North Dayi Awate Todzi Small Town Piped System Functional

North Dayi Awate Agame Small Town Piped System Functional

North Dayi Wusuta Resettlement

Small Town Piped System Functional

North Dayi Wusuta Main Small Town Piped System Functional

North Dayi TsrukpeTota Small Town Piped System Functional

North Dayi Dukuma Limited Mechanised System Functional

North Dayi Vakpo Small Town Piped System Partially Functional

Biakoye Ntumda Small Town Piped System Functional

Biakoye Nkonya Tayi Private Limited Mechanised System

Functional

Biakoye Tapa Amanfrom Community Piped System Functional

Biakoye Tapa Abotoase Private Limited Mechanised System

Functional

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Biakoye Tapa Amanya Small Town Piped System Functional

Biakoye Kwamekrom Small Town Piped System Functional

Biakoye Wurupong Small Town Piped System Functional

Biakoye Akposo Kabo Private Limited Mechanised System

Functional

Annex 3: Type of Spare parts available in study districts

DISTRICT

SPARE PARTS AVAILABLE

BASIC ADVANCED

AsikumaOdobenBrakwa Small diameter pipes (1 and 2 inches) Big diameter pipes

Padlock Capacitor

Taps Air valves

Joints (90o) bends Gate valves

Tapes Socket

Glue Saddle

Stop cork

End cap

Bends

North Dayi Small diameter pipes (1 and 2 inches) Big diameter pipes

Padlock Air valves

Taps Gate valves

Joints (90o) bends Socket

Tapes Saddle

Glue

Stop cork

End cap

Bends


Biakoye Small diameter pipes (1 and 2 inches) Big diameter pipes

Padlock Gate valves

Taps Socket

Joints (90o) bends Saddle

Tapes

Glue

Stop cork

End cap

Bends

Annex 4: Concept of Mobile Phone Technology as a tool for improved spare parts inventory management

The MPT will begin with the creation of a central database, capable of exchanging data with Service Providers and the Service Authority. Distinctive information on all piped water, spare parts and their prices, user contacts, repair and maintenance service providers and their communities of operation, will be made available to enable the creation of the database (platform) that users can engage. Simple codes, will be created by engaging with Telecommunication Operators. Spare parts will be procured using Mobile Money services. User accounts will be created to allow specific users to be able to explore the system via internet and perform definite tasks.

Outside the development of the technology, an arrangement for delivery of procured spare parts could also be set up. Following the absence of well-developed low cost courier services in the Ghanaian market, a special delivery system involving the extensive network of Road Transport Associations, could be explored for prompt and secured delivery of processed orders to communities.

The cost of using the MPT for piped water systems in the study areas is estimated at USD 24,000 and details are presented the table below

No Activity Estimated Cost (USD)

1 Setting up Central Database 10,000

2 Telecommunication Operators charges 5,000

3 Mobile Money services 1,000

4 Networking with Road Transport Associations 3,000

5 Personnel Cost 5,000

6 Stakeholder consultations 6,000

TOTAL 30,000

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Annex 5: List of people contacted

District Town Name Designation

Asikuma Odoben Brakwa Asikuma Albert Kwesi Inkoom

DCE

Asikuma Odoben Brakwa Asikuma Joe Abugri DCD

Asikuma Odoben Brakwa Asikuma Andrew Yankey District Engineer

Asikuma Odoben Brakwa Amanfopong Isaac Frimpong Technical Operator of Water System

Asikuma Odoben Brakwa Kokoso-Brakwa Acquah Evans System Manager

Asikuma Odoben Brakwa Kokoso-Brakwa Lawyer Ampofo System Chairman

Asikuma Odoben Brakwa Kokoso-Brakwa Mr Twumasi K System Internal Auditor

Asikuma Odoben Brakwa Fosuansa Mr Abban WSMT Member

Asikuma Odoben Brakwa Asikuma Open Minded Shop Plumbing shop

Mankessim Labi’s shop Plumbing shop

Cape Coast Mr Abaidoo Repair and Maintenance Service Provider

Asikuma Odoben Brakwa Fosuansa Joseph Tawiah System Engineer/Revenue Officer

Asikuma Odoben Brakwa Fosuansa Baldwine Kwaku Duwor

Accountant

Asikuma Odoben Brakwa Jamra John K Ayensu Technical Operator

Asikuma Odoben Brakwa Jamra Alex Sakyi Clerk

Asikuma Odoben Brakwa Jamra Ofori Enoch Revenue Collector

Asikuma Odoben Brakwa Benin Kwasi Afrane System Chairman

Asikuma Odoben Brakwa Benin Okyere Kwako Technical Officer

Asikuma Odoben Brakwa Benin Kofi Kaseem Organizer

Asikuma Odoben Brakwa Benin Osei Kofi Accountant

Accra Kwame Baah Repair and Maintenance Service Provider

Asikuma Odoben Brakwa Bedum Ofori Appiah System Manager

Asikuma Odoben Brakwa Bedum Francis Kofi Arthur Accountant

Asikuma Odoben Brakwa Bedum Samuel Asiedu Technical Operator


Asikuma Odoben Brakwa Nwomaso Pius Asamoah System Manager

Asikuma Odoben Brakwa Nwomaso Eric Amissah Accounts Officer

Asikuma Odoben Brakwa Amoanda YawBoadu Technical Operator

Accra Mr Wilson K Nanevi Repair and Maintenance Service Provider

North Dayi Amfoega Mr Francis Hoetu District Engineer

North Dayi Amfoega Atigah Isaac Makafui District Environmental Health Officer

North Dayi Aveme Danyigba

John Kwesi Atsuvi Technical Operator

North Dayi BumeVuve Anyome Akpene System Manager

Ho Mr Eric Worlanyo Nkrumah

Repair and Maintenance Service Provider

North Dayi Awate Todzi David Tuglo Technical Operator

North Dayi Awate Agame Philip Kofinyo System Caretaker

North Dayi Wusuta Resettlement

Adu Adu Benjamin Financial Secretary

Accra EFABY Construction Company

Repair and Maintenance Service Provider

North Dayi Vakpo EKB Abotsi System Manager

Accra Accra Water Electro Limited

Electro Mechanical Shop

Accra Accra Bore Well Electrical Engineering

Spare Parts Shop

Accra Accra Africa Pot Group Water Supply Parts

Biakoye Nkonya Ahenkro

Alhaji Zaidu DCD


Stephen Kyei District Engineer


Samuel Ashiagbor Assistant Engineer

Biakoye Ntumda Sylvester Akompi Assemblyman/WSMT Member

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Accra Mr Lawrence Amuzu Repair and Maintenance Service Provider

Biakoye Nkonya Tayi Mr Cosmos Sarpong Unit Committee member/WSMT member

Biakoye Tepo Honourable Nko Owusu Bediako Kokroko

WSMT member/Assemblyman

Biakoye Tapa Amanfrom Kissi Sekyere System Manager

Biakoye Tapa Abotoase Mr Innusah Fuseinin Owner of LMS

Biakoye Tapa Amanya Collins Darkwa Sakyi System Operator/Unit Committee Member

Biakoye Kwamekrom MY BotwiYeguo Chairman

Kwamekrom Christene Agoh Secretary

Kwamekrom Adomani Francis Technical Operator

Kwamekrom Evans Bisimpo Clerk

Biakoye Wurupong Collins Yeboah Presiding Member/WSMT member

Biakoye Akposo Kabo Mr. Prosper Assor WSMT member/Assemblyman

Mr Kwaku Abora Repair and Maintenance Service Provider

Kpando Kpando Josaco Shop Plumbing Shop

Accra CWSA Mr Owusu Konadu

Accra Safe Water Network

Mr Fortune Ahiagble Head Office-SWN

Documents

SPARE PARTS SUPPLY CHAIN STUDY FOR PIPED WATER …