SPARE PARTS SUPPLY CHAIN STUDY FOR PIPED WATER SYSTEMS

Report by Dr. Kwabena Biritwum Nyarko Dr. Eugene Appiah-Effah

April 2017 SPARE PARTS SUPPLY CHAIN STUDY FOR PIPED WATER SYSTEMS Final Report

Submitted by Dr. Kwabena Biritwum Nyarko Dr. Eugene Appiah-Effah

April 2017 2 SPARE PARTS SUPPLY CHAIN STUDY FOR PIPED WATER SYSTEMS

EXECUTIVE SUMMARY Context Scope

The 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.

Objectives

The main objective of the study is to contribute to The study was conducted in three (3) districts namely strengthening operational sustainability of water Biakoye and North Dayi districts in the Volta Region, systems by examining the spare parts supply chain. and Asikuma Odoben Brakwa district in the Central The specific objectives covered are as follows: Region as indicated on the map. In all a total of 24 piped water systems were assessed. »» identifying spare parts outlets;

»» determining the type and availability of spare parts; Results »» identifying repair and maintenance service providers and their operational The Private Sector is the major player in the spare status, capabilities and challenges parts supply chain for piped water systems. The typical spare parts supply chain identified extends from the »» mapping out the distribution/supply manufacturer (International) to local distributors or chains for spare parts in the two regions; wholesalers (at the national level in Accra) and to retailers (in other regional and district levels) to the »» identifying gaps in the spare parts supply maintenance service providers and finally to the end chains/network; user/operators and managers of water systems at the »» identify barriers and issues to spare parts community level. The spare parts identified from the availability and provide recommendations study were classified into basic (minor) and advanced for improving access to spare parts and (major) (Table 2, page 13). The basic spare parts are strengthening the supply chains network; those available within the districts where the water supply systems are located whereas the advanced spare »» quantify the costs of improved spare parts parts are the parts available outside the district where inventory management to water systems the water supply system are located. Majority of the water system (22 out of 24) had no access to advanced 3

spare parts outlet in their communities. The advanced spare parts were usually available in plumbing and Conclusion and other hardware shops located in major towns within the district or region or the national capital, Accra. Recommendations The WSMTs had technical operators in charge of basic (minor) repairs and maintenance of water system such The spare parts supply chain is working fairly well on as sealing of leakages, replacement of taps etc. Aside market based principles. However, the supply chain the minor repairs by technical operators, some of the could be strengthened with interventions to promote piped water systems had service contracts with private 1) easy identification of the outlet with required maintenance and service providers to undertake spare part of good quality and the lowest price routine maintenance and break down maintenance. and 2) timely access to the required spare part. The Spare parts were obtained from three main sources recommendations to address these challenges are: (1) -operators of water systems buy spare parts either making information on spare parts readily available to directly from the retail shops, distributors or through the water supply operators to increase access to spare the assistance of private repair and maintenance parts and provide options to stimulate competition service providers. The total annual expenditure on by exploring option of using technologies such as basic and advanced spare parts for a single water the Mobile Phone Technology (MPT) (2) Explore system ranged from GHS 1,200-2,200 and GHS 1,800- the feasibility of a policy on standardisation of water 3,500 (USD 418.50-813.80) respectively. Spare parts supply parts to enhance the quality of spare parts (3) distributors/wholesalers and retailers indicated that To reduce the travel time in accessing major spare they usually obtained their parts mainly from France, parts by exploring the use of technologies (emerging India, China or Germany through importers. The social media and mobile money platforms) to order barriers and gaps in identified in the study were (1) parts and also make payment. 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. 4 SPARE PARTS SUPPLY CHAIN STUDY FOR PIPED WATER SYSTEMS

CONTENTS

EXECUTIVE 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, 17 capabilities and challenges 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 20 to water systems 5

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 24 systems Annex 3: Type of Spare parts available in study districts 25 Annex 4: Concept of Mobile Phone Technology as a tool for improved 26 spare parts inventory management Annex 5: List of people contacted 27

LIST OF TABLES

Table 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 FIGURES

Figure 1: Map of Ghana showing study areas 1 Figure 2: Distribution of piped water systems/communities visited in the study 9 districts 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 16 Dayi Figure 7: Map showing spare parts purchase route for water systems in Biakoye 17 Figure 8: operational status, capabilities and challenges of maintenance service 18 providers 6 SPARE PARTS SUPPLY CHAIN STUDY FOR PIPED WATER SYSTEMS

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 7

GLOSSARY Beneficiary 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 8 SPARE PARTS SUPPLY CHAIN STUDY FOR PIPED WATER SYSTEMS

1. INTRODUCTION 1.2 Objectives The overall objective of the study was to contribute 1.1 Background to strengthening operational sustainability of water systems by: In Ghana, Safe Water Network (SWN) has over 44 water stations using various technologies such as »» identifying spare parts outlets; mechanised boreholes, slow sand filtration (SSF), ultraviolet (UV) and ultra filtration (UF) to serve »» determining the type and availability of rural and peri-urban communities without safe water. spare parts; One of the factors affecting sustainable water service delivery is the availability of spare parts. Spare parts »» identifying repair and maintenance supply chain for rural water supply in Africa focusing service providers and their operational on boreholes and hand pumps has received some status, capabilities and challenges attention but there is a dearth of information on spare parts for other technologies such as mechanised »» mapping out the distribution/supply boreholes, SSF, UV and UF. The supply chain refers chains for spare parts in the two regions; to arrangement in place to deliver the correct goods and/or services to the user, at the right time, cost, and »» identifying gaps in the spare parts supply quality. chains/network;

Given the dearth of information on the supply chain, »» identify barriers and issues to spare parts UNICEF in partnership with Safe Water Network has availability and provide recommendations commissioned this study to establish spare parts supply for improving access to spare parts and chains across various levels at community, cluster/ strengthening the supply chains network; regional and national level for various water supply »» quantify the costs of improved spare parts technologies in Ghana notably limited mechanisation/ inventory management to water systems; reticulated (LMS) systems, UV/UF treatment systems and slow sand filtration systems. The study is based The findings from this study will provide input to three (3) districts namely Biakoye and North Dayi inform capacity-building and business development districts in the Volta Region, and Asikuma Odoben efforts to increase the range of availability and Brakwa district in the Central Region (Figure 1). affordability of spare parts of water supply systems.

Figure 1: Map of Ghana showing study areas 9

2. METHODOLOGY 2.2 Sampling Three (3) out of four (4) districts were selected 2.1 Introduction because the fourth district was outside the scope of this study since it did not have any small town water The study employed multiple data sources and system. The locations are Asikuma Odoben Brakwa, triangulation to provide detailed and comprehensive North Dayi and Biakoye Districts. With the help of perspective of the situation regarding spare parts the district assemblies, all piped water systems within supply. The assessment was based on review of their jurisdiction were enumerated and captured for literature, semi-structured interviews with key the study. In all a total of 24 piped water systems were stakeholders in the spare parts supply chain and direct assessed, with their distribution as shown in figure 2 observation of piped water systems (Table 1).The key (details presented in Annex 2) 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 Figure 2: Distribution of piped water systems/ Assessment Tool Purpose communities visited in the study districts Literature review To get a better overview of spare parts supply chain, informed the selection of 2.3 Data Collection key indicators for interviews, development of data The methods used for data collection were collection tools and general literature review, interviews with key informants and planning and guidance for observations. the study. Semi-structured To give sufficient space to interviews investigate and probe the 2.3.1 Literature Review availability and price of water supply systems spare A number of documents were reviewed before parts and other related commencing the fieldwork, and additional documents issues during interviews with were obtained during the fieldwork. The documents key stakeholders considered for review were: Direct field To initially understand and »» 2010 population and housing census observations describe the context of district analytical report of the study water supply in the study districts, areas »» Operations and maintenance of handpumps and small town water systems strategy report 10 SPARE PARTS SUPPLY CHAIN STUDY FOR PIPED WATER SYSTEMS

»» CWSA Project Implementation Manual Box 1: Themes for semi-structured interview questionnaires »» Operation and Maintenance of Rural Water Supplies in Malawi • Identifying spare parts outlets; • Determining the type, availability and »» Sustainable Supply Chains for Rural Water demand of spare parts; Services • Identifying repair and maintenance service »» Supply chain analysis of handpumps providers and their operational status, and spare parts in Eastern Democratic capabilities and challenges Republic of Congo • Mapping out the distribution/supply chains for spare parts in the two regions; »» Region Specific Supply Chains for Hand pumps and Spare Parts in Ethiopia • Identifying gaps in the spare parts supply chains/network; The review provided an overview of the water and sanitation situation within the study districts, • Identifying barriers and issues to spare parts provided relevant information already available availability and gave guidance on where to solicit additional • Quantifying the costs of improved spare information. This approach was used to enable the parts inventory management to water study team maximise the time available for field work systems; and to obtain adequate qualitative information on the research objectives. 2.3.3 Observations and 2.3.2 Interviews with key inspection of water system informants records The key informants interviewed were operators of Observations were used as an additional tool to selected water supply systems, Community Water assess the water supply systems, the various system and Sanitation Agency (CWSA) staff, District Planning components and their functionality. Additionally, Officers and District Water and Sanitation teams, observations were used to validate information on Assembly members of participating communities and the use of facilities and the level of operation and Spare parts retail shops. The full list of people met can maintenance and availability of spare parts outlets in be found in Annex 5. Key stakeholders were selected the study areas. 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) 11

2.4 Data analysis 3.2 Policy framework on

Details from interviews (with all key stakeholders spare parts supply chain and operators and managers of piped water systems) and observations were recorded and transcribed as In 2001, the Government of Ghana established the field notes. These were later organised in terms of National Hand pump Spare Parts Network System, their subject themes. The data was coded based on to support the rural water supply chain for spares patterns that related to the objectives of the study to meet community needs as a public-private- and issues that emerged. Results were interpreted by partnership between CWSA and a network manager means of attaching significance and offering narrative (private company), with regional distribution outlets explanations, drawing conclusions and offering that assures spares availability to districts and recommendations. 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 3. POLICY FRAMEWORK CWSA and a network manager (private company), with regional distribution outlets that assures spares ON SPARE PARTS SUPPLY availability to districts and communities (GoG, 2007). The national water policy identified two main CHAIN MANAGEMENT challenges (1) maintaining sufficient returns from sale of spares to sustain the distribution network and (2) 3.1 Context effective supply chain management for spare parts close to community users. This it intends to address by Supply chain is critical to the delivery of sustainable providing an enabling environment to ensure private water services. According to the national water policy sector participation in managing spare parts supply in Ghana, regular maintenance of water systems is chains in a sustainable manner. dependent on reliable supply of spare parts, which is critical for sustaining the use and functioning of water The CWSA Operation and Maintenance guidelines facilities at the community level (GOG, 2007). for small towns is silent on supply chain arrangement. The guidelines states that the services performed Over the years however, new water supply by Private Sector Specialist Firms shall include the technologies have been introduced in Ghana such following: repair and cleaning of reservoirs, repair of as small town pipe systems, limited mechanisation/ valves, repair of pumps, rehabilitation of boreholes, reticulated (LMS) systems, UV/UF treatment systems repair of intakes (where applicable), repair of meters, and slow sand filtration systems for communities with comprehensive water quality analysis, repair and population above 2000. The key components of the cleaning of treatment units, replacement and washing water supply system are the water source (ground of filter sand aggregates (where applicable), routine water or surface water), water treatment system (SSF maintenance of mechanical and electrical equipment, or UV/UF), service reservoirs, pumping equipment, repair and maintenance of pump houses, treatment delivery and distribution network, public stand pipe. buildings, chemical houses and repair of cast iron Yet there is dearth of information on the supply chain pipes. for the small town water systems. 12 SPARE PARTS SUPPLY CHAIN STUDY FOR PIPED WATER SYSTEMS

The CWSA design guide for small towns also states the following: 3.3 Supply chain: Public or Private? »» All suppliers of electro mechanical equipment shall have local agents capable Supply chains can be operated by the private sector, of providing after sales services and public sector, or private/public partnership depending relevant practical and theoretical training, on demand for the spare parts, commercial incentives particularly to beneficiary communities for the provider and the enabling environment. Ideally, and water sector professionals. private sector operators could operate the supply chain fully if there is a good business case/commercial »» Faulty meters may be repaired when incentive, the operator has the necessary business withdrawn, either under warranty or acumen and financial capital, as well as existing links through an arrangement with a private to a network of distributors. In a situation where there firm or GWCL. are low population densities and thus low levels of demand, it is unlikely that a private sector-operated The CWSA guidelines on small towns’ water supply supply chains for spare parts can be viable (WSP/ is silent on standardisation. A supply chain relates World Bank Sept 2004) 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. 13

4. FINDINGS 4.1 Identification and access to spare parts outlets

The 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 Areas No. 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 14 SPARE PARTS SUPPLY CHAIN STUDY FOR PIPED WATER SYSTEMS

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 The field assessment also revealed that the supply to advanced spare parts outlet. The advanced spare of spare parts such as water meters were procured parts were usually available in plumbing and other with assistance from Ghana Water Company Limited hardware shops located in major towns within the (GWCL) in Ho and Cape Coast. It was however not district or region or the national capital, Accra. Some clear whether there existed a formal arrangement for of the communities (6 out of 24) had small plumbing the supply of such parts to water supply systems by shops that sell the basic (minor) spare parts such as GWCL. bends, end caps, stop cork, taps, pad locks and small diameter types. Asikuma Odoben Brakwa had 3 of For example, in the case of North Dayi and Biakoye such shops whereas North Dayi and Biakoye districts Districts in the Volta Region, spare parts were usually had 1 and 2 small plumbing shops respectively. The procured from Kpando, Ho, Hohoe and Accra, which water systems supported by Development Partners represents district capitals, regional capital and the such as DANIDA were given spare parts following the national capital. The choice of spare parts outlet to construction and handing over of the system from visit is dependent on the type of spare parts to be Development Partners to beneficiary communities purchased. Minor spare parts were usually bought through the District Assembly. It was however from either Kpando, Ho or Hohoe whereas major parts observed that all these systems had used the spare were bought from Accra. Minor spare parts included parts. Although all the operators and managers of tap, padlock, small diameter pipes, valves, socket, water systems (WSMTs) in the communities knew Tees and bends, saddle etc whereas major parts were the location of majority of spare parts outlet in the mainly submersible pump, control panel element, major towns, they did not have the names of the retail motor, breaker etc. Communities within the Asikuma outlets, price list of spare parts nor telephone numbers Odoben Brakwa also bought minor spare parts from to be able to check the prices. Most of the WSMTs Asikuma, Makessim, AgonaSwedru and Akyem Oda. highlighted the challenge of travelling relatively long On rare (2) occasions some spare parts of specific distances of about 15km to 220km to purchase spare water pumps were not available in Ghana and thus parts from the major towns. Also, WSMTs sometimes pump had to be bought from France. had to search for parts from several shops (15 out of 24). 15

managers of water systems at the community level. 4.2 Mapping out the The existing spare parts supply chain model identified distribution/supply chains from the study is shown in the figure 4. The repair and maintenance service providers, who are responsible for for spare parts fixing plumbing, mechanical or electrical faults are also involved in the supply chain to ensure sustainability It is critical to map out the supply chain of water of water systems. Spare parts were generally obtained supply systems to improve on the productive use of from three main sources-operators of water systems resources for effective operation and maintenance to buy spare parts either directly from the retail shops, ensure improvement in their down time. distributors or through the assistance of private repair and maintenance service providers. Thus the supply The evidence gathered from the study showed that chain arrangement is by the private sector unlike the Private Sector is the major player in the spare the arrangement for the hand pump which is based parts supply chain for piped water systems. Spare on rural water supply. Individuals are left to purchase parts were found to be managed by the private sector spare parts from any available outlet they identify on at three main levels which were regional capitals, market based principles. In some cases however, water district capitals and the communities. Typically spare and sanitation management teams are sometimes parts supply chain extended from the manufacturers supplied with post-construction spare parts which (international) to local distributors or wholesalers (at usually depletes within 1-3 years of operation. The the national level in Accra) and to retailers (in other study did not identify the active involvement of CWSA regional and district levels) to the maintenance service and DA in the piped water system spare parts supply providers and finally to the end user/operators and chain.

Figure 4: Existing Spare Parts Supply Chain Model

In order to purchase spare parts for the small towns for purchasing piped water system supply spare parts water systems, individual operators find their own by the WSMTs and repair and maintenance providers way when there is break down of water system. The working in the study locations. All the communities location of the spare parts outlets are mapped out in AOB district buy their spare parts from Agona, in figures 5, 6 and 7, which shows the different routes Mankessim, Cape Coast or Accra as shown in Figure 5. 16 SPARE PARTS SUPPLY CHAIN STUDY FOR PIPED WATER SYSTEMS

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 17

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 4.3 Repair and maintenance operators of the water system. The study observed service providers and that spare parts for plumbing works were readily available to the system operators but the situation their operational status, was different with some parts of the submersible pump. The spare parts for the plumbing works were capabilities and challenges considered fast moving parts and majority of the retail shops had more in stock. The retail shops however, had All the piped water systems visited had adopted the minimal quantity of parts of the submersible pump as Community Management model with the exception it was considered slow moving parts. This was because of Safe Water Network water stations which operated parts of the pump are seldom repaired due to less under the Cluster Water Management Committee breakdowns and stockist therefore claim that it is not model. Also, private individuals managed their worth their while as a business person. It is therefore own piped water systems. Under the community difficult to encourage supplies to stock these spare management model, water services are provided by parts in their shops. Supplies therefore orders these Water and Sanitation Management Teams (WSMTs). parts directly from manufacturers on demand. 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 18 SPARE PARTS SUPPLY CHAIN STUDY FOR PIPED WATER SYSTEMS

breakdown inform repair and maintenance service breakdown maintenance and preventive maintenance providers of the required spares needed to fix the services. Only two (2) of the water systems visited particular breakdown. This category of technical (Brakwa and Bedum Systems in AOB) practiced operators were either originally plumbers or hand routine preventive maintenance of water systems pump area mechanics. The remaining two-thirds of the every six (6) months (Figure 8). The remaining 22 technical operators were unable to diagnose advance water systems practiced reactive maintenance where breakdowns and require repair and maintenance parts are repaired when there is a breakdown (Figure service providers to identify the breakdown before 8). That is, intervention by repair and maintenance procuring the required spare parts. service providers occur only when there is breakdown of the water system. For those without service Aside the minor repairs by technical operators, 4 out contracts,6 relied on staff of GWCL to provide repair of the 24 piped water systems had service contracts and maintenance services (Figure 8). GWCL staff from with private repair and maintenance service providers Cape Coast were responsible for systems in AOB (2) usually from Accra and on a few occasions from the whereas those from Ho were responsible for North regional capitals (Ho and Cape Coast) to undertake Dayi (2) and Biakoye (1) districts. However, there was routine maintenance and repair services for them no formal arrangement between GWCL and the water (Figure 8). These service contracts were found in supply systems and thus staff were rendering these Asikuma Odoben Brakwa (3) and North Dayi (1) services outside their official duties. The key findings districts. These repair and maintenance service of the repair and maintenance service providers and providers were usually engineers who have been their operational status, capabilities and challenges are involved in the construction of the water system. The summarised in the bar graph in figure 8; repair and maintenance service providers provided

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

Overall, a total of 7 repair and maintenance service done. They feel that the charges are too high because providers were identified in the three districts assessed there is little or no competition among service (Table 3). providers. This situation is mostly experienced during the rainy seasons where water sales are dramatically Repair and maintenance service providers do face low. Also all the outlets that sell advanced spare parts challenges. Some of the WSMTs (7 out of 24) are were found to be in the big towns mostly in Accra and sometimes reluctant to pay for the full cost of work required long distance travel. In Asikuma Odoben 19

Brakwa and North Dayi districts, it requires about an 2,200 (USD 279-511.51) and GHS 1,800-3,500 (USD average of 125 km and 180 km respectively to obtain 418.50-813.80) respectively. Spare parts distributors/ advanced spare parts from Accra. The average distance wholesalers and retailers usually obtained their parts from Biakoye district to purchase spare parts from mainly from France, India, China or Germany through Accra was also estimated at 220 km. 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 Table 3: Number of Repair and Maintenance of spare parts purchased usually lead to high cost of service providers in study district parts. A survey with owners of spare parts shops District No. of Repair and showed that they include significant profit margins of maintenance service about 25%-80% in their retail price to compensate for provider low turnover and stocking risk. Asikuma Odoben Brakwa 3 All the spare parts shops were also engaged in sales of North Dayi 2 sanitation hardware. They stated that they could not solely depend on sales of water supply spare parts and Biakoye 2 so needed to add in sales of sanitation spare parts and hardware to augment their profit.

4.4 Market Assessment of Spare parts- business 4.5 Barriers and Gaps in Spare Parts Supply Chain/ Although the private sector companies are supporting efficient water supply service delivery, the ultimate Network driving force is the market size that affect profit. The shop owners revealed that a precondition for Spare parts for the small towns’ water supply are not the establishment of an outlet is that the business standardised. However, the initial construction of the renders a reasonable profit. The end users (consumers) water facilities used reputable parts such as Grundfos, reported of problems with reliability of supplies and Pedrollo pumps etc. This suggests that outlets will quality control of the spare parts. have to stock different types of the products. When it comes to replacement WSMTs are free to choose As the number of water systems increases, it is any brand based on availability and prices. Currently expected that water supply systems spare parts the spare parts supply chain serves many uses such as business will experience some significant growth as a individual households with their own water systems, result of increase demand for parts. The situation is private sachet water produces and the small towns however different due to relatively low demand for water operators. As a result, the shops sell various parts as well as difficulty in forecasting required spare types and brands to meet the needs of the market. The parts. Spare parts are considered as slow moving or parts that moves fast will obviously become the most fast moving parts. The study revealed that, for a single readily available parts. system the frequency for purchasing basic spare parts (usually considered as fast moving spare parts) is about Standardisation of equipment has a significant effect 2 to 3 times in a month whereas that for advance parts on the sustainability and offers significant benefits. In (usually considered as slow moving spare parts) is terms of boreholes fitted with handpump, where the about once every 6 months and could even extend to market demand is high in Ghana, CWSA has adopted a over a year. The frequency for purchasing spare parts standardization policy for handpumps and it is working was however dependent on the age of the facility, very well. However, there is no standardization policy the complexity of design and other factors. The total for piped water systems but notwithstanding that, annual expenditure on basic and advance spare parts the lack of standardisation is not a problem except as reported for a single system ranged from GHS 1,200- that there are different brands of spare parts which 20 SPARE PARTS SUPPLY CHAIN STUDY FOR PIPED WATER SYSTEMS

imply that outlets could stock all types which at times become a challenge. A typical example was recorded 4.6 Quantifying the cost by the Vakpo water system in North Dayi where they of improved spare parts reported of frequent pipe burst as a result of the use of low quality pipes. inventory management to

Access to timely information of the availability and water systems price of spare parts is important for a good functioning supply chain. One way of improving and strengthen The difficulty in getting spare parts relates to poor spare the supply chain is by making information on spare parts supply chains. This usually results in prolonged parts outlet readily available to customers to enable downtime of non-functioning water systems leading them compare prices and also arrange to get spare to poor water service levels. 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 The benefits of having an improved water supply chain operators have easy access to basic spare parts and on the operations of the water system are improved are able to carry out basic repairs. When it comes to downtime which will ultimately have knock on effects buying major spare parts they have to travel to the on reduction in revenue loss due to downtime and known outlets, check on availability and price before improved health (reduction in disease burden and procuring the needed parts. Customers (Communities) productivity). 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 The Mobile Phone-supported Technology (MPT) chain and improve sustainability of the water service could be deployed to make timely information delivery. readily accessible on location, price of spare parts and availability of spare parts. The cost of setting up the Lack of regulation on quality of spare parts and control mobile phone technology is estimated to be about measures can be a barrier to proper spare parts supply USD 30,000.00 (See Annex 4 on concept of the use chain. The quality of the spare parts is essential for of Mobile phone technology to improve spare parts achieving sustainable system. There is no known management). The average downtime per water quality assurance and control of piped water system system was found to be 4 days in a year. The average spare parts. Various brands from various countries daily revenue from water systems was GHS 95 (USD are available for customers to choose from and also 22). Assuming a production cost of 50% means that various degrees of quality which probably matches the annual net revenue lost per water system is USD with the prices. There appears to be no regulation 44. Therefore the equivalent annual revenue loss in place to eliminate or reduce the presence of sub- for 500 water systems, which is the total number of standard parts, which are likely to result in reduced small towns in Ghana will be USD 22,000. Reduction lifespan and increased breakdown of parts. The spare in down time from 4 days to 1.5 day will translate to parts supply chain is completely left to the open a revenue loss of USD 8,250 instead of USD 22,000 market which is good to control the price. It must be which gives savings of USD 13,570. Thus, if the cost added that because of the water situation individual of improving the supply chain is USD 30,000 then the households also have their own self supply systems payback period will be 2 years 3 months. In addition, and sachet water producers that also relies on these there will be other economic benefits in the form of same spare parts. time savings made in collection of water and reduction in absenteeism from work and school as a result of Inadequate incentives for spare parts suppliers reduction in water related diseases. 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. 21

mobile money platforms) to order parts 5. RECOMMENDATIONS and also make payment. A picture of the spare part needed will be taken and sent FOR IMPROVING SPARE to the supplier via Whatsapp for instance, if available, then the customer will pay PARTS SUPPLY CHAIN for the price (including courier cost) via mobile money. The supplier will intend The spare parts supply chain is working fairly well on send the part to the customer through market based principles. However, the supply chain a transport service. This will reduce could be strengthened with interventions to promote considerably the burden on managers (1) easy identification of the outlet with required of these systems having to travel long spare part of good quality and the lowest price and (2) distances to access spare parts 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 22 SPARE PARTS SUPPLY CHAIN STUDY FOR PIPED WATER SYSTEMS

REFERENCE Akari, 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 23

ANNEXES

Annex 1: Study questionnaire

No. Objective Question Response 1 Identifying spare parts Can you please explain briefly your knowledge on spare parts outlets; 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 What are the different spare parts that are available to you? availability of spare parts; 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 Are there repair and maintenance service providers available maintenance service for repairs when there are breakdown of water systems? providers and their operational status, Probe: How long does it take them to come and fix capabilities and challenges 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 Is there a well-established spare parts supply chain in your distribution/supply chains community for spare parts in the two regions; 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 What have you identified as the possible gaps that can have spare parts supply chains/ impacts on the spare parts supply chain network; 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 What are some of the things that can hinder spare parts issues to spare parts availability and how can the challenges be addressed availability and provide recommendations for improving access to spare parts and strengthening the supply chains network; 7 Quantify the costs of The cost of improved spare parts inventory will be achieved improved spare parts based on the recommendations of the work inventory management to water systems 24 SPARE PARTS SUPPLY CHAIN STUDY FOR PIPED WATER SYSTEMS

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

District Community Type of water System Status Asikuma Odoben Amanfopong Small Town Piped System Functional Brakwa Asikuma Odoben KokosoBrakwa Small Town Piped System Functional Brakwa Asikuma Odoben Fosuansa Small Town Piped System Functional Brakwa Asikuma Odoben Jamra Small Town Piped System Functional Brakwa Asikuma Odoben Benin Small Town Piped System Functional Brakwa Asikuma Odoben Bedum Small Town Piped System Functional Brakwa Asikuma Odoben Nwomaso Small Town Piped System Functional Brakwa North Dayi Aveme Danyigba Safe Water Network Small Town Functional Piped System 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 Small Town Piped System Functional Resettlement 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 Functional System Biakoye Tapa Amanfrom Community Piped System Functional Biakoye Tapa Abotoase Private Limited Mechanised Functional System 25

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 Functional System

Annex 3: Type of Spare parts available in study districts

SPARE PARTS AVAILABLE

DISTRICT 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 26 SPARE PARTS SUPPLY CHAIN STUDY FOR PIPED WATER SYSTEMS

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 27

Annex 5: List of people contacted District Town Name Designation Asikuma Odoben Brakwa Asikuma Albert Kwesi DCE Inkoom 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 Accountant Duwor 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 28 SPARE PARTS SUPPLY CHAIN STUDY FOR PIPED WATER SYSTEMS

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 John Kwesi Atsuvi Technical Operator Danyigba North Dayi BumeVuve Anyome Akpene System Manager Ho Mr Eric Worlanyo Repair and Maintenance Service Nkrumah Provider North Dayi Awate Todzi David Tuglo Technical Operator North Dayi Awate Agame Philip Kofinyo System Caretaker North Dayi Wusuta Adu Adu Benjamin Financial Secretary Resettlement Accra EFABY Construction Repair and Maintenance Service Company Provider North Dayi Vakpo EKB Abotsi System Manager Accra Accra Water Electro Electro Mechanical Shop Limited Accra Accra Bore Well Electrical Spare Parts Shop Engineering Accra Accra Africa Pot Group Water Supply Parts Biakoye Nkonya Alhaji Zaidu DCD Ahenkro Biakoye Nkonya Stephen Kyei District Engineer Ahenkro Biakoye Nkonya Samuel Ashiagbor Assistant Engineer Ahenkro Biakoye Ntumda Sylvester Akompi Assemblyman/WSMT Member 29

Accra Mr Lawrence Amuzu Repair and Maintenance Service Provider Biakoye Nkonya Tayi Mr Cosmos Sarpong Unit Committee member/WSMT member Biakoye Tepo Honourable Nko WSMT member/Assemblyman Owusu Bediako Kokroko 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 Mr Fortune Ahiagble Head Office-SWN Network