GLOBAL HEALTH SUPPLY CHAINS
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Transcript of GLOBAL HEALTH SUPPLY CHAINS
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GLOBAL HEALTH SUPPLY CHAINS
SCTL: San Jose, Costa RicaJuly 21st, 2009
Central Medical Store (CMS)
Health Centre /ICTC
Central/National
Provincial/District
Site
• Product Registration• Forecasting / Quantification• Procurement
• Forecasting / Quantification• Procurement• Storage• Inventory Management• Transportation• Storage• Transportation• Inventory Management
• Storage• Transportation• Inventory Management• Dispensing
• Storage• Inventory Management• Dispensing
Product Flow
TYPICALLY MOH SCM INVOLVES ACTIVITIES AT 3 DIFFERENT LEVELS
• Central Co-ordination• Guidance / Direction
• Target Setting• Procure / Store & Distribute
SC Activities at each level Focus at each level
• M&E consolidation• Provincial Budget Mgmt
• Liaison between Sites & Central• Storage & Distribution
• Patient Test, Care & Treatment• Report Completion
• Request & receive Commodities• Storage
Data Flow
Ministry Of Health
Provincial/ Regional WH
Hospital/ Hospital Lab
Health Centre/ ICTC
GLOBAL SUPPLY CHAINS
Holistic Approach to SCMOutsourcing of non-core competenciesDynamic & Regular forecastingStrategic relationships with SuppliersPooled Procurement/ Draw down qtysVMI/ DSISupplier HubsDirect Shipments/Cross Docking/ MergeRoute optimizationSW IntegrationMetrics used to identify weakness/set priorities. CI effortsData turned into InformationHigh Level of Awareness of SCM- w/in organization- in country eg: education- SCM strategies
Silo’d view of SCMIn-source everything CMS, Procurement etcAnnual forecast/incorrect assumptionsNo supplier relationships or perf mgmtAnnual Tendering w/single deliveries/no consolidation of procurement across systemHigh buffer stocks at all levels held at various stocking locationManual processes/tools, typically using excel/access database with no integration Some metrics identified but not always appropriate or tracked, no CI Limited data availability and integrityFunding provided by multiple sources/with different prioritiesLow level awareness of SCMVertical Supply Chains Decentralizing of SCM
Where I have come from …. To where I am now ….
THE GAP CONTINUES TO WIDENED BETWEEN DELVEOPED WORLD AND DEVELOPING WORLD SUPPLY CHAINS
Private Sector/High IncomeFocus on supply chain as competitive advantage / increase profits
Outsourcing allows focus on core competencies and specialization
• Massive cost savings
• Reduction in inventory at all points in chain (cashflow benefits)
Concurrent with
• Enhanced customer service
- Shorter lead times
- Increased customization
- Improved quality
Health Systems Developing World• Lack of HR/specialized SCM knowledge
• Poor communications/data integrity
• Absence of metrics for performance/progress
• Lack of strategic approach/ business framework
• Funding provided by multiple stakeholders whose priorities are not always aligned
Exacerbated by
• Investment in vertical supply chains
• Push to decentralize
ResultPatients • Go without• Or have to purchase meds privately
MOH/Donors• Wasted investments/inefficiencies throughout system• Lost opportunity to make more effective use of funds
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CHARACTERISTICS OF GLOBAL HEALTH SUPPLY CHAIN
New Product Introduction:
NPI = Forecasting & Procurement, limited focus on lifecycle planning Timing = 12-18 months for actual implementation Uptake not very successful ending up with a lot of expired stocks
Quantification: Annual Forecast process using a 12-18 month planning window Limited consumption data available, unconstrained demand not included Assumptions not always appropriate (eg: Malaria AMC, Ess Meds distribution history) Forecast Accuracy is not tracked
Procurement: Tender 1/Year w/single deliveries & supplier selection driven by cost Procurement processes are long cumbersome process driven by perceived transaction efforts Payments are made up front, even for donor commodities Funding from National Budget can be unpredictable and insufficient Supplier Performance Management does not exist Govt Procurement Guidelines can be restrictive and favour local organizations Many hospitas/labs do their own procurement but do not utilize Pooled procurement to leverage economies of scale
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CHARACTERISTICS OF GLOBAL HEALTH SUPPLY CHAIN
Storage: Utlize CMS concept - central distribution to provincial warehouses & sites Require sufficient space to store upto 12 months of inventory Poor storage facilities and in many cases insufficient storage Storage & Distribution costs are based on % of commodity prices not activity based costs CMS are typically parastatal and can be very bureaucratic with no revenue recovery models
Inbound/Outbound Logistics
Distribution:
Customs Clearance can be cumbersome /Product waivers required for some commodities Different trucks used for different commodities, no optimization of transportation /routes Cold Chain challenges in rural areas Reverse Logistics doesn’t occur very effectively
Inventory Mgmt: High buffer stock levels - typically 2-3 months at site, 2-3 months at provincial level and 6 months= at central Inventory Balancing /Redistribution doesn’t happen very well and is usually through an informal process Little or no proactive management or tracking of Excess, Expired & Stockouts Ongoing Shortages of commodities such as gloves, due to inaccurate ess meds lists Stock outs monitored at National Level not so much as site level ARVs tend to have excess/expired as opposed to shortages Many times stock turns up in Private Sector Clinics
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CHARACTERISTICS OF GLOBAL HEALTH SUPPLY CHAIN
Technology Fragmented systems and usually utilizing NGO developed tools Technology solutions focus on point solutions for Forecasting, Inventory Management, Data collection and are usually excel/access data base Focus on central level not site level
Resources: Little awareness of SCM as a profession Typically Pharmacists are in charge of SCM activities w/little or no training Very little synergies between partners/disease specific programs & primary health care systems Task shifting needs to occur especially in resource constrained settings Many personnel have multiple jobs Salary inequities amongst MoH programs due to donors Poor communications across the supply chain People who gain from not fixing the issues
Data: Data collection is in place for disease specific programs, but little information is available Accuracy & completeness of data is questionable Little or no data analysis is done except for reporting to the donors Reports used for order fulfillment, however order qtys are typically determined based on patient data
Policy: Treatment Guidelines/ Essential Meds list not updated on a regular basis Payment processes Procurement tendering - favor local suppliers
Sources de
Financement
Structure d'appro-
visionnement
1er point de stockage
2ème pointde stockage
Structure dispensatrice
ETAT
BMFONDS
MONDIAL
CAMEBU
DFID
UE
USAID
FNUAP
IPPF
MSF
OMS
GFA
CEPBU
GVC
UNICEF
CLINTON
GTZ
GDF
CTB
CAMEBU
IPA
ACF
CONCERN
CAMEBU PNLOMSFPNLT CICR CEPBU
IMC BPS GVCACF CORDAID
Syst èmes d'approvisionnement des produits pharmaceutiques au BURUNDI. Juillet 2007
Site de pris e e n cha rge C DSSNT/C NT C DT/C T C OC OLSBPS C PLS C DV Dé ta illa n ts
C DSSite de pris e e n cha rge
PNSR C PLSGrossis te P riv é
C NTSC DV
PNSR AC F CORDAIDIMC GVC CONCE RNPEV PSI
PDM
CI
CR
SEP/C NLS
PNLT
PSI
UNICEF
OMS
FNUAP
MSF
ACF
PDM
CICR
CEPBU
CORDAI
D
GVC
GTZ
CLI
NT
ON
UN
ITAI
D
GDF
CTB
CONCERN
GAVI
KFW
IPPF
PSI
MEDIC AMENTS ESSENTIELS
AR Vs PALUDISME TB IO AR VsPe d
R EAC TIFS s éc urit é du s a ng
(+ tes t HIV)VAC C INS Pr és erva tifs C ontrac e ptifs Dispositifs
Mé dic a ux
CORDAI
D
SEP/C NLS
ABUBEF
PR ISONHÔPITAUX
Ré publique du BurundiMinist è re de la Sant é Publique
Etat
Bailleurs multilat éraux
Bailleurs bilat éraux
ONG/Priv é
PATIENT
VERTICAL SUPPLY CHAINS LIKE THIS EXIST IN MOST DELVELOPING WORLD COUNTRIES
RESULT OF POOR INFRACSTRUCUTRE, TRAINING AND LACK OF RESOURCES
BIGGEST IMPACT OF ALL: APPROX 2/3 OF SELECTED MEDS ARE UNAVAILABLE IN PUBLIC HEALTH FACILITIES ON AVERAGE AT ANY
TIME*
Average availability = 34.9% in the public sector and 63.2% in the private sector
*across developing world excluding LAC/Caribbean
Source: WHO, Health Action International, United Nations MDG8 Report
CHAI’s Supply Chain Strategy is to empower governments to build cost-efficient, effective and
sustainable national health care supply chains
1. Ensure sustainability through increased awareness and continuous source of SCM skills/knowledge in country. E.g. SCM Curriculum/Accredition, SCM Mentoring
2. Leverage resources from developed world, private sector. E.g. Partnerships, Applying lessons learned
3. Turn data into information E.g. Develop technology roadmaps
4. Secure funding for SCM specific programs, to help demonstrate effective solutions
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EXAMPLES OF SCM ISSUES IN COUNTRY
India redistributes on a monthly basis as oppose to having the supplier ammend their delivery qtys each quarter India - Cold Chain for HIV Kits compromised because fridge isnt working Many countries, testing doesn’t occur because they run out of reagents or machines are broken Swaziland distributes ARVs monthly, but ess meds only every 2-3months if the trucks are in working order Botswana/Cambodia forecast Malaria using average monthly consumption GF encourages procurement of high volume, single deliveries to achieve lowest cost GF encourages up front payment to suppliers PEPFAR training objectives are based on # of personnel trained not the effectiveness of the training Per diem culture exists in training/workshops Unconstrained demand is not captured especially for essential meds in Mozambique if you are sick, it is best to have HIV, because you know you will get treated Liberia is constantly running out of gloves Communications between site & central are broken down and a lack of trust exists 10-30% of drug costs are allocated to storage and distribution of drugs for GF Decisions are driven by budet & project not by commodity requirements Public Health SC has been weakened by disease specific programs
Major institutional donors providing funding for health systems
PARTNERS AND DONORS INVOLVED IN SUPPLY CHAIN MANAGEMENT ACTIVITIES
Key implementing agencies engaged in health system strengthening
• GFATM
• PEPFAR
• USAID
• AUSAID
• DFID
• World Bank
• SCMS: Typically focused on Forecasting & Procurement at the national level
• JSI/JSI DELIVER: Logistics focused, conducts assessments and develops tools (eg: Qantamed, Pipeline)
• MSH: MIS focused, usually on Inventory management tools, also an implementer of GMS Technical Assistance
• WHO: Technical Assistant for PSM Plans
• UNICEF: Acts as Procurement Agent
R8 procurement/SCM = $172m or 8.7% of total phase one
$185m in 2007 to PFSCM (runs SCMS)
Funds DELIVER, with JSI in 38 countries (focus on contraceptives) $100m 6 years
No distinct SCM budget but incorporated into many activities