UNICEF’S PLUMPY’ NUT SUPPLY CHAIN

Author

Jayashankar M. Swaminathan, Senior Associate Dean of Academic Affairs and Glaxo Distinguished Professor of Operations, Technology and Innovation Management (OTIM)

 

 

 

Publication Date: 2009 ©2009 Kenan-Flagler Business School, University of North Carolina, Chapel Hill, NC, USA. Reprinted by permission. Available online at www.cse.unc.edu. Clarifications or comments may be directed to cse@unc.edu.

UNICEF’S PLUMPY’ NUT SUPPLY CHAIN A TEACHING CASE FROM THE UNIVERSITY OF NORTH CAROLINA’S KENAN-FLAGLER BUSINESS SCHOOL

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UNICEF Plumpy’Nut Supply Chain

Paul looked around the round table in the conference room at Copenhagen. Peter Hailey, a nutritional coordinator at the Regional Office was on phone with a representative from one of the donors while Emma Maspero, a logistics officer at the Somalia Country Office was lamenting the lack of visibility to Plumpy’Nut orders once they cross into Mogadishu and beyond. As soon as the call was over, Peter began in earnest to continue with his previous point. “We need to get funds in earlier; this should solve most of our problems. ECHO has agreed to meet us next week to discuss funding for the next fiscal year, let us show them why we need to change the way funds are currently distributed.” Emma chimed in at that time, “That sounds like a good plan, we could talk to them about investing in a buffer stock, but we need to first decide where to hold them” pointing to the cost benefit analysis of holding buffer stock at various warehouse locations that Jurgen had earlier passed out. Noreen Prendivilee from the Somalia Country Office frowned at this. “How does that help anyone? Are we not just tying inventory up at warehouses? How does that help us get deliveries any earlier? No wonder we try to hold some safety stock at our district warehouses.” Lars Jensen from the Regional Office stated: “What we need is a safe warehouse that is easily accessible. Even while all countries border each other, we cannot do transshipments. Neither can we hold more than 45 days of stock at the Mombasa port. On the other hand we have some spare space at the warehouse in Jebel Ali that could be made use of.” Paul listened carefully to all the thoughts and said, “We have all the data. What do we do next?”

Background Information on UNICEF Plumpy’Nut Supply Chain

A week before the round table meeting, on a late Thursday evening in September 2008 Jurgen Hulst was having an urgent meeting with his manager Paul Molinaro1 on the recent delays and alarming increase in costs of delivery of nutritional emergency products to key affected regions in Ethiopia, Kenya and Somalia. In a typical case, an order placed in early May 2008 for 1000 cartons of RUTF (Ready to Use Therapeutic Food) or Plumpy’Nut was still shown to be enroute in the system. Paul could not quite understand how a product, with an estimated delivery time of 2 months, could still not be delivered 4 months later. Earlier in the week, Paul had finally agreed to airlift supplies from France to Ethiopia to cover for this shortage, and this was just one of the many unanticipated air shipments that were being made recently. Recent field reports indicated a severe shortage of supply in district offices and feeding centers. As a result, some of the NGOs on the ground were considering direct procurement from the producer to get faster deliveries, a far more costly proposition. Correspondingly, a sudden buildup of new orders was observed that originated from the Country Offices of Kenya and Somalia. From a recent meeting with Nutriset (producer of RUTF), Jurgen knew that production was operating close to capacity which left him wondering how they would satisfy this spike in demand without incurring any additional delays. UNICEF’s current operations in the Horn of Africa involved delivery of nutritional products to children in need that would otherwise starve to death. Constant delays and rapidly increasing costs of delivery not only caused UNICEF to miss its targeted coverage but also led to frequent budget overruns. Paul had called Jurgen to understand the causes for these delays before the next regional meeting with nutrition and logistics officers from Kenya and Somalia. Jurgen was aware that the long and variable lead times were leading to poor performance of the supply chain, and this occurred frequently even after months of meticulous planning. He wondered what would cause such high variability and how UNICEF could address it to make the supply chain more efficient and responsive. An end to end supply chain analysis was essential to obtain constructive solutions to the problem at hand.

                                                                                                                         1  Organization  Structure  is  depicted  in  Exhibit  7  ©  Swaminathan  2009.  This  case  was  prepared  by  Professor  Jayashankar  Swaminathan  with  the  help  of  doctoral  student  Vidya  Mani  as  a  basis  for  class  discussion  rather  than  to  illustrate  good  or  bad  administrative  practices.  

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Nutritional Emergencies in Horn of Africa

The Horn of Africa has been the focus of humanitarian efforts in recent years due to the continuous escalation in natural and man-made disasters, leaving many children in a state of severe acute malnourishment (SAM). Regional drought, flooding and wide spread civil strife have led to reduced crop yields as well as a rise in overall food and fuel costs. This situation is most severe in countries of Kenya, Somalia and Ethiopia. For example, in the past year alone prices of basic food commodities in Kenya had increased by almost 40%. In Somalia, where an estimated 52% of the population is under the age of 18, inter and intra clan conflicts as well as lack of adequate government infrastructure make it highly vulnerable to natural and man-made emergencies. Ethiopia has seen similar political tensions and internal conflicts that have led to large scale violence and left many people stranded with no amenities. Rampant poverty and poor sanitation add to this creating widespread malnutrition amongst children in the country.

UNICEF

In emergency situations, humanitarian organizations like the United Nations Children’s Fund (UNICEF) help in disbursing necessary food and medical supplies to children in need. Created in 1946 right after World War II, UNICEF is mandated by the United Nations General Assembly to advocate for the protection of children's rights, to help meet their basic needs and to expand their opportunities to reach their full potential. It is guided by the Convention on the Rights of the Child and strives to establish children's rights as enduring ethical principles and international standards of behavior towards children. UNICEF’s Medium Term Strategic Plan for 2006-2009 identifies Young Child Survival and Development as the first right of the child.

The Supply Warehouse of UNICEF came into being in 1953 in the basement of the United Nations building in New York. From the earliest days of UNICEF, the supply operation has been a major instrument for the implementation of various UNICEF-assisted programs. Nine years later, in 1962, the storage, packing and assembly functions were moved to Copenhagen. When operations began in Copenhagen, the value of the annual throughput of the packing and assembly operations was between US $2 and 3 million centered on the functions of warehousing, packing and shipping. As of 2005, the total global procurement was over US $1 billion. The UNICEF Supply Division is responsible for all supply functions related to various internal programs as well as other externally funded programs. It has staff working in 158 Country and Regional Offices worldwide as well as at the Supply HQ in Copenhagen, Denmark. It also oversees a supply section in New York and warehouse hubs in Dubai, Panama and Shanghai. Upstream activities (assessment, procurement, and shipping) as well as downstream activities (customs, storage, distribution) for all emergency relief products are managed by UNICEF Supply Division, along with country and regional offices. In most countries, UNICEF works in partnership with local communities, numerous national and international NGOs, multi-lateral organizations, funding agencies, local administrations, civil society and the private sector, as well as in close coordination with the UN Country and Regional Teams.

Plumpy’Nut (Ready to Use Therapeutic Food)

As part of a new strategy to combat the rapidly deteriorating nutritional health status of children, UNICEF along with other humanitarian organizations facilitate the provision of Ready to Use Therapeutic Food sachets to severely malnourished children. RUTF are portable, shelf-stable, single-serving foods that are used in a prescribed manner to treat children with Severe Acute Malnutrition (SAM). In the current scenario, where RUTF is used for treatment of severely malnourished children, primary screening for nutritional status is conducted by community members using a simple armband that associates arm circumference with level of malnutrition. Only those children classified with SAM are then referred to a health facility. Children with

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complicated cases of SAM are treated in a hospital in-patient setting, while those with uncomplicated SAM are given home-based care with periodic check-ups at the health facility. The shift from treating severely malnourished children in hospitals to treating them in community-based programs signals not only a strategic change in nutrition policy, but also presents challenges in the supply of ready-to-use therapeutic foods (RUTF) due to increasing demand in strife torn countries (Exhibit 1). A recent article in Science Magazine (October 2008) highlighted the considerable debate amongst various nutritional professionals if RUTF should also be used in prevention of SAM along with its current use in treatment of SAM. Some non-governmental organizations like Medecins Sans Frontieres (MSF) vociferously advocate distribution of RUTF to all children in a disaster affected area, thereby arresting any incidence of severe acute malnutrition. On the other hand many skeptics including the World Health Organization (WHO) believe that other products are needed for prevention. One of the factors fueling this debate is the high cost of delivery and limited worldwide capacity for production of RUTF.

The type of RUTF purchased most often by UNICEF is called Plumpy’Nut, an oil-based paste of peanuts, sugar and milk powder. Plumpy’Nut is packaged in foil sachets weighing 92 grams, each containing 500 kilocalories, which are then packed into cartons weighing 13.8 kilograms each. They come prepared and correctly dosed, are not water-based and hence do not as easily host contaminants. Depending on a child’s weight, a protocol details how many packets of Plumpy’Nut will be needed per day to treat a malnourished child. A caretaker is typically given one or two week’s worth of Plumpy’Nut to take home, and is asked to bring all empty packets back during the next follow-up appointment. This product has a shelf life of 2 years. In case of delivery, UNICEF works closely with the Ministry of Health (MOH) in Kenya, as well as Non-governmental Organizations like European Commission’s Humanitarian Aid Office (ECHO), U.S. Agency for International Development (USAID), UK Department of International Development (DFID), World Food Programme (WFP), Clinton Foundation, Medecins Sans Frontieres (MSF) and Action Against Hunger (ACF).

Plumpy’Nut Supply Chain

UNICEF and its partners maintain estimates of Plumpy’Nut need in their communities, based on demographic information combined with partners’ knowledge of their projects. The order planning process starts when a Ministry of Health or an NGO partner identifies a specific need for Plumpy’Nut among severely malnourished children in its area. The partner then assesses how much Plumpy’Nut is required for treating these children, and relays this information either directly to the UNICEF country office (as in Somalia) or to the Ministry of Health and then UNICEF (as in Kenya). Typically, there are two types of orders for Plumpy’Nut: Non-Emergency and Emergency. Non-emergency orders are planned in advance. These comprise nearly half of all orders placed by Kenya and Somalia Country Offices. Often these orders are entered into UNICEF’s order tracking system months in anticipation of actual need. Non-emergency orders are typically shipped via sea freight. Emergency orders are expedited orders placed due to an unexpected increase in the need for Plumpy’Nut. Many emergency orders are shipped via air freight, to any location in the world within a few days. Most Plumpy’Nut (RUTF) is made in Malaunay (France) by a company called Nutriset. It has several franchises around the world that also produce RUTF products, but on a small scale. Current agreements with Nutriset entail a commitment to deliver Plumpy’Nut within one week from receipt of purchase order and that there should be a minimum of 18 months shelf life remaining when the product is delivered to the global logistics provider. Once Plumpy’Nut has been manufactured and packaged, Kuehne+Nagel (K+N), a global

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logistics supplier, delivers the product to the port of export for sea freight at Le Havre (France), and to Paris for air freight to the destination country. Product, Funds and Information Flows

The product flow for Plumpy’Nut starts when it is shipped globally from Nutriset by Kuehne + Nagel, Scan Logistics or DHL, then transported from the port of arrival by local logistics suppliers and distributed by implementing partners in country (Exhibit 2). Kenyan and Somali orders of Plumpy’Nut have largely been shipped via sea so they travel via a transshipment port to Mombasa from France. Upon arrival at Mombasa, the containers bound for Kenya clear customs and are then transported by truck to the UNICEF warehouse in Nairobi. From here, the product is released for distribution to the districts, where the District Nutrition Officer and/or NGO partners store the product until it can be used to treat children with severe acute malnutrition. The Plumpy’Nut that is provided to partners in Somalia is held at a bonded in-transit warehouse in Mombasa until a local freight forwarder can move it to Somalia. This usually happens by sea, from Mombasa to Mogadishu. In some circumstances, the product is moved by land from the Mombasa warehouse to parts of Somalia. In most situations in-country transportation is hampered by poor road conditions and security concerns. The product is then held at UNICEF warehouses until partner NGOs request deliveries of Plumpy’Nut for children in their catchment area. The product flow for Ethiopia is similar to that of Kenya with K+N transporting the products from France to Addis Ababa and from there on to the district warehouses. For UNICEF, the funding process begins with the Country and Regional Offices. Donors examine proposals, assess need on the ground, and decide which proposals as well as amount to fund. Once Country Offices have the funds lined up, they can submit purchase requisitions for Plumpy’Nut. When a purchase requisition is submitted, funds are transferred to Supply Division to pay for the product and global transportation costs. When a producer receives an order, they generate an invoice which is submitted to Supply Division. Freight forwarders also submit invoices directly to Supply Division once they have picked up an order for transport. Supply Division pays invoices received from producers and freight forwarders using Country Office funds. Supply Division is responsible for payment of global transportation—from point of production to the point of entry (port if by sea or airport if by air). In most cases, in-country transportation is paid for by Ministries of Health and implementing partners, and at times supplemented by funds from UNICEF (Exhibit 3).

Forward information flows, such as projections of need, order processes, and financial information, and backward information flows, including stock monitoring reports, quality information, and performance data occur as needed (Exhibit 4). The information flow on orders, on the basis of need and forecasts, flow upstream from field officers and Country Offices to the Supply Division and Nutriset while downstream flow of information on delivery times and order status is highly fragmented. Kuehne+Nagel, responsible for the shipments from Le-Havre to Mombasa, has an online system for tracking shipment data while its office in Nairobi sends weekly reports that are made accessible to the Country Office. Each stakeholder in the supply chain has its own information system in place, for e.g. UNICEF’s Supply Division uses SAP, Country Offices use ProMS and warehouses use UniTrack, while Kuehne+Nagel uses CEIL and Scan Logistics uses TWM/LWM.

Complexities in the Plumpy’Nut Supply Chain

Variable lead time Variable lead time makes it extremely hard to predict arrival dates for orders. Typically, many orders receive an amendment for an adjusted Target Arrival Date (TAD), an extension due to some foreseeable interruption in

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the supply chain (Exhibit 5). Transportation of Plumpy’Nut from Le Havre/Paris to Mombasa is one of the longest and most variable steps in the supply chain, regardless of whether the shipment is classified as an emergency or non-emergency order. For example while pure sailing time from Le Havre to Mombasa, without interruptions is 25 to 27 days, non-emergency orders sent by sea to Mombasa since 2005 have experienced on average transportation lead times of 34 days (with a range of 27 to 46 days - Exhibit 8). Congestion at the port of arrival in Mombasa and issues with regulatory paperwork are cited as frequent problems when bringing goods through the port of Mombasa. For example even though UNICEF Country Offices work closely with MOH - Kenya to obtain speedy clearances, this process could take up to 16 days. Additionally, there is usually a 30% backlog of orders at the customs office in Nairobi. In contrast, the average delay for customs clearance at Dubai, where UNICEF houses other emergency supplies like vaccines etc., is only a few days. Orders bound for Somalia frequently face a number of potential disruptions during transport from Mombasa to Mogadishu, and then to UNICEF warehouses and beyond. Other disruptions include the recent port strike at Le Havre and the post election violence in Kenya (Exhibit 6). As a result of variable lead times the cost of transporting Plumpy’Nut from France to eastern Africa has significantly increased. For instance, between January of 2007 and October of 2008 air freight to Kenya or Somalia cost, on average, $2.40 per kilogram; by contrast, sea freight cost an average of only $0.17 per kilogram. From May to September 2008 air freight was used for 33% of emergency orders and 21% of non-emergency orders to Kenya and Somalia. Air shipments become necessary because complex geo-political issues prevent transshipment between Ethiopia, Kenya and Somalia. When the Mogadishu warehouse at Somalia was cut off, corresponding quantities had to be airlifted from France to prevent any shortages.

 Single dominant world supplier for Plumpy’Nut  By the end of 2008 demand for Plumpy’Nut matched Nutriset’s capacity to produce (Exhibit 9). Over the next two years, worldwide demand for Plumpy’Nut is expected to grow at a rate of 30% per annum (UNICEF’s demand alone is expected to increase by 35% a year). In order to meet this surge in demand, Nutriset intends to double its production capacity for Plumpy’Nut sachets to 30 MT/year in 2009, 50.3 MT in 2010 and 96.7 MT in 2011. There are also ongoing efforts to increase the worldwide production capacity for Plumpy’Nut. Nutriset has provided license agreements to franchises in several countries, and UNICEF is actively seeking new sources of Plumpy’Nut. However, these new manufacturers may face some challenges as they come on line, including a reliance on international sourcing of inputs (which may be more costly in future), the potential role of patent protection on the Plumpy’Nut product and production process, and logistical difficulties in scaling up production including raising capital funds, procuring equipment and securing contracts. Uneven funding Stakeholders in the Plumpy’Nut supply chain are not only affected by the unpredictability in the magnitude of funding, but also by the timing of receipt of funding throughout a 12-month cycle. Nutrition Officers often cite unreliable funding as a major roadblock to efficient procurement planning. The staggered distribution of funds leads to uneven ordering and makes it difficult for Nutriset to plan its production ahead of time. Non emergency orders are generally planned ahead of time, but are sent for production only when production can be scheduled at Nutriset leading to uneven capacity utilization and large variations in production lead time (see exhibits 10 and 11). Complicating the funding picture, nutrition interventions are customarily viewed as non-emergency programs. A country is considered to meet official emergency standards when greater than 15 percent of the population suffers from Global Acute Malnutrition (GAM). Under less dire circumstances or on the road to recovery from famine, Country Office personnel report that it is much more challenging to raise funds for their ongoing “low-grade emergencies.” Since most donor funding is geared towards relief of both immediate and long-term emergencies (as opposed to prevention), Plumpy’Nut is usually only purchased with funds allocated for emergency interventions. Different methods for forecast generation and seasonality effects

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There are many ways to collect data for forecasting but these can be inconsistent in methods and quality (Exhibit 12). When different methods of nutrition forecasts are being used across stakeholders to assess how many children are severely malnourished that may require Plumpy’Nut, they may yield entirely different estimates of demand, ordering projections, budgeting and program coverage. Depending on the location that UNICEF partners are implementing their programs, using national-level data could predict twice or less than half, as many children who truly require Plumpy’Nut in the district. In addition to different methods of forecasts, seasonality is often not captured in forecasts despite its importance in driving malnutrition. As guidelines on forecasting methods change so could the demand projections. Thus, demand for Plumpy’Nut could be highly variable depending on the implementing partner that assesses need for Plumpy’Nut and the forecasting method used to do so. Inadequate Information amongst Supply Chain Partners Additional challenges to information flow involve the collection and transfer of information across the supply chain. First, current systems that collect information are sometimes stand-alone systems so data is only visible to a subset of stakeholders. Second, backward information flow, including reports on handover and feedback on quality, is either unavailable or nontransparent. The Kenya and Somalia Country Offices do not regularly receive information on the status of their orders (e.g. if the order is under production, delivered for shipment or delayed). There is little data visibility into inventory below the country-level warehouse, and it was reported that field officers often do not communicate stock and consumption data to Country Office program officers. A notable exception to this is a new RapidSMS program, implemented by UNICEF in Ethiopia, Uganda and Malawi to track nutrition program admissions and Plumpy’Nut stock levels. Though only in pilot stage, the project has shown promising results as an inexpensive way to rapidly collect important data across a wide geographic area. The RapidSMS system allows each feeding site to instantly transmit information to UNICEF on how much Plumpy’Nut they have received, how much remains in stock, and how much has been dispensed. Future Supply Chain

Today all officers from nutrition, logistics and supply division have gathered to discuss how to shape the future supply chain. They each had a copy of the data on delivery lead times, cost benefit analysis on holding buffer stock at various locations as well as the demand and capacity for Plumpy’Nut over the past three years. There were two main questions on the agenda for everyone to answer.

1. Whether or not to hold any buffer inventory and if yes, where to hold the buffer inventory (Mombasa or Jebel Ali)?

2. How to smooth order patterns for Plumpy’Nut?

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Exhibit  1:  International  order  volumes  of  Plumpy’Nut®  by  UNICEF  Country  Offices,  2004-­‐2008  

 

   Countries   experiencing   nutrition   emergencies,   including   Ethiopia,   Sudan,   Niger,   and   Malawi,   are  

consistently   among   those  with   the   largest   orders.   There   have   also   been   a   greater   number   of   countries  placing  orders  for  RUTF,  since  2005.    

 

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Exhibit  2:  Detailed  product  flow  for  Plumpy’Nut  

   

Exhibit  4:  Detailed  information  flows  in  the  Plumpy’Nut  supply  chain  

   

 

Exhibit  3:  Detailed  funding  flows  in  the  Plumpy’Nut  supply  chain    

 

 

 

UNICEF’s  activities  are  in  blue;  partners’  inputs  in  green.  

 

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Exhibit  5:  Reasons  for  amendment  to  orders  for  Plumpy’Nut  from  all  country  offices,  2005-­‐2008  

 

Exhibit   6:   Lead   times   for   Plumpy’Nut   shipped   before,   during   and   after   Le   Havre   strike   and   Kenya   post-­‐

election  violence  

 

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Exhibit 7: UNICEF Organizational Structure:

UNICEF  

Supply  Division  

Paul  Molinaro  

Jurgen  Hulst  

Country  Office  

Nutri]onal  Officers  

Kenya  -­‐Noreen  

Prendiville  

Logis]c  Officers  

Somalia  -­‐Emma  

Maspero  

Regional  Office  (ESARO)  

Regional  Head  of  Supply  

Nutri]on  Coordinator  

Peter  Hailey  

Regional  Logisitcs  Officer  

Lars  Jensen  

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Exhibit 8: Average lead times for order delivery to Ethiopia, Kenya and Somalia (2007 – 2008)

Lead time for Ethiopia (days) Non- Emergency Orders Average Min Max Emergency Orders Average Min Max

Supply Division 22 2 35 Supply Division 5 2 10

Production Lead Time 33 0 75 Production Lead Time 38 7 79 Nutriset Port Preparation 5 0 55 Nutriset Port Preparation 10 0 41

Paris to Addis Ababa 5 2 42 Paris to Addis Ababa 2 0 5 Total Time to deliver 44 Total Time to deliver 50

Lead time for Kenya (days) Non – Emergency Orders Average Min Max Emergency Orders Average Min Max

Supply Division 11 2 30 Supply Division 5 2 10 Production Lead Time 18 1 38 Production Lead Time 10 4 25

Nutriset Port Preparation 30 28 32 Nutriset Port Preparation 2 0 4 K+N Order Preparation 10 8 11 K+N Order Preparation 10 5 15 Le Havre to Mombasa 35 28 45 Le Havre to Mombasa 30 25 45

Customs + Transport to Warehouse 5 0 5 Total time to deliver 50 Warehouse to End Location 8 1 5

Total time to deliver 75 Lead time for Somalia (days)

Non- Emergency Orders Average Min Max Emergency Orders Average Min Max Supply Division 15 5 75 Supply Division 5 2 17

Production Lead Time 35 7 52 Production Lead Time 10 5 22 Nutriset Port Preparation 5 0 10 Nutriset Port Preparation 2 1 3 K+N Order Preparation 15 7 19 K+N Order Preparation 15 10 18 Le Havre to Mombasa 35 25 40 Le Havre to Mombasa 25 22 30

Transshipment in Mombasa 10 7 11 Total time to deliver 50 Mombasa to Warehouse 45 25 90

Total time to deliver 85 Exhibit 9: Yearly demand (MT) for Plumpy’Nut

Demand in MT (yr) 2008 2009 (Projected) 2010 (Projected)

Total demand for Plumpy’Nut 13560 18000 23400

Demand from UNICEF 9529.215 13000 19800

Nutriset Capacity 16600 36000 36000

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Exhibit 10: Nutriset Capacity utilization by UNICEF in 2007-2008

Month - 2007 % of capacity utilized Month - 2008 % of capacity utilized Jul-07 8.88% Jan-08 6.22%

Aug-07 32.13% Feb-08 8.33% Sep-07 37.84% Mar-08 42.60% Oct-07 61.61% Apr-08 39.89% Nov-07 40.18% May-08 61.02% Dec-07 20.24% Jun-08 92.55%

Jul-08 74.19% Aug-08 60.09% Sep-08 106.61%

Exhibit 11: Production Lead time for Emergency and Non-emergency orders

Month Global Production Lead Time Order Volume (MT)

Average Min Max Std Dev Jan-07 28.33333 6 71 36.96395 12.3372 Feb-07 22.14286 5 63 20.13644 124.6278 Mar-07 3.8 2 6 1.32916 157.7064 Apr-07 22.5 2 142 35.86655 214.5072 May-07 21.33333 5 95 22.8494 713.598 Jun-07 33.42105 8 84 22.48616 185.9688 Jul-07 28.45455 10 108 28.41255 144.5274

Aug-07 14.125 2 63 14.31025 526.1526 Sep-07 26.36364 4 208 48.21731 355.2534 Oct-07 21.05 3 87 22.11191 530.1132 Nov-07 70.69231 6 293 100.4394 584.8992 Jan-08 44.6 6 116 45.15307 159.5832 Feb-08 27 4 63 23.13388 318.3108 Mar-08 31.10526 2 201 44.92821 658.1358 Apr-08 39.21429 3 129 41.55104 398.2542 May-08 25.95652 2 90 26.28598 5136.291 Jun-08 28.0625 1 71 19.0533 3282.123 Jul-08 49.075 2 111 28.53193 7459.976

Aug-08 31.48148 5 74 18.40596 2732.483 Sep-08 29.75 3 52 16.36282 7571.687

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Exhibit 12: Forecasting methods use by different groups Group Forecasting Method Implementing NGO Number of admissions, amount of Plumpy’Nut

consumed; nutrition status Ministry of Health Number of admissions, amount of Plumpy’Nut

consumed UNICEF Country Office and Regional Office Malnutrition status in country/districts UNICEF Supply Division Historic trends of Plumpy’Nut consumption Plumpy’Nut producers Trends in ordering, qualitative projections Multilateral groups (e.g., FEWSNET, FSAU) Food security/nutrition status in districts Donors Malnutrition statistics; historic trends of Plumpy’Nut

consumption; weather, other food security trends Exhibit 13: Average lead time for Plumpy’Nut delivery and Investment Cost for maintaining buffer stock

Buffer Stock Level (MT)

Average lead time for Plumpy’Nut delivery (weeks)

Investment (Cost)

Mombasa Dubai 0 6 6 0

100 5.75 5.25 600,000 200 4.25 3.9 1.1 M 300 3.1 2.8 1.6M 400 2.2 2.2 2.1 M 500 1.8 2 2.6 M 600 1.78 2 3.1 M 700 1.77 1.9 3.6 M 800 1.77 1.9 4.1 M 900 1.77 1.9 4.6 M

1000 1.77 1.9 5.1 M Exhibit 14 a: Supply Chain Times for PO 4401

Supply Chain Process Supply Chain Times

Order Time 0

Purchase Order-Material Ready 6 Le Havre 13

Le Havre to Mombasa 52

Customs + Transport to Warehouse 11 Warehouse to End Use Location 100

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Exhibit 14 b: Stock levels of PO 4401 at the Mombasa Warehouse

Date of Stock - Keeping Remaining Quantity at Warehouse

05/09/08 998

5/15/08 858 5/19/08 752

7/31/08 531

8/1/08 220 8/5/08 82

Exhibit 15: Sachet of Plumpy’Nut

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Exhibit 16: Map of Europe, Africa and Mid East

Dubai  

Somalia  

Kenya  

Ethiopia  

France  

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Questions to Consider: 1. What are the key differences between a commercial supply chain and a humanitarian supply chain? 2. Consider a situation where Paul commits to the establishment of a buffer inventory stock

a. What do you think are the advantages of implementing a buffer stock policy? b. Which location would you choose for location of buffer stock and why? c. What level of buffer stock would be ideal and how much investment would be needed to do

so? d. Are there any alternate arrangements that you would propose for location and distribution of

buffer stock? 3. What other suggestions would you recommend to UNICEF that would help improve the performance

of Plumpy’Nut Supply Chain?