Transcript Slide 1

GLOBAL HEALTH SUPPLY CHAINS
SCTL: San Jose, Costa Rica
July 21st, 2009
1
TYPICALLY MOH SCM INVOLVES ACTIVITIES AT 3 DIFFERENT LEVELS
SC Activities at each level
•
•
•
•
•
Forecasting / Quantification
Procurement
Storage
Inventory Management
Transportation
Focus at each level
Ministry Of
Health
• Product Registration
• Forecasting / Quantification
• Procurement
Central/National
• Central Co-ordination
• Guidance / Direction
• Target Setting
• Procure / Store & Distribute
Central Medical
Store (CMS)
• Storage
• Transportation
• Inventory Management
Provincial/
Regional WH
•
•
•
•
Storage
Transportation
Inventory Management
Dispensing
Provincial/District
• M&E consolidation
• Provincial Budget Mgmt
• Liaison between Sites & Central
• Storage & Distribution
Hospital/
Hospital Lab
Site
• Storage
• Inventory Management
• Dispensing
Health Centre
/ICTC
Data Flow
Health Centre/
ICTC
Product Flow
• Patient Test, Care & Treatment
• Report Completion
• Request & receive Commodities
• Storage
GLOBAL SUPPLY CHAINS
Where I have come from ….
Holistic Approach to SCM
Outsourcing of non-core competencies
Dynamic & Regular forecasting
Strategic relationships with Suppliers
Pooled Procurement/ Draw down qtys
VMI/ DSI
Supplier Hubs
Direct Shipments/Cross Docking/ Merge
Route optimization
SW Integration
Metrics used to identify weakness/set
priorities. CI efforts
Data turned into Information
High Level of Awareness of SCM
- w/in organization
- in country eg: education
- SCM strategies
To where I am now ….
Silo’d view of SCM
In-source everything CMS, Procurement etc
Annual forecast/incorrect assumptions
No supplier relationships or perf mgmt
Annual Tendering w/single deliveries/no
consolidation of procurement across system
High buffer stocks at all levels held at various
stocking location
Manual 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 integrity
Funding provided by multiple sources/with
different priorities
Low level awareness of SCM
Vertical Supply Chains
Decentralizing of SCM
THE GAP CONTINUES TO WIDENED BETWEEN DELVEOPED WORLD
AND DEVELOPING WORLD SUPPLY CHAINS
Private Sector/High Income
Health Systems Developing World
Focus on supply chain as competitive
advantage / increase profits
• Lack of HR/specialized SCM knowledge
Outsourcing allows focus on core
competencies and specialization
• Absence of metrics for performance/progress
• Massive cost savings
• Poor communications/data integrity
• Lack of strategic approach/ business
framework
• Funding provided by multiple stakeholders
whose priorities are not always aligned
• Reduction in inventory at all points in
chain (cashflow benefits)
Exacerbated by
Concurrent with
• Push to decentralize
• Investment in vertical supply chains
• Enhanced customer service
Result
- Shorter lead times
- Increased customization
- Improved quality
Patients
• Go without
• Or have to purchase meds privately
MOH/Donors
• Wasted investments/inefficiencies throughout system
• Lost opportunity to make more effective use of funds
CHARACTERISTICS OF GLOBAL HEALTH SUPPLY CHAIN
New Product  NPI = Forecasting & Procurement, limited focus on lifecycle planning
Introduction:  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
5
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/Outboun  Customs Clearance can be cumbersome /Product waivers required for some
d Logistics commodities
Distribution:  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
6
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
7
VERTICAL SUPPLY CHAINS LIKE THIS EXIST IN MOST DELVELOPING
WORLD COUNTRIES
République du Burundi
Ministère de la Santé Publique
Systèmes d'approvisionnement des produits pharmaceutiques au BURUNDI. Juillet 2007
MEDICAMENTS
ESSENTIELS
ARVs
PALUDISME
TB
REACTIFS
sécurité du sang
(+ test HIV)
ARVs
Ped
IO
VACCINS
Préservatifs
Dispositifs
Médicaux
Contraceptifs
Etat
Bailleurs
bilatéraux
Bailleurs
multilatéraux
ONG/Privé
Sources
de
Financement
Structure
d'approvisionnement
1er point
de stockage
2ème point
de stockage
Structure
dispensatrice
C
A
M
E
B
U
E
T
A
T
P
N
L
T
D
F
I
D
C
A
M
E
B
U
I
P
A
U
E
FONDS
MONDIAL
SEP/
CNLS
C
L
I
N
T
O
N
U
N
I
T
A
I
D
C
L
I
N
T
O
N
G
D
F
O
M
S
G
D
F
O
M
S
CAMEBU
PNLT
PNSR
BPS
Site de prise
en charge
CPLS
HÔPITAUX
U
N
I
C
E
F
U
N
I
C
E
F
PEV
CDV
CDV
M
S
F
A
C
F
M
S
F
A
C
F
IMC
CNTS
Site de prise
en charge
MSF
IMC
P
D
M
C
I
C
R
P
D
M
ACF
C
I
C
R
PNLO
ACF
SNT/CNT
PATIENT
B
M
SEP/
CNLS
CICR
PRISON
CDT/CT
G
T
Z
C
E
P
B
U
G
T
Z
C
E
P
B
U
CEPBU
BPS
CDS
U
S
A
I
D
G
V
C
G
A
V
I
C
T
B
G
V
C
GVC
GVC
P
S
I
C
T
B
PSI
P
S
I
C
O
R
D
A
I
D
C
O
R
D
A
I
D
CORDAID
Grossiste
Privé
F
N
U
A
P
I
P
P
F
CDS
C
O
N
C
E
R
N
K
F
W
G
F
A
ABUBEF PNSR
CORDAID
Détaillants
I
P
P
F
F
N
U
A
P
C
O
N
C
E
R
N
CONCERN
CPLS
COCOLS
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*
*across developing world excluding LAC/Caribbean
Average availability = 34.9% in the public sector and 63.2% in the private sector
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
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
12
PARTNERS AND DONORS INVOLVED IN SUPPLY CHAIN
MANAGEMENT ACTIVITIES
Major institutional donors providing
funding for health systems
Key implementing agencies engaged
in health system strengthening
• GFATM
• SCMS: Typically focused on
Forecasting & Procurement at the
national level
R8 procurement/SCM = $172m
or 8.7% of total phase one
• PEPFAR $185m in 2007 to PFSCM (runs
SCMS)
• USAID
Funds DELIVER, with JSI in 38
countries (focus on
contraceptives) $100m 6 years
• AUSAID
• DFID
• World Bank
No distinct SCM
budget but
incorporated
into many
activities
• 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