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The 5th Global Health Supply Chain Summit
Outsourcing Warehousing and Distribution –
Planning, Oversight and Capabilities
Phillip Kamutenga
[SPEAKERS NAMES]
November
14 -16, 2012[DATE]
Kigali, Rwanda
Background
 From 2009 CMS received, stored and distributed USG
commodities
 By mid 2010, it was clear that the 3 priorities of visibility,
accountability and performance were not being fully met by CMS
 USAID | MALAWI requested a change of approach to handling
USG commodities
 A parallel supply chain (PSC) was established late 2010
 The receipt, storage and distribution of USG commodities was
outsourced to a 3PL - Cargo Management Logistics (CML)
 By September 2011, another 3PL was sub-contacted - RTT
The Parallel Supply Chain
PSC CYCLE
Receive/Store
Plan
Issue/Deliver
Reconcile
Delivery
Products
received
Product
testing
Issue
Pick & Pack
Distribution plan NMCP develops
given to PSC for distribution plan
implementation with PSC assistance
POD’s to
DHOs, HTSS, Received at SDP;
sign & stamp POD
NMCP, JSI
Stored in PSC Inventory
DHO enters data
into SCMgr SDP Reports
Data Server
•
•
•
~640 service delivery points serviced
Malaria (USAID/GFATM), Family Planning (USAID)
Essential Medicine Kit / Primary Health Care Package
Health Facility
Focus
1. Planning
 Smart and adequate planning required for superior results
2. Oversight
 Outsourcing does not eliminate responsibility for results to
clients
3. Capabilities
 investment in certain minimum capabilities to execute (3PL)
and oversee the execution (contractor) mandatory
Planning
Batching
&
POD Production
Loading Plan,
Picking
& Loading
Distribution
List (trigger)
PLANNING
(Accountability)
Distribution
Schedule
Repackaging
25 26 27 28 29 30 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
PLANNING STAGE
DISTRIBUTION STAGE
Product
Receipt &
Physical
Count
Oversight
Loading, Vehicle
Inspection &
Transshipment
Field Spot Checks
& Daily
Distribution Updates
OVERSIGHT
(Visibility)
Operations
Meetings
(x3 per week)
POD reconciliation
versus
Distribution List
Product Receipt &
Physical Counts
Capabilities
Costing, Contracts
CAPABILITIES
(Performance)
John Snow, Inc.
• Staff
• Fuel
• Technical Assistance
SOPs, Training
KPIs
Routing & Scheduling
Results
Priority
PSC Performance and source
Value of losses
(Accountability)
0.73%
PSC records
Turnaround between order and delivery
(Performance)
25 days from order to delivery
PSC SOP (target met 100% in the last 6 months)
Accuracy (Performance)
100% of PODs available
PSC records
Inventory cycle count accuracy (Performance)
100%
RTT records
Visibility/Transparency:
• Field spot checks every delivery
• Daily delivery updates from 3PL
• Updates to clients every 2 days
• Tri-weekly operations meetings
• End of each day updates by Logistics Associates
• Stock status reports from 3PL (includes returns)
•
•
90% plus visibility of all supply chain activities
on a daily basis
All outputs shared with clients
(MOH/NMCP/RHU). E.g., distribution updates
shared every 2 days
Lessons & Conclusion
1. Planning
 Without astute and adequate planning, execution of an
outsourced solution will fail
2. Oversight
 You outsource the execution, but not the responsibility for
results
3. Capabilities
 Invest in certain minimum capabilities in order to produce
superior results
 Applies to both contractor and sub-contractor