Outsourcing and Partnering for an improved Distribution Model

Rob Botha

Amref Health Africa International Conferecne

24th November 2014

The Challenge

The Solution• Direct Delivery

• Support Structures

• Outsourcing

• Partnerships

• Performance management

Results

Next steps

Conclusion

Agenda

33

10 central medical stores or depots

• Insufficient scale in warehousing and distribution

• Multiple tiers

• Lack of visibility and information

• Financial

• Administrative inefficiencies

The Challenge

Supplier Distributor Depot Sub-Depot Hospital Clinic

44

Supplier Distributor Hospital

The Solution

Direct Delivery model

Bypassing the depot model

• Leveraging existing private sector

• Infrastructure

• Capacity

• Resources

Supplier Distributor Depot Sub-Depot Hospital

55

Direct Delivery

Matching Responsibility with Capacity

2010 2011 2012 2013 2014 2015 2016 2017 2108 2019 20200

100

200

300

400

500

600

Volume

Capacity

25%

35%

7 X 27 = 70% Top suppliers Major hospitals Of volumes going through the

Depot (that can be streamlined)

66

Support Structures

77

Selection

Quantification/

Forecasting

ProcurementStorage

Distribution

Indirect outsourcing to suppliers

Leveraging private sector supply chain

• Shifted the risk to suppliers

• Focus on core competences

Outsourcing

Medicine Management Cycle, www.who.int

88

Partnerships

• SIAPS and SCMS partnered to customise existing RXSolution software

• SIAPS IT development and technical support

• SCMS process definition and user specifications

• Iterative approach as requirements evolved

• Providing visibility and information

• Partnerships and collaboration is critical to a co-ordinated approach to systems strengthening and results in a superior outcome

99

Performance Management

• Visibility into performance of all stakeholders

• Facilities

• Provincial departments of health

• Suppliers

• PMPU

• Finance

• Improved supplier performance and contract management

• Performance monitoring

• Improved supply

• Demand planning and forecasting

• Evidence based decision making

• Sales and Operations Planning (S&OP) meetings with suppliers

1010

Results

Successes

• Supplier on-time delivery – improved from 14% to 85%

• Orders cancelled due to supplier stock-outs – improved from 19% to >1%

• Order fulfilment – improved from 77% to 97%

Challenges

• Documentation from facilities

• Manual re-entry of data

• Connectivity and IT infrastructure

1111

Next Steps

• Increase coverage to new provinces

• Software developments to increase electronic interfaces

• Improved document management and flow

• Cross Docking for other levels of care

• Nominated Delivery Days (NDD)

Supplier Distributor Cross-Dock Clinic

1212

Conclusion

The success of the Direct Delivery model required:• Outsourcing

• Private Sector Engagement

• Partnerships

Results • Improved supply of medicine to facilities

• Improved performance management and contract management through visibility

THANK YOU