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CLICK TO ADD TITLE. The 6th Global Health Supply Chain Summit November 18 -20, 2013 Addis Ababa, Ethiopia. Connecting the Global Health Supply Chain Taylor Wilkerson LMI. [SPEAKERS NAMES]. [DATE]. Connecting the chain. - PowerPoint PPT PresentationTRANSCRIPT
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The 6th Global Health Supply Chain Summit
November 18 -20, 2013Addis Ababa, Ethiopia
Connecting the Global Health Supply ChainTaylor Wilkerson
LMI
Connecting the chain
• Global health supply chains are segmented with clear barriers between segments
• Investment in supply chain improvements has been localized and tool-focused
• By improving connections across the supply chain, you can improve performance and results
• The solutions have been proven, they just need to be applied more broadly
2
The Supply Chain: A Simplified View
Manu-facturer
Country CMS
Regional Distribution
Patient CareCustoms/ Entry
Local SupplyCountry Procurement
Country Funding
Local Procurement
International Procurement
International Funding
Country Planning
International Planning
International In-country
3
The components of effective supply chain
People
Process
Infra-structure
Technology and
Communi-cation
Improvement focus tends to be here
Infrastructure too often considered a constraint
4
The pains in the supply chain
Manu-facturer
Country CMS
Regional Distribution
Patient CareCustoms/Entry
Local SupplyCountry Procurement
Country Funding
Local Procurement
International Procurement
International Funding
Country Planning
International Planning
International In-country
Annual planning vs. supply chain planning
Focus on product, not distribution
Focus on technology and local solutions
Long lead time annual tenders
Duplication across programs and with commercial sector
5
Supply Chain Solutions
• Recognize the difference between annual planning and execution planning, and the need for both
• Fund products based on total delivered cost• Use framework contracts, vendor managed inventory,
local vendor supply, and other procurement methods• Redesign your supply chain with all four components in
mind (people, process, technology, infrastructure)• Partner with the private sector—locally and globally
6
Annual planning and execution planning
• Annual planning is good for– Setting budgets– Coordinating with suppliers – Other resource planning
• Execution planning is good for– Procurement and distribution – Resource allocation– Adjusting to changing conditions
• Both are essential and need to be recognized at the supply chain level
• Execution planning can smooth material flows and improve availability
Annual Planning
Execution Planning
Every 12 months, 5 year horizon
Every 3 months, 18 month horizon
7
Fund based on total delivered cost
• Donors pay for total delivered cost• This ensures that the cost of delivering the product to the
patient is covered• Secondary benefits
– Highlight supply chain cost and value of investment– Improved awareness of country specific conditions– Identify alternative procurement and distribution approaches
Manu-facturer
Country CMS
Regional Distribution
Patient CareCustoms/ Entry
Total Product Cost
8
Use of other procurement methods
• Framework contracts – comply with public
procurement– provide greater flexibility
• VMI and local procurement – reduce duplicate
systems– takes advantage of
commercial capabilities• More flexibility in procurement means more ability to
respond to actual demands
VMI = Vendor Managed Inventory 9
Redesign your supply chain with all four components in mind
• Balanced investment leads to successful outcomes• Many supply chains operated based
on decades old design—rethink yours!• Don’t forget the infrastructure
component—the supply chaincan’t move faster than infrastructureallows
• Look for help– APICS– Council of Supply Chain
Management Professionals– International Association of
Public Health Logistics– People that Deliver– Supply Chain Council
10
Partner with the private sector
• Private sector often has mature supply chain capability• Partnering with manufacturers can decrease procurement
lead times and result in better service• Only pay for transportation and storage that you need• Using private sector can also support local economy
– Encourage investment in supply chain infrastructure– Backhaul utilization– Build human resources
Manu-facturer
Country CMS
Regional Distribution
Patient CareCustoms/ Entry
Goods to market
11
Building better supply chains
• Current supply chains are disconnected, but proven improvements can build connection
• Improving the connections and operating capabilities can greatly improve performance and results– Recognize annual planning and execution planning– Fund products based on total delivered cost– Use framework contracts and other procurement methods– Redesign your supply chain with all four components– Partner with the private sector
• These are all solutions that are in use today
Every country is different. One-size-fits-all solutions reduce performance for everyone
12
Acknowledgements
• William Davidson Institute, University of Michigan– Dr. Prashant Yadav– Ms. Leslie Arney
• St. Louis University– Dr. Kanak Gautam – Dr. Ik-Whan Kwon
13
