ARV Supply ChainComponent 3

IH722 February 24, 2015

Katie BroeckerBethany Bryant

Jennifer JohnsonLiz Nerad

Bottlenecks occurring at the DCMOs are a major challenge for Zambia

A few challenges faced by Zambia’s supply chain have been the uncertain availability of commodities, commodity expiries, and wastage of funds and stock. These shortcomings have especially impacted the facility level as they often faced stock out, while commodities are available at the district and central levels. A significant cause of these inefficiencies has been the bottlenecking of commodities at DCMOs. Relying on the centralized commodity distribution from the DCMOs lead to suboptimal distribution to health care facilities (HC) because of:

• inadequate last mile logistics by the DCMOs;

• lack of vehicles able to navigate difficult terrain, lack of adequate amounts of fuel, and no available truck drivers were in the region;

• lack of personnel dedicated to distribution, which forced pharmacists to coordinate distribution in addition to their official duties;

• lack of a set distribution schedule, which meant commodities were only distributed when a proper vehicle, sufficient fuel and a driver were simultaneously available.

The DCMOs were responsible for providing commodities to 2,000 pharmacies and health facilities throughout Zambia. These challenges were urgently addressed as they resulted in direct violation of the Six Rights of Supply Chain Management.

Difficult Last-Mile Logistics

Bottlenecks Occur at DCMOs

MSLHC

DCMO

MSL Hospitals

Pilot Study: focusing on improving logistics capacity at the district level and reducing the number of stockholding points, thereby ensuring better customer service and stock-outs.

Model A: Storage of drugs at district level. Establishes a commodity planner (CP) whose responsibilities include coordinating orders from health facilities and stock management at the district level.  Health facilities place orders to CP.  The CP places orders to the MSL.  CP receives stock from MSL and manages district store room.  They also process, picks and packs the stock for each facility.  Monthly, the health facilities receive facility packages from CP.

Model B: Eliminates intermediate storage of drugs at district level. These district stores function as a cross-docking facility.  MSL sends shipments pre-packed for individual health facilities.  One advantage of this model is the potential to reduce pilferage and leakages because it enables better shipment tracking.  Health facilities place orders directly to MSL. MSL compiles one customized pack for each health facility delivering packages to districts.  CP receives facility packages from MSL health facilities with limited storage space receive shipment twice monthly; health facilities with adequate storage space receive packages from CP monthly.

Days of reported stock outs for the 3 pilot districts.

Model A Model B

Regional hubs reduce bottlenecks and improve delivery

As a result of the pilot study, there was a significant increase in product availability and decrease in stock out rates under both models. Model B performed significantly better than Model A and comparison districts. There was a significant decrease in the stock out rates in Model B districts (from 1-33% vs baseline of 40-72% stock out) compared to comparison districts (72%). In Model B, clinics were stocked out an average of 5 days compared to 18 days in Model A and 29 days in comparison districts. Reporting rates from district health offices to MSL significantly increased to nearly 100% in Model B districts.

A hub is a stock cross-docking warehouse or transit point which keeps already pre-packed drugs for a short duration for onward distribution to the DCMOs and facilities, removing one level from the supply chain. The cross-docking hub takes on the role previously played by the DCMO in performing last mile distribution. The hub does not hold buffer stock nor does it have the mandate to re-pack commodities.

Zambia is currently implementing Model B districts nationally. The implementation of the MSL regional hubs decentralizes the distribution system. These hubs reduce the impact of district level bottlenecks and provide more vehicles to deliver supplies to SDPs, allowing for “last mile” distribution. This new regional hub system allows each health center order to be centrally processed at MSL and transported to the regional hubs in bulk. The deliveries are received at the hubs and sent on monthly delivery routes utilizing smaller MSL vehicles. This results in a more efficient transportation and distribution network and the cross-docking hub serve as a regional MSL presence in the community. Currently 3 regional hubs of the proposed 7 are open and functioning.

Reduction in stock out rates of Model B districts (light blue) vs Comparison districts (dark blue)

Regional Cross-Docking Hubs

Model B Reduces Stock-out Rates

MSL HC

DCMORegion

alCross-Docking Hub

Hospitals

References

• World Bank. World Bank Policy Note: Enhancing Public Supply Chain Management In Zambia [Internet]. Available from: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2012/08/16/000333037_20120816012127/Rendered/PDF/718560WP0P12520ain0Innovation0final.pdf

• Ministry of Health. The Health Logistics Press. Zambia Ministry of Health [Internet]. 2013 Oct;(17). Available from: http://deliver.jsi.com/dlvr_content/resources/allpubs/logisticsbriefs/ZM_NewsOct2013.pdf

• Ministry of Health. The Health Logistics Press. Zambia Ministry of Health [Internet]. 2013 Jun;(16). Available from: http://deliver.jsi.com/dlvr_content/resources/allpubs/logisticsbriefs/ZM_NewsJune2013.pdf

• Aliza Marcus. The Challenge of Ensuring Adequate Stocks of Essential Drugs in Rural Health Clinics [Internet]. World Bank, Human Development Network; 2010. Available from: http://siteresources.worldbank.org/EXTHDOFFICE/Resources/5485726-1288802844934/Zambia-Evid-to-Pol.pdf

• ColaLife. Supply Chain Pilot Results | Zambia | May 2010 [Internet]. 2010 May [cited 2015 Feb 23]. Available from: http://www.slideshare.net/ColaLife/supply-chain-pilot-results-zambia-may-2010

• Livingstone. MSL Regional Cross-docking Strategy- A Case of Choma Hub [Internet]. 2013 Dec. Available from: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2012/08/16/000333037_20120816012127/Rendered/PDF/718560WP0P12520ain0Innovation0final.pdf

• USAID. Logistics Brief: Improving Access to Malaria Medicines in Zambia [Internet]. USAID; 2011. Available from: http://deliver.jsi.com/dlvr_content/resources/allpubs/logisticsbriefs/ZM_ImprAccMalaMed.pdf

• Derrick Nyimbili. Lessons Learned: Designing and Implementing the Hybrid Essential Medicines System Strategy to Improve Product Accessibility in Zambia [Internet]. USAID; 2014. Available from: http://web.ics.purdue.edu/~aiyer/7ghscs_submission_27.pdf

• MSL. Briefing paper on the external verification and evaluation of the Medical Stores Limited (MSL) Choma Regional Cross-Docking Hub Performance. MSL; 2015.