CLICK TO ADD TITLE The 5th Global Health Supply Chain Summit November 14 -16, 2012 Kigali, Rwanda CLICK TO ADD TITLE Outsourcing Warehousing and Distribution – Planning, Oversight and Capabilities Phillip Kamutenga [SPEAKERS NAMES] [DATE]
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 The Parallel Supply Chain Received at SDP; sign & stamp POD Delivery Issue Pick & Pack Product testing Products received Stored in PSC Inventory NMCP develops distribution plan with PSC assistance Distribution plan given to PSC for implementation POD’s to DHOs, HTSS, NMCP, JSI Health Facility 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
Planning Oversight Capabilities Focus Smart and adequate planning required for superior results Oversight Outsourcing does not eliminate responsibility for results to clients Capabilities investment in certain minimum capabilities to execute (3PL) and oversee the execution (contractor) mandatory
Product Receipt & Physical Count Planning Batching & POD Production Loading Plan, Picking & Loading Distribution List (trigger) PLANNING (Accountability) Distribution Schedule Repackaging 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 John Snow, Inc. Staff Fuel Technical Assistance CAPABILITIES (Performance) 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 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 Improved system performance as USG and GFATM products and donor-funded essential medicines kits are available when and where they are needed. Improved visibility at all levels of the supply chain from central level down to the primary service delivery point Strengthened accountability of in-country supply chains that manage Malaria, Family Planning products and Essential Medicines Kit.
Planning Oversight Capabilities Lessons & Conclusion Without astute and adequate planning, execution of an outsourced solution will fail Oversight You outsource the execution, but not the responsibility for results Capabilities Invest in certain minimum capabilities in order to produce superior results Applies to both contractor and sub-contractor