1. CLICK TO ADD TITLE The 5th Global Health Supply Chain Summit
November , 2012 Kigali, Rwanda  
CLICK TO ADD TITLE
Outsourcing Warehousing and Distribution – Planning, Oversight and Capabilities
Phillip Kamutenga
[SPEAKERS NAMES]
[DATE]

2. 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

3. 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

4. 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

5. Product Receipt & Physical Count
Planning
Batching
&
POD Production
Loading Plan,
Picking
& Loading
Distribution
List (trigger)
PLANNING
(Accountability)
Distribution
Schedule
Repackaging
Product Receipt & Physical Count

6. 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

7. Capabilities Costing, Contracts John Snow, Inc. Staff Fuel
Technical Assistance
CAPABILITIES
(Performance)
SOPs, Training
KPIs
Routing & Scheduling

8. 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.

9. 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