1. CLICK TO ADD TITLE [DATE][SPEAKERS NAMES] The 6th Global Health Supply Chain Summit November 18 -20, 2013 Addis Ababa, Ethiopia Connecting the Global Health Supply Chain Taylor Wilkerson LMI

2. 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

3. The Supply Chain: A Simplified View Manu- facturer Country CMS Regional Distribution Patient Care Customs/ Entry Local Supply Country Procurement Country Funding Local Procurement International Procurement International Funding Country Planning International Planning International In-country 3

4. The components of effective supply chain PeopleProcess Infra- structure Technology and Communi- cation Improvement focus tends to be here Infrastructure too often considered a constraint 4

5. The pains in the supply chain 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

6. 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

7. 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

8. 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 Care Customs/ Entry Total Product Cost 8

9. 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

10. 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 chain can’t move faster than infrastructure allows Look for help –APICS –Council of Supply Chain Management Professionals –International Association of Public Health Logistics –People that Deliver –Supply Chain Council 10

11. 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 Care Customs/ Entry Goods to market 11

12. 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

13. Acknowledgements William Davidson Institute, University of Michigan –Dr. Prashant Yadav –Ms. Leslie Arney St. Louis University –Dr. Kanak Gautam –Dr. Ik-Whan Kwon 13

14. Questions? Taylor Wilkerson twilkerson@lmi.org @THWilkerson