CONCEPTUAL FRAMEWORK FOR SUPPLY CHAIN ANALYSIS

An overall conceptual framework that incorporates a set of connected cycles based on logistics processes involved in the flow of information and goods is depicted in figure 2 and was used to develop interview guides and analyse and evaluate the findings.

Figure 2: Logistics Processes as Response Cycles (Adapted from Persson, 1995)

4:1 Transaction

Lead-time is the elapsed time from identifying a need to satisfying it (e.g. time from when the health centre submits an order to when they receive drugs). Frequencies mean the number of events per time unit (e.g. orders per year). Uncertainties are fluctuations in demand, capacity, and lead–times as well as data accuracy. Expected Demand means specific demand patterns (e.g. cyclical variations such as typical seasonal disease outbreaks) and is particularly relevant to forecasting. In general, longer lead times, lower frequencies, higher uncertainties and uneven demand imply bigger stocks to safeguard against stock-outs, lower inventory turnover and less flexibility.

4.2: Structure

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Complexity is the number of distribution levels (e.g. storage at national, district and health centre level); and distribution points and the same level (e.g. number of district stores).

Divisibility means the degree of dependence between specific products (e.g. you cannot store measles vaccines without also having gas for the refrigerator). The more dependence, the greater the need is for coordination in procurement and other tasks. Predictability is the degree to which it is possible to specify the task to perform at a given point in time (e.g. what will an outbreak of a specific disease or a large donation of a specific drug imply in terms of impact on the existing supply chain and extra tasks that must be undertaken). In general, higher complexity, more dependency and lower predictability imply bigger stocks to safeguard against stock-outs, lower inventory turnover and less flexibility.

4.3: Management

Principles are methods (e.g. pull/push system, forecasting technique) used for managing the supply chain. Tools relate to how information is processed and communicated and the kind of systems used for inventory and ordering management (e.g. stock-cards, electronic order forms). The final point addresses how actors are organised in terms of responsibilities regarding specialisation and coordination (e.g. whether a third party service provider is used and how a cooperation agreement is set up). Consistent and differentiated principles supported by appropriate tools and an organisation balancing between specialisation and integration are essential factors for securing efficient goods and information flows.

4.4: Improving performance by changes in transactions, structure and management The framework proposes a number of strategies to improve performance (Persson 1995): (1) Reducing or redistributing (possibly increasing for some while reducing for others) lead times; (2) Reducing or adapting to uncertainties; (3) Redistributing or increasing frequencies;

(4) Eliminating or adapting to expected demand patterns; (5) Simplifying structures, systems and processes such as reducing the number of distribution points and/or distribution levels;

(6) Differentiate the way one works with suppliers, products and customers, and (7) Using postponement/speculation strategies so that changes in form, identity and location occur as late as possible in the supply chain. The overall goal of the strategies is to avoid high inventory with according costs and risks of obsolescence and damage, while also being able to provide flexibility, short and predictable delivery times.

5: FINDINGS

9 5:1: The state of health in the Karamoja Region

With an estimated one million people, Karamoja accounts for 3.25% of the total Ugandan population. It is also the poorest region in the country, with 87% living below the poverty line (UBOS, 2009). There are problems of drought, sporadic and brutal violence, cattle raiding and food insecurity. Meat from livestock, supplemented by cultivated vegetables, wild fruits and greens, make up the basic diet. A dual settlement system has traditionally allowed for the mitigation of vulnerability from drought and food insecurity with manyattas as semi-permanent housing near cultivated areas while kraals are mobile or semi-mobile livestock-camps. Cattle-raiding is a traditional activity among regional pastoral groups. Raided cattle are used to redistribute wealth and food in times of scarcity, to acquire bride price and to form alliances with other families, manyattas and tribes.However, over the past decade increased raiding has created insecurity in the region. Accordingly, major regional challenges can be summarized as poverty, security, drought, food insecurity, a culture of reliance on traditional medicine practitioners combined with scepticism for the government and public system.

Furthermore, up until this time ‘Karamoja receives little attention from international donors, agencies and organizations in comparison to the north-central region to the country (Stites et al, 2007).

Karamoja has an under-5 mortality rate of 177 per 1,000 live births, which is among the highest in the African region, a life expectancy of 47.7 years compared to the national average of 50.4 and a maternal mortality rate of 750 per 100,000 live births, which is significantly higher than the national average of 435. The main causes of death in Karamoja for adults and children are pneumonia, malaria, tuberculosis, anaemia followed by meningitis, AIDS, dysentery, malnutrition, septicaemia and diarrhoea (UNICEF 2009). The annual performance assessment makes it clear that the region has specific problems regarding health service delivery in comparison to other parts of Uganda with 4 of the 5 districts ranking among the the lowest 10% in the whole country (MoH, 2008f). Only 27.3% of the population is within a 5 kilometre range of access to health facilities in Kaabong district, 39.6% in Abim, 25.8% in Nakapiripirit, 15.02% in Moroto, and 29.8% in Kotido (MoH 2008e). There are few private pharmacies and drug stores in the region (I#13). Large volumes of unregistered drugs are used in the region, although most are for veterinary use, many are also used by people (I#13). Food insecurity makes the use of health system prescriptions even more challenging because often people do not have the strength to walk to health centres (WFP, 2009).

10 5:2: The state of drug supply chains in Karamoja

Using the conceptual framework the supply chain in Karamoja was mapped with regard to actors, activities and main lead-time elements for two of the six drugs – ACTs and Co-trimoxazole - as shown in figure 3. Orders are transported physically from the HCs to the District Health Official (DHO) via the health sub-district and then on to NMS where they are submitted into the electronic system and processed.

Figure 3: Lead-times, actors and activities undertaken in the response cycle of HC and NMS

Receive

The total average lead-time for an order to be fulfilled at the HCs is 61.2 days of which the ordering process from the health centre to NMS accounts for 20%, internal lead-time at NMS for 61% and transport from NMS to health centre for 19%¹. Table 2 below summarises the main findings from the field assessment and analysis with basis in the concepts presented in the previous section.

1Numbers based on average from previous studies (MoH 2009d), own assessment in Karamoja and interviews at district and national level. A conservative stance is taken, meaning that real lead-times are most probably longer.

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Table 2: Transactions, Structure and Management of the Drug Supply Chain(s)

Conceptual Framework &

Supply Chain Concept

Definition/Measure Main conclusions from field assessment

TRANSACTION Lead-Time Time from order to delivery

HC - NMS: 61.2 days of lead time

NMS - Suppliers of ACTs: 6 month lead time NMS - Suppliers of Co-trimoxazole: 5 month lead time

Frequencies How often orders and deliveries occur

HCs -order every 4 months

New NMS framework agreement for drugs established every 12-18 months

Uncertainties In lead-times for funding, ordering and transport.

Accuracy of data on demand, stocks, etc.

Large variations from one order to the next, between districts and for particular drugs Highly inaccurate data on consumption and stocks and ordered vs. received quantities (i.e. service level).

STRUCTURE Distribution Levels

Number of actors in order flow at district level

Number of storage levels in goods flow at the district level

Total of 4: Patient, HC, Sub Health District, DHO

1 or 2: HC (District Medical Store (DMS) if utilised)

Distribution Points

Number of health facilities

Total of 94 functioning in Karamoja: 5 hospitals, 4 HCIV, 29 HCIII and 55 HCII, 5 DMS, 1 NMS

Guidelines for quantification of ordering, storage and transport, but little knowledge and/or use.

Management Tools

What tools are used for forecasting, ordering, inventory management and transport

Hard-copy forms, no electronic data exchange, stock-cards and little means of communication apart from physically meeting each other. In fact there are three physical flows (i.e. requiring transport) involved: bringing the order form to HCs, bringing the filled form back through to NMS and bringing the drugs back to the HCs.

Organisation Efficacy of management structure and clear delineation of roles/responsibilities

Lack of clear roles, too many logistics

‘managers’ without adequate competency/capacity and lack of management support or coordination.

To conclude there are major deficiencies in the management of the supply chain with long and highly erratic lead-times. The complexity in terms of distribution levels and points is quite high, which poses particular problems for the flow of information including ordering and feedback regarding stock-outs and deliveries. The process is overly bureaucratic and unnecessarily complicated, allowing inconsistencies in practice even if the processes and responsibilities are theoretically clear. With regards to the sharing of responsibility between sub-health districts, districts and health centres, both concerning information and goods flows, the supply chain is characterised by inconsistent planning, forecasting, ordering and inventory

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management. Nor are appropriate tools used. This in turn leads to a lack of coordination between information and goods flows with the ordering process disintegrated from the follow up of the physical delivery of medical supplies which means information on what is delivered compared to what was ordered is lacking. As a result, there are significant bottlenecks in the present system which when combined with the inability of NMS to fulfil their critical supply role is cause frequent stock-outs, unnecessary expiration of drugs and high cost.