RECOMMENDATIONS, IMPACT AND CONCLUDING REMARKS

Based on the analysis with conclusions concerning major problems in the supply chain, solutions were developed and recommendations for improvements suggested. Built around the principle of supply chain simplification and with a basis in limited capacity and resourcing at HC-level, it is suggested to place less responsibility for SCM on the HCs and instead develop stronger district supply chain hubs. By moving the order point upstream from the HCs to the district, at least for those HCs with inadequate capacity and competence to do it themselves, the system can be simplified with increased specialisation of roles and fewer bureaucratic impediments. The sustainable solutions proposed are built on process logic where the districts make the order on behalf of the HCs which is based on HC monthly stock reports, whereupon the districts receive the medical supplies from NMS, whereby they are then distributed to HCs in accordance with needs estimated from stock-reports and forecasted demand. The forecast should take into account historical consumption plus additional data on seasonal demands and changes in population for each HC. Accordingly, more responsibility is given to the districts (along with required corresponding resourcing of logistics competencies and capacity) for ensuring the last mile of the distribution affording the HC-staff more time to treat patients and focus on reporting correct information about present stock levels. Linked with this transfer of responsibility is also the suggestion of moving safety stock from the 94 HCs to the 5 DMS.

As shown in table 3 below other suggestions include ‘quick-wins’, i.e. solutions that do not require major changes of the system itself but are necessary to rapidly reinforce the system and subsequent more sustainable solutions. The purpose of ‘quick wins’ are meeting problems related to lack of sufficient storage in HCs (#1), transport means (#2), competence and capacity of staff at HC (#3) and inefficient ordering (#4).

Table 3: Solution impacts on lead-times, safety stock and ordering frequencies

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Solutions Improvement strategies from framework: Impact on lead-times, safety stock and order frequencies

Storage Improvement Kit and Storage Remedies (Quick Win #1)

Improvement in stock-keeping at HCs results in more accurate record keeping and thus better basis for correct ordering. This reduces uncertainty and

order lead-time to NMS.

Temporary Transport Loan Program (Quick Win #2)

Better access to transport reduces uncertainty and transport lead-time from NMS to HCs

Process Guideline Posters and Rapid Training (Quick Win #3)

Training and clear processes will bring an improvement in stock-keeping and stock management at HCs resulting in correct ordering. This will reduce

uncertainty and order lead-time to NMS.

Electronic Data Exchange (Quick Win #4)

Electronic submission of orders reduces order lead-time to NMS and internal lead-time at NMS as well as uncertainties.

Incorporation of District Logistics Advisor (Sustainable Solution #1)

An improved forecasting and ordering process while ensuring that the correct data is inputted reduces order lead-time to NMS and internal lead-time at NMS. Through a more efficient order process, order frequency can increase.

Establish Forecasting Process and Move Ordering to District Level (Sustainable Solution #2)

As above, but even more reduction in lead-time. Simplification of the structure by moving order point and incorporating sub-health district and

district levels with the district store, i.e. reducing complexity by fewer distribution levels and points and use of postponement. Better forecasting

also means adapting to demand patterns.

Simplify and Reduce

Reduction in transport lead-times particularly at the district levels.

Establish Buffer Stock (Sustainable Solution #5)

Establish 1 month safety stock in each DMS. Because of fewer uncertainties in the system, lead-times will be reduced. Safety stocks at health centres reduce accordingly. This means reducing the number of distribution points

for stocks as well as postponing movement of stocks until they are needed at HC.

Hence, in accordance with the conceptual framework overall changes include simplification of structure, transactions and management by reducing lead-times, increasing frequencies, adapting to and reducing uncertainties, reducing complexity by moving the customer order point upstream and strengthening the supply chain role of the district, reducing complexity by moving safety stock from HCs to DMS, improving information and communication principles and tools and improving coordination for better use of limited resources, clarify and strengthening the supply chain role of the district.

The suggested solutions were tested in terms of quantification of their impact on lead-times and costs by developing a model to simulate the different solutions. This is reported elsewhere (Global Emergency Group, 2010). With basis in order frequency, lead-time, consumption data and cost estimates, the model calculates order quantity, average units in

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stock and safety stock levels using basic logistics equations. From this follows comparisons of total costs between the current system and partly or full implementation of the recommendations, taking required investments to implement the suggested solutions into account. The purpose of the modelling exercise was to clarify and demonstrate basic links between important logistical characteristics, thus providing better decision support and argumentation for suggestions and ease the implementation phase. UNICEF intends to start implementation as soon as possible which means the study will have practical implications for the health of the Karamajong.

Concerning theory, the study has contributed to further development of a basic model on logistics process redesign in terms of applicability in a different context within which it was originally developed. The application of the model demonstrates its strengths in terms of simplicity and usefulness when information is scarce, data collection is challenging and the main group of stakeholders have competence in other areas, such as health, than logistics and supply chain management. Furthermore, additional publications from the study will demonstrate how simple tools for quantification of impacts from solutions suggested from theory (Persson, 1995) can be developed and demonstrated by presenting the calculation model and tests that were developed as part of the project. Further research will focus on reporting on and refinement of the modelling approach to determine costs with more accuracy, while also developing a tool for practical use in terms of setting optimized order quantities and safety stock levels. Given the constraints in data availability and means of registration, there must be a continued focus on simple and applicable tools for use in a context which also in the foreseeable future will be characterised by lack of financial resources, infrastructure, competence and capacity.

The study on which this paper is based provides substantial data and knowledge on an issue of great importance in most developing countries, namely how to improve logistics and supply chains for drugs which is an essential part of any health system. As such it contributes with empirical evidence much needed in humanitarian logistics. Further research should link studies like the one presented here with another area of research, namely that on global health supply chains (e.g. Chick et al. 2008).

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