Improving Health Outcomes through Performance Monitoring of Supply Chain Management in

Public Health Programs

APHA ConferenceDenver, CO

November 2010

Dana AronovichLinda Allain

Adriano SommerlatteMarie Tien

Kelly Hamblin

Learning Objectives

• Identify a number of metrics for monitoring supply chain management performance for public sector health programs.

• Describe how these metrics can be used to improve health product availability to support public health programs and to improve health outcomes.

Supply Chain Performance—Key to Health Outcomes

Positive health outcomes depend on the reliable availability of critical medicines and other medical supplies

Availability of these commodities depends on an effective and efficient supply chain from the port of entry to the most remote service delivery point

Improving supply chain performance requires information about current performance

Performance must be measured to uncover inefficiencies and to take action to correct them

“Without a standard, there is no logical basis for making a decision or taking action.” Joseph Juran

Why do we monitor and evaluate?

Improving program management and system performance Monitor program/system performance Provide feedback Evidence-based decision making and work planning for

improved performance Mobilize Resources (financial, human, etc.)

Accountability Results reporting Determination of impact

SCM Performance Measures Matrix by Function

Types of

indicators

SCM Function

Quality Response Time Cost/Financial Productivity

Product Selection/ Forecasting /

Procurement

Supplier/Sourcing (from purchaser’s perspective)

Warehousing/Storage

Inventory Mgmt/ LMIS/Customer Response

Distribution/Transport

Performance Measures

Layout of the GuideChapters are divided by supply chain/logistics function. Within each

chapter there are four types of indicators:

1) Quality2) Response Time 3) Cost/ Financial4) Productivity

Distribution/TransportQUALITY

A.On-Time Arrivals•Definition

This indicator measures the percentage of shipments arriving on time for a set delivery date, during a defined period of time.

Formula

(number of shipments arriving within agreed-upon time window/total number of shipments) × 100

Purpose and Issues

Late deliveries can cause stockouts, not only at the receiving facility but throughout the in-country network. It can indicate transportation problems in the system; for example, the condition of vehicles and difficult terrain can indicate the need to adjust schedules or driver performance issues, accordingly. It can be applied to a specific product, route, or health post.

Data Sources Data Requirements

Vehicle logsDistribution schedulesInvoices or requisition and issue forms indicating receipt date.

Schedule of desired delivery datesActual receipt dates according to requisition and issue formsTotal number of shipments during specified time period.

Related Indicators

•Average delivery time for a specific route

Each indicator has a title. The number of indicators per supply chain function per type varies.

A more detailed description of the indicator follows in the table.

Selecting “SMART” Indicators

• Specific: objective clearly speaks to the single problem that it is intended to address.

• Measurable: includes benchmarks, or points of reference, to compare results to later on.

• Appropriate: the objective is related to and clearly supports the goal.

• Realistic: the capacity and resources are available and can be used to reach the objective.

• Time-bound: objectives are planned over time such that they can be met and are measured within a specific timeframe.

“Not everything that counts can be counted, and not everything that can be counted counts.”

Examples of performance measures

by supply chain function

and type of indicator

Product Selection/Forecasting/Procurement

QUALITY– Forecast accuracy: % difference between forecast/actual use– % of procured products registered in country

RESPONSE TIME– Lead time for purchase orders/contract award

COST/FINANCIAL– % of average international reference price paid

PRODUCTIVITY– % of purchase orders/contracts issued as emergency orders

Supplier/Sourcing (from purchaser’s perspective)

QUALITY– Order compliance: % of orders meeting set criteria

RESPONSE TIME– On-time delivery by requested delivery date

COST/FINANCIAL– Total supply cost

PRODUCTIVITY– Supplier fill rate: % of orders filled completely

Warehousing/Storage

QUALITY– Inventory accuracy rate (no discrepancies)

RESPONSE TIME– Put-away time from arrival at WH shelf

COST/FINANCIAL– Value of product damaged in warehouse

PRODUCTIVITY– Storage space utilization: space used/space available

Inventory Management/LMIS/Customer Response

QUALITY– Stockout rate

RESPONSE TIME– Order lead time: order placed order received

COST/FINANCIAL– Value of unusable stock due to expiration/damage

PRODUCTIVITY– Facility reporting rates

Distribution/Transport

QUALITY– On-time arrivals: % shipments arriving as scheduled

RESPONSE TIME– Average delivery time from dispatch to destination

COST/FINANCIAL– Average transportation cost per km/m3/kg of product

PRODUCTIVITY– Container capacity utilization per vehicle

Application of the Performance Measures

INCREASE PRODUCT AVAILABILITY FOR IMPROVED HEALTH OUTCOMES

Monitor system performance During supervision/management reviews

Provide routine feedback Information must move up and down the supply chain

Improve program management Evidence-based decision making and work planning for

improved performance

Improve system performance at all levels of the supply chain

Report results and determine impact

What gets measured, gets done. (Peter Drucker)

No product? No program!