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No Product? No Program. Logistics for Health
Logistics Matters: Why Policymakers Care about
the Supply Chain
Logistics Matters: Why Policymakers Care about
the Supply Chain
Carolyn HartMini-University
Implementing Best Practices in Reproductive Health
Cairo, February 2002
No Product? No Program. Logistics for Health
The Supply ChainThe Supply Chain
“No customer should ever leave a clinic disappointed because the product he or she needs is out of stock.”
Programs That Deliver, p. 28
No Product? No Program. Logistics for Health
The Purpose of the Supply ChainThe Purpose of the Supply Chain
To serve the customer by delivering
• The right goods
• In the right quantities
• In the right condition
• Delivered to the right place
• At the right time
• For the right cost.
No Product? No Program. Logistics for Health
Contraceptive SecurityContraceptive Security
• When a program– Accurately estimates requirements– Has the financial resources– Has the technical skill to procure the products– Ensures reliable and timely delivery to the
customer
• For the medium- to long-term
No Product? No Program. Logistics for Health
The Supply ChainThe Supply Chain
No Product? No Program. Logistics for Health
The Logistics CycleThe Logistics Cycle
No Product? No Program. Logistics for Health
Redefining LogisticsRedefining Logistics
• A revolution in the commercial sector – From “logistics” to “supply chain management”
• Mission-critical function in any business or service delivery organization– A determinant of organizational viability– A guarantor of customer service
No Product? No Program. Logistics for Health
How the Supply Chain ContributesHow the Supply Chain Contributes
• Improving customer service
• Saving money
• Increasing program impact
Increasing customer loyalty
Boosting profitabilityIncreasing market
share
No Product? No Program. Logistics for Health
Customer ServiceCustomer Service
• Product quality• Method choice• Product availability
• Customer confidence• Customer loyalty• Customer retention
No Product? No Program. Logistics for Health
MoneyMoney
• Logistics protects the investment in commodities
• Logistics protects the much larger investment in other program costs
• Good logistics increases revenue potential– You cannot sell what you do not have
No Product? No Program. Logistics for Health
MoneyMoney
Good logistics brings savings– Increased efficiency– Reduced waste– Improved accountability
To help meet program priorities– Contraceptive security for all – Free, subsidized, and fully-paid “markets”
No Product? No Program. Logistics for Health
ImpactImpact Kenya STI Kits
No Product? No Program. Logistics for Health
ImpactImpact
Logistics contributes to program impact.
No Product? No Program. Logistics for Health
The Supply ChainThe Supply Chain
No product?
… No program.
No Product? No Program. Logistics for Health
Industry Leaders vs.Industry AveragesIndustry Leaders vs.Industry Averages
• Meet delivery dates 17% more frequently
• Carry 60% less inventory
• Spend 44% less on supply chain costs
• Meet customer-request dates 95% of the time … through
Unwavering executive supportCustomer-focused, integrated supply chainsNot rules, regulations, or trade policy
No Product? No Program. Logistics for Health
Best Practices to Improve Supply Chain PerformanceBest Practices to Improve Supply Chain Performance
• Step 1: Focus on customers
• Step 2: Focus on consumption data
• Step 3: Focus on “supply chain integration”
No Product? No Program. Logistics for Health
Step 1:Focus on CustomersStep 1:Focus on Customers
• Not on goods
• Not on budget cycle
• Not on bureaucratic rules and regulations
And who is the customer ??Ultimate: clients at the SDPsIntermediate: next level down the supply
chain
No Product? No Program. Logistics for Health
Step 2: Focus on Consumption DataStep 2: Focus on Consumption Data
• “Quantities dispensed to clients”
• Logistics MIS isn’t easy:– Forms, manuals, job aids– Timely reporting by brand from every facility– Procedures for processing and use of data– Training and supervision at every facility in the
distribution system– Automation, in large systems with many products
• Logistics MIS isn’t Health MIS
No Product? No Program. Logistics for Health
Step 3: Focus on “Supply Chain Integration”
Step 3: Focus on “Supply Chain Integration”
No Product? No Program. Logistics for Health
So, what does it take?So, what does it take?
• Commitment to product availability one customer at a time
• Agreement to the supply chain view of contraceptive security
• Commitment to integrated supply chain management– Customer focus– Strategic collaboration and information sharing– Much longer planning horizons and commitments
No Product? No Program. Logistics for Health
No product? No program.
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