PFSCM's goals are to ensure reliable availability of essential products to programs in developing countries and to strengthen national supply chains to become sustainable mechanisms for delivering products to clients.
PFSCM is a legal entity established by JSI Research & Training Institute, Inc., and Management Sciences for Health. PFSCM, JSI and MSH are all non-profit organizations. The presidents and senior staff members of JSI and MSH serve as PFSCM’s Executive Committee. PFSCM itself has no staff; staff of JSI, MSH, and other team member organizations implement PFSCM’s projects through formal subcontract arrangements. More than 400 team member organization staff work on PFSCM projects.
PFSCM’s 13 team member organizations include non-profit organizations, commercial private sector corporations and academic institutions, providing the full range of technical skills needed to ensure reliable availability of essential products to international development programs.
A: The Partnership for Supply Chain Management is a nonprofit organization established in 2005 by two of the leading international health consultancy organizations in the U.S.—JSI Research & Training Institute, Inc. (JSI) and Management Sciences for Health (MSH), both nonprofits. PFSCM’s goal is to ensure reliable availability of essential products to programs in the developing world and to strengthen national supply chains to become sustainable mechanisms for delivering these products to clients.
Through its innovative projects, PFSCM:
Procures and distributes essential medicines and supplies
Provides technical assistance to strengthen existing supply chains
Collaborates with in-country and global partners to coordinate efforts in these areas
A: PFSCM is not a traditional procurement services agent in that we take a holistic approach to delivering integrated supply chain services (from quantification and forecasting to delivery) to ensure commodity security for our clients. Examples of ways PFSCM is different from a traditional procurement services agent are many. Under SCMS, PFSCM has negotiated indefinite quantity contracts (IQCs) with ARV manufacturers and other vendors that meet international best practice procurement requirements for PFSCM’s contracts. Furthermore, we require those vendors to provide the same terms, conditions and prices to other stakeholders working to address HIV & AIDS, whether those stakeholders are national or international organizations. To foster transparency, we share our procurement data with the WHO Global Price Reporting Mechanism and the Global Fund Price and Quality System, and we submit ARV registration status information to the WHO regulatory database. We share our forecasts and quantifications with vendors and other international organizations supporting health services to the developing world. Most importantly, in times of short supply, we work to minimize the effects of shortages for all stakeholders, not just our own clients.
All PFSCM team members are committed to developing the procurement and distribution capacity of host-country organizations. PFSCM assists countries in determining and implementing the most appropriate strategy for each supply chain component, whether managed internally or outsourced, to achieve best value.
A: PFSCM is a separate legal entity established by JSI Research & Training Institute, Inc. and Management Sciences for Health for the purpose of implementing the SCMS contract and similar work. All three organizations are nonprofit. The presidents and senior staff of JSI and MSH serve as PFSCM’s Executive Committee. PFSCM itself has no staff; staff of JSI, MSH, and other team members implement PFSCM’s projects through formal subcontract arrangements.
A: PFSCM is made up of more than 400 staff members from team member organizations that include nonprofit organizations, commercial private sector corporations and academic institutions, providing all the technical skills needed to ensure reliable availability of essential products to international development programs. PFSCM team members include:
Booz Allen Hamilton (USA) Crown Agents (USA and UK) i+solutions (Netherlands) Imperial Health Sciences JSI Research & Training Institute, Inc. (USA) Management Sciences for Health (USA) The Manoff Group (USA) MAP International (USA) North-West University (South Africa) Northrop Grumman (USA) UPS Supply Chain Solutions (USA) Voxiva (USA) 3i Infotech (USA and India)
A: Since PFSCM was established in 2005, we have delivered health commodities to countries in Africa, Asia, Eastern Europe, Latin America and the Caribbean and helped strengthen supply chains in more than 20 countries throughout the developing world. Through SCMS, we have operations in 20 countries, including Botswana, Côte d’Ivoire, Ethiopia, Guyana, Haiti, Kenya, Mozambique, Namibia, Netherlands, Nigeria, Rwanda, South Africa, Switzerland, Tanzania, Uganda, United Kingdom, United States, Vietnam, Zambia and Zimbabwe. PFSCM can also draw upon the physical presence of our team member field offices in over 90 countries.
A: PFSCM presently manages two large projects that aim to reduce the worldwide impact of HIV & AIDS, malaria and tuberculosis.
1. For PEPFAR, the Supply Chain Management System (SCMS)
In 2003, the U.S. President's Emergency Plan for AIDS Relief (PEPFAR) was launched to combat global HIV & AIDS—the largest commitment by any nation to combat a single disease in history. SCMS is a project of PEPFAR and is administered by the U.S. Agency for International Development (USAID). SCMS was established to ensure a reliable, cost-effective, and secure supply of high-quality medicines and health products for HIV & AIDS prevention, care and treatment. The project brings the hands-on involvement of dedicated staff from 13 public- and private-sector organizations and operates in 20 countries.
In September 2005, USAID awarded PFSCM the SCMS contract. PFSCM provides the following services for PEPFAR implementing partners worldwide:
Procurement and delivery of quality HIV & AIDS medicines and laboratory supplies at the best value, including ARVs, HIV test kits, laboratory supplies, drugs for opportunistic infections, food by prescription, home-based care kits and blood safety, injection safety and male circumcision supplies.
Technical assistance to transform in-country supply chain performance and support health systems strengthening, including forecasting and demand planning, quality assurance, warehousing and distribution, logistics management information systems, capacity building, strategic planning and laboratory logistics.
Global collaboration for long-term local and international solutions.
By establishing SCMS, PEPFAR and USAID recognized that a key impediment to HIV treatment in developing countries was the lack of effective supply chains for public health programs. SCMS has become a key partner in global efforts to scale up treatment for people living with HIV from about two million people in 2006 to about four million in 2009. SCMS now procures more than half of the ARVs provided under PEPFAR, supporting about one million people on treatment, and has facilitated scale-up by helping transform the performance of public health supply chains.
PFSCM has been recognized for its groundbreaking work in HIV & AIDS worldwide through the award of two additional contracts in 2009 to help fight tuberculosis and malaria.
2. For the Global Fund, Voluntary Pooled Procurement (VPP)
The Global Fund to Fight AIDS, Tuberculosis and Malaria is a major financing institution in the fight against these diseases in 140 countries. The Global Fund established a Procurement Support Service for its Principal Recipients, with Voluntary Pooled Procurement and Capacity Building Services aimed at ensuring a cost-effective and efficient procurement process. These services provide support to countries to resolve procurement bottlenecks and supply chain management challenges and facilitate timely access to pharmaceuticals and health products.
Through VPP, Principal Recipients can take advantage of the benefits of pooled purchasing including:
Efficient, timely and reliable procurement
Stringent quality standards for products procured through VPP
Attractive pricing for key healthcare commodities
In March 2009, the Global Fund selected PFSCM as its VPP Procurement Service Agent.
PFSCM provides the following services to VPP:
Manages and coordinates procurement needs for antiretroviral drugs, Artemisinin combination therapy drugs and non-VPP products (e.g., other related drugs, lab supplies, reagents, test kits, condoms, etc.).
Provides secure delivery to the final delivery point in country, with track and trace capabilities
Assures appropriate standards of quality, safety and efficacy for all purchased products
Maximizes savings opportunities in all parts of the supply chain
VPP provides capacity building services through separate contracts, called the “Capacity Building Service and Supply Chain Management Assistance (CBS/SCMA) initiative,” rather than combining them with procurement and distribution under a single umbrella as in the SCMS contract.
In addition to these major contracts, PFSCM has implemented a number of smaller procurement contracts for both USG-funded donors (such as the Elizabeth Glazer Pediatric AIDS Foundation, Catholic Relief Services and Harvard University) and for global development agencies, including the WHO and the World Bank. PFSCM has also been contracted directly by other governments, including Sierra Leone and Ethiopia.
A: The two major contracts are distinct agreements between PFSCM and two different donors. The contracts have somewhat different objectives, scopes of work and requirements, and PFSCM has different teams to manage and respond to each client’s needs. Each contract has a dedicated core staff who are responsible to the donors and their ultimate beneficiaries. Nonetheless, we leverage the clear synergies between SCMS and VPP to add value and reduce costs for all these clients. The ability to pool procurement across the world’s largest public health care programs enables us to achieve optimal pricing, ensure a stable supplier base, and help coordinate country supply plans. Drawing talent from our experienced staffing pool helps us ensure that required resources are available to all these projects as needs change over time and enables us to share market knowledge (such as new product intelligence) and operational details (such as country supply plans) for the benefit of all. We share fixed costs across all clients as appropriate, thus minimizing operational costs to each. Our project management and accounting systems ensure that costs are properly and fairly allocated among the projects.
A. PFSCM’s goal is to ensure that our clients receive the best value for their procurement expenditures. Typically, organizations believe the procurement agent’s main function is to obtain the lowest cost for each product or service it is requested to purchase. For many commodities, price may be the primary factor in deciding which supplier will be awarded the business; however, lowest price may not always result in best value for the client. For PFSCM, best value is a guiding principle in which the selection criteria includes important considerations beyond price. Each criterion has a weighted value; these are totaled to generate a final ranking of suppliers. Additional considerations beyond price may include, but are not limited to:
Performance (including on-time delivery and other factors)
Strategic decisions (e.g., spreading volume/value over multiple vendors, ensuring that PFSCM does not represent more than 50 percent of a vendor’s business)
Responsible supplier (financial position, operational performance record, business ethics)
Avoiding an over-dependence on any one supplier
Supplier long-term viability
In pursuing best value, PFSCM works to achieve the lowest possible cost by leveraging purchase volumes across many recipients, negotiating long-term contracts with suppliers, and buying generic antiretroviral and other pharmaceuticals whenever possible. By working with recipient countries to better plan their commodity needs, PFSCM is also increasingly switching from air freight to lower-cost sea and road freight. Savings are typically over 80 percent for sea shipments and over 50 percent for road freight compared to air freight for the same route.
A: PFSCM procures different products for each of our three projects.
For SCMS, PFSCM procures most products needed for a comprehensive HIV & AIDS care and treatment program, including:
Laboratory equipment and medical supplies
Medicines to treat opportunistic infections, such as tuberculosis and malaria
Medicines and supplies for palliative and home-based care
Products for food-by-prescription programs
Material handling equipment for warehouses and medical stores
Commodities for Early Infant Diagnosis
Voluntary Medical Male Circumcision Kits
Commodities for Blood Safety
Commodities for Preventing Mother-to-Child Transmission
Automated Analyzers and reagents for the detection of CD4 and Viral Load
Consumables for the Use of Malaria Rapid Diagnostic Tests
For the Global Fund’s VPP mechanism, PFSCM procures antiretroviral drugs, Artemisinin combination therapy drugs and non-VPP products (e.g., other related drugs, lab supplies, reagents, test kits, condoms, etc.) utilizing the VPP mechanism.
A: PFSCM provides a full range of supply chain services, including:
Procurement of essential medicines and supplies
Management of international shipments from supplier to point of delivery
Warehousing and distribution services that leverage regional distribution centers in Ghana, Kenya and South Africa
Secure delivery to the final delivery point in country, with complete track and trace capabilities
Quality assurance to ensure safety and efficacy of all products
Collaboration with partners in forecasting, quantification and supply planning, which starts at the service-delivery level and reaches back to accurate forecasts of supply at the active pharmaceutical ingredient (API) source
Technical assistance to partners and recipients to strengthen existing supply chains
Collaboration with in-country and global partners to coordinate efforts
PFSCM’s efforts provide best value and maximize savings to recipients, not only in the price of the product, but also in the cost of freight movement and insurance.
A: PFSCM operates a competitive and transparent procurement system. By leveraging purchasing power across many recipients and countries, negotiating long-term contracts with our suppliers, and buying generic ARVs and other pharmaceuticals whenever possible, we achieve the lowest possible cost for the products we buy. We can frequently save our clients up to 80 percent in shipping by switching from costly air freight to sea and land. Parties interested in PFSCM’s procurement service agency (PSA) services should first look to the SCMS e-catalog as an indicative list of items we most frequently purchase.
Product lists for key PFSCM clients can be found at the following websites:
A. The Global Fund's key objective in establishing the Voluntary Pooled Procurement mechanism is to ensure that countries obtain best value for their procurement funds and that the needed commodities arrive in good time to support those affected by HIV & AIDS, TB and malaria. As part of this effort, the Global Fund is establishing a mechanism to provide needed technical assistance and consultancy support to enable countries to build their capacity to manage their in-country and international supply chains. PFSCM holds one of two contracts for global procurement and distribution. A number of PFSCM’s team member organizations have bid successfully on the technical assistance work, though the contracts are not yet finalized. SCMS already includes a provision for such technical assistance. Through SCMS, PFSCM is providing major support in warehouse and distribution, procurement, logistics management information systems, quality assurance and other areas of the supply chain as needed.
A. PFSCM’s regional distribution centers (RDCs) are state-of-the-art commercial warehousing facilities that presently operate in Ghana, Kenya and South Africa to store and distribute frequently requested essential medicines and other health products. RDCs enable shorter delivery times than ordering directly from the manufacturer, trimming the turnaround time from three to four months to between four to six weeks for planned orders. By working with clients to plan ahead, we leverage sea freight into RDCs and road freight to final delivery points. This has saved SCMS clients more than $24M in freight costs over the cost of direct air freight as of December 2009.
PFSCM partners provide additional distribution resources. Our team member, Imperial Health Sciences, is prepared to invest in additional RDCs in other locations as volumes of product and number of clients warrant. We have also established a regional consolidation service (RCS) in India at an existing distribution center operated by our team member UPS Supply Chain Solutions to facilitate consolidation and sea shipment from Indian suppliers. Our team member i+solutions currently maintains a contract with Goes Handling Center, a pharma-quality distribution center located 30km from Schiphol Airport in Amsterdam and 40km from seaport Rotterdam, which we can use to provide regional consolidation services for products sourced in Europe as national registration requirements permit. Our team member MAP International maintains a distribution center in Brunswick, Georgia, which can potentially serve Latin American clients.
Note that use of RDCs requires the ability to purchase product ahead of confirmed orders.
A: PFSCM offers a unique approach to the management of shipping and delivery into resource-constrained environments. Through our team members UPS and Imperial Health Sciences, we employ third-party logistics (3PL) commercial best practices to provide a competitively priced, flexible response—one that accommodates different contract terms for delivery from multiple origins to multiple destinations, and IT systems to monitor shipments from origin to delivery. Complete visibility of products in our pipeline allows us to control the chain of custody and prevent substitution of counterfeit goods. For international shipments, UPS obtains discounted freight rates by combining PFSCM’s volumes with those of it's commercial clients to negotiate with commercial carriers. The active management of each individual shipment by UPS and Imperial Health Sciences—who choose carriers on a best-value basis (considering lead times, service-level history, security and cost)—allows recipients to select the balance of service and cost that meets their needs. We thus obtain benefits for customers that would otherwise be unavailable.
A: Establishing long-term relationships with vendors is an important component of our supply chain strategy. Antiretrovirals, rapid test kits, and many frequently requested commodities are procured, whenever possible, under indefinite quantity contracts (IQCs). The e-catalog lists a range of products we can provide for the SCMS project. Vendors can also view VPP product information.
If your company offers items listed in our SCMS e-catalog or similar products that may be used in HIV & AIDS, TB or malaria programs, please monitor PFSCM’s Request for Proposals for contract opportunities. You may also contact us to provide details of your products and discuss opportunities to work together. Our procurement process adheres to international best practice for public procurement and complies with the specific requirements of the U.S. government for SCMS and the Global Fund for VPP. PFSCM is committed to providing best value for its clients and is constantly seeking opportunities to provide better services at lower prices. Vendors interested in becoming a supplier to PFSCM under one of its agreements should forward relevant information to email@example.com.
A: Our long-term field presence at this time is funded exclusively through the SCMS project; the Global Fund does not provide such assistance through their contracts with us. However, SCMS’s mandate from our USG/PEPFAR managers includes collaboration at the national level with all stakeholders in the fight against HIV & AIDS. For example, SCMS staff help ministries prepare national forecasts, quantifications, and supply plans that typically include all donors and products. SCMS offices monitor the in-country supply situation, and help host-country organizations respond to or prevent shortages and stockouts. With approval of their USG managers, SCMS field offices will continue providing such assistance to country programs.
A: No. Much international development commodity spending is highly fragmented, with wide variations in prices paid, competition among recipients for access, and a general lack of ability to negotiate large-scale, long-term contracts with key suppliers. PFSCM works to obtain best value by aggregating demand across all three programs, thus ensuring maximum purchasing power to achieve best prices on the global market—and best service levels from vendors. With this leverage, we can obtain the lowest landed cost of commodities while providing the most responsive service possible.
We are careful, however, to ensure that this pooled procurement strategy does not adversely limit the marketplace. Where there is more than one manufacturer for a particular product, we procure from multiple vendors to ensure that the market remains robust, rather than purchasing only the least-expensive product. (See discussion of best value above.) Our procurement processes are transparent and competitive, allowing suppliers multiple and repeated opportunities to compete. As stated above, under SCMS we have negotiated indefinite quantity contracts (IQCs) with ARV manufacturers and other vendors that meet our own procurement requirements but also require those vendors to provide the same terms, conditions and prices to other stakeholders addressing HIV & AIDS, whether those stakeholders are national or international organizations.
Thus our pooled procurement efforts aim to ensure that manufacturers cannot monopolize particular segments of the market and a that we do not become a monopoly.
A: All PFSCM team members are committed to developing the procurement and distribution capacity of host-country governments, and local and non-governmental organizations. PFSCM assists countries in determining and implementing the most appropriate strategy for each supply chain component, whether managed internally or outsourced. Under the SCMS contract, PFSCM works with its clients in each country to address these issues and agree on joint strategies that include:
Organizing joint supply chain planning discussions to address commodity requirements, funding for short- and long-term needs and the required human and systems resources to support sustainable supply chains.
Conducting a gap analysis to define the minimum requirements for each of the key supply chain components and associated indicators of individual, organizational and institutional capacities required.
Identifying and selecting development strategies and immediate actions to address identified gaps such as funding shortfalls, potential stockouts, individual training/performance improvement needs, organizational development interventions or larger policy analysis and policy development initiatives.
Agreeing on the monitoring and evaluation plan for the strategies to be implemented.
Implementing, monitoring and evaluating to inform the next round of planning in the following year, and to facilitate course corrections when performance is off target.
A: PFSCM tests products for compliance with specifications and helps host-country organizations create standards and systems that help ensure quality. We work with USAID, the U.S. Centers for Disease Control and Prevention (CDC), other U.S. government stakeholders and North-West University in South Africa, to ensure vendors and organizations that provide commodities are competent to provide needed services.
North-West University provides laboratory testing support and is a WHO pre-qualified laboratory and is accredited to ISO 17025 standard. The university offers risk-based quality assurance analysis, physical examination, sampling and testing to ensure pharmaceutical quality. PFSCM participates in discussions with WHO and CDC on establishing specifications and standards for lab equipment, rapid test kits and reagents to recommend to countries. We use a U.S. FDA-inspected laboratory to assist with the analysis of therapeutic food products. For VPP, we use the appropriate quality assurance standards recommended by WHO and as applied by the Global Fund. These can be found at the following websites: