2021, a year of growth and opportunities despite continued supply chain disruptions
Looking back, 2021 was a busy, but rewarding year for PFSCM.
We continued to meet the changing needs of our clients, and despite ongoing COVID-19 related supply chain challenges we processed more orders for more countries, and delivered more shipments than the year before.
In 2021, we processed almost 3,000 orders valued at $561 million for 96 countries, and delivered 2,251 shipments. We delivered an average of 187 shipments a month; this is the highest monthly average since 2016. July was the busiest month for deliveries this year with 291 shipments.
We would not have been able to achieve such excellent figures without our highly skilled and dedicated staff. With the right people on our team we were able to undertake several new initiatives to drive supply chain efficiencies.
These initiatives include the implementation of our Supplier Relationship Management (SRM) system, the launch of our online e-Catalog and traditional catalog, the piloting of real-time data loggers for cold chain shipments, and the refinement of our Environmental, Social, and Governance Plan.
Other major accomplishments for 2021 include meeting all the quality management system requirements of our annual ISO 9001:2015 surveillance audit, completing 15 supplier prequalification audits remotely, and closing out an Operational Excellence project that automated and streamlined many of our billing and financial processes and reports.
Meanwhile, we also extended our work for the New Horizons Collaborative by undertaking a Monitoring and Evaluation project in several African countries, we extended our contract for procurement services for El Consejo Nacional para el VIH y el Sida (CONAVIHSIDA) of the Dominican Republic throughout 2022, and successfully handed over a Centre of Excellence project undertaken with our parent company JSI Research Training Inc. and other partners for Ethiopia.
Our work as an official procurement services agent for our main client The Global Fund’s Pooled Procurement Mechanism is ongoing. In support of the Global Fund’s COVID-19 Response Mechanism, PFSCM facilitated the procurement of more than $335 million worth of COVID diagnostics products for 89 countries, while maintaining an OTIF rate of 83% on 738 shipments delivered.
These are just a handful of the achievements that we are proud of in 2021. Next year, we will continue to build on these successes and further refine our new tools, technologies and initiatives to ensure we maintain the stability and agility needed to be responsive and relevant in the ever-changing global health landscape.
COVID-19: the supply chain challenges and opportunities
From a supply chain perspective COVID-19 continued to have a rippling effect on the supply and transportation of medical devices. Pharma manufacturers to some extent still face problems with API shortages, and recently medical device manufacturers also sounded the alarm on the scarcity of semiconductors. Freight options for health logistics have become increasingly expensive and in the logistics sector too, disruptions continue especially with lockdowns and the cancellation of passenger flights caused by the latest COVID-19 variant.
These ongoing supply chain challenges also result in supply chain professionals taking additional strain trying to solve and overcome these issues. The health, safety and wellbeing of our staff remains our number one priority. Since the COVID-19 pandemic we have launched several initiatives to help staff with stress management to maintain their mental and physical health. We continue to offer our staff flexible, hybrid, or entirely remote working options depending on what they feel most comfortable with. We have also modified our offices to ensure that staff members opting to work from there – when appropriate – have enough space to conduct their work safely.
Amid all these challenges we have also been presented with many COVID-19 related opportunities. We have been supporting the Global Fund’s COVID-19 response since early 2020. For us, this meant rapidly emerging ourselves into the world of COVID-19 diagnostics. We have investigated the market intensively, and have floated various RFPs to understand, evaluate and contract suppliers of reliable and approved COVID-19 diagnostics.
In 2021 alone, we processed almost 1,400 orders for COVID-19 related products valued at $335 million for 89 countries, and delivered 738 shipments. These volumes are not surprising as testing remains a critical preventative measure in many low and middle-income countries that are still struggling to ensure equitable access to COVID-19 vaccines. In fact, we believe COVID-19 testing will continue to be a critical preventative measure even as COVID-19 vaccination campaigns continue. The detection of new COVID-19 variants may also continue to drive the demand for diagnostics; and the demand for sequencing equipment, reagents and other consumables. On the topic of sequencing, we recently strengthened our offering for Next Generation Sequencing laboratory equipment by creating a guidance document and onboarding reputable NGS suppliers. With our newly-gained COVID-19 NGS knowledge we aim to work closely with our clients’ recipients to ensure they receive the best procurement advice for these critical but complex and expensive machines, reagents and consumables.
Apart from just becoming experts in the sourcing and procurement of COVID-19 diagnostics, we also deepened our experience in cold chain shipping, which is often a requirement for COVID-19 diagnostic products like reagents.
More highlights of 2021
PFSCM had notable achievements across all areas and divisions of our business, but we would like to highlight some of the key achievements from our main areas of work which include Product Quality Assurance, Sourcing and Procurement and Health Logistics.
PFSCM’s quality management and product quality assurance activities are extensive, apart from passing our annual ISO 9001:2015 surveillance audit, which entailed 12 internal audits, and 18 self inspections, we also achieved other successes:
- We joined QUAMED, a not-for-profit membership association dedicated to increasing access to quality medicines using pharmaceutical audits, training and advisory services.
- We created a cloud-based Knowledge Library to house standards and guidelines published by international, and regional bodies pertinent to scope of products procured and supplied by PFSCM. The library makes it easier to track,and compare new and existing regulations.
- We evaluated, and added thousands of specific and generic products including their manufacturing sites to our One Network Control Tower. The management of this product information ensures that our offering meets the needs of our clients, and aligns with international standards. This information feeds into our catalogs and that of our clients, and makes it easier for recipients to place orders for health products.
Strategic supply chain
Strategic and tactical supply chain management is a major component of PFSCM’s business, and an area in which we made rapid progress in 2021.
Firstly, we implemented a new Supplier Relationship Management (SRM) system from Kodiak Rating. The SRM system enables us to onboard, evaluate and prequalify new suppliers quicker and easier, update existing suppliers’ details more efficiently, better manage and organize our suppliers’ information and documentation, streamline communication and keep a secure, and compliant audit trail of supplier documentation.
The SRM system will make it easier for our suppliers to provide and manage general business information and supporting documents such as due diligence forms, financial data, and quality management system certificates.
With the new SRM system we have more visibility into our suppliers’ social, ethical and environmental performance, and can use this information to create a more sustainable supply chain.
Ultimately, the SRM helps us to speed up procurement processes while still making sound fact-based decisions.
Secondly, we launched our online e-Catalog and traditional PDF product catalog to provide buyers a glimpse into the various products we source and procure. The catalogs mainly cover medical devices, and it includes the various product options and variations such as size, colors, kits, configurations and more. The online e-Catalog contains the names, descriptions and item codes of all the health products we procure.
Using PFSCM’s e-Catalog buyers can:
- Browse and search all our products.
- See product descriptions and SKUs.
- Create Wishlists containing products they want to procure from us.
- Mark products they buy often as Favorites.
Thirdly, we had a combination of sourcing, contracting and tendering successes.
- We onboarded several new suppliers, and among these are 16 new suppliers for COVID-19 health products onboarded in Q3 alone.
- As a result of several tenders floated we established all-inclusive and indefinite quantity contracts with several suppliers; these activities helped us to achieve excellent product price reductions and thus savings which are returned to donors for reinvestment in their health programs.
- We also procured diagnostics products locally in Africa at a price comparable to that of importing via ocean freight. Local sourcing is often more expensive than importing; we are thus very happy to have built relationships with local suppliers, who can support us in our mission to procure closer to demand.
PFSCM’s recent digital transformation has resulted in the optimized use of tools and technologies.
One tool that has come to fruition in 2021 is our Load Optimization tool that filters large volume and high value orders, and flags shipments, which may qualify for review. Such shipments are evaluated to determine if optimal packing and palletizing configurations are used by the suppliers and 3PLs.
Early in 2021, we had a breakthrough when it discovered that various rapid diagnostics test kits from one of our main suppliers could be double-stacked (two pallets on top of each other) during containerized ocean shipping to avoid the need for repalletization in countries where only single-stacked or low pallets (under 1.5 m) are allowed into warehouses. By double-stacking the pallets, repalletization is removed from the shipping process, and about 10% of the total freight cost is saved; at least for one specific kind of RDT that was piloted in 2021.
We also worked with a COVID-19 diagnostics manufacturer to help them optimize the palletization of their COVID-19 test kits. This resulted in over $1million in savings for our main client.
Further, in 2021, we partnered with insurtech company Parsyl to deploy data loggers in all our cold chain and temperature controlled shipments.
Data loggers, or sensing devices monitor and capture valuable information about the temperature and humidity commodities are exposed to during transportation and storage. This information can be used to better understand shipping conditions, and more effectively manage risk should any irregularities occur.
At the start of the year we started deploying conventional data loggers for which that data is retrieved on arrival of the shipment, and towards the end of 2021, we started piloting real-time data loggers which automatically transmit the data reducing the manual effort needed to retrieve and disseminate the data among stakeholders.
Data captured by these devices also play a critical role in increasing accountability among stakeholders, planning for future shipments, reducing waste; ensuring product integrity is maintained during shipping, and improving the overall efficiency of insurance claims.
We have seen a significant decrease in cold chain shipment incidents in 2021. This is strong evidence that shipments are being handled more carefully when data loggers are present.
In addition, PFSCM is also making use of Parsyl’s cargo insurance offering through the Global Health Risk Facility (GHRF), a public-private syndicate formed by an alliance of insurance and technology partners to strengthen supply chains and prepare countries for the distribution of COVID-19 vaccines and other critical diagnostics, treatments and supplies. In January 2021, PFSCM became the first GHRF policyholder.
Meanwhile, we had several other notable logistics and 4PL accomplishments.
- For Uganda we saved on freight costs by air freighting products on standard pallets, and then repalletizing it into smaller batches for easy receipt into the warehouses in-county.
- For Yemen we collaborated with the World Food Programme to deliver ocean shipments to the worn torn country.
- For Mongolia we obtained special permission to land a charter delivering a mix of temperature controlled, and ambient products; some of which were also classified as dangerous goods.
- We delivered urgent shipments to challenging countries such as Pakistan, Benin and Niger, and we worked to quickly adapt to changes to the Import Duty Exemption Certificate Application process (paper to digital) for shipments to Nigeria .
As you can see from the stories above, 2021 was truly a productive and eventful year for us.
We grew our business, expanded our horizons and innovated. We also changed and improved processes and systems to work smarter. Change and continual improvement is in our DNA, and a lot of the successes we achieved in the last year can be attributed to our ability to embrace change…
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