Coauthored PFSCM paper on the benefits of local sourcing and supplier development published

by | Oct 22, 2018

PFSCM is pleased to announce that our coauthored report on the positive effects of local sourcing and supplier development has been published in the esteemed open-access, peer-reviewed, online journal Global Health: Science and Practice (GHSP), which is aimed at improving health practice, especially in low- and middle-income countries.

The report, which was coauthored by Prashant Yadav, Sarah Alps, Clinton de Souza, Gordon Comstock and Iain Barton, shows that after doing business with the President’s Emergency Plan for AIDS Relief’s (PEPFAR) global procurement and distribution project for essential HIV/AIDS medicines and suppliers; suppliers achieved revenue and asset growth, improved their quality standards, acquired new contracts with other businesses, and hired more employees.

From 2006 to 2014, the Supply Chain Management System (SCMS), the global procurement and distribution project for PEPFAR, distributed over US$1.6 billion worth of antiretroviral drugs and other health commodities, with over US$263 million purchased from local vendors in 14 countries in sub-Saharan Africa.

A simple framework was developed and 39 local suppliers from 4 countries were interviewed between 2013 and 2014 to understand how SCMS local sourcing impacted supplier development.

SCMS local suppliers reported new contracts with other businesses (77%), new assets acquired (67%), increased access to capital from local lending institutions (75%), offering more products and services (92%), and ability to negotiate better prices from their principles (80%). Additionally, 70% of the businesses hired between 1 and 30 new employees after receiving their first SCMS contract and 15% hired between 30 and 100 new employees.

This study offers preliminary guidance on how bilateral and multilateral agencies could design effective local sourcing programs to create sustainable local markets for selected pharmaceutical products, laboratory, and transport services.

Meanwhile, PFSCM still pre-qualifies vendors in accordance with the World Health Organization’s (WHO’s) Model Quality Assurance System (MQAS) for Procurement Agencies.

In 2017, PFSCM audited more than 58 suppliers in eight African countries. In total, 37 (63%) of the 58 vendors passed the pre-qualification audits.

Through pre-qualifying vendors in Africa, PFSCM is:

  • Strengthening supply chains by expanding the pool of quality compliant and reputable distributors, wholesalers, and manufacturers.
  • Educating vendors about the global standards for procurement and distribution.
  • Helping vendors to identify opportunities for improvement.
  • Inspiring vendors to achieve compliance in order to expand their market share and aid in developing local economies and public health supply chains.
  • Ensuring that PFSCM and its clients have access to more vendors in Africa, minimizing the challenges of global procurement and distribution, which include production delays, shipping lead times, funds spent offshore, and carbon footprint.
  • Ensuring lifesaving commodities are readily available to some of the most vulnerable and hard-to-reach communities in Africa.

Read the full report and learn more about the common compliance challenges faced by suppliers in Africa.