Overcoming common supply chain challenges, and sharing solutions to achieve better health outcomes during COVID-19 and beyond
Public health supply chains in developing countries are complex and vary greatly in structure.
This complexity can lead to inefficiency, diffuse accountability, and silos of information. With the COVID-19 pandemic straining already fragile systems, it is becoming increasingly evident that the public health sector needs to find ways to better leverage existing expertise, mechanisms, infrastructures and systems. It is further clear that a diverse range of qualified service providers are needed to reduce supply chain risk, especially for fragile supply chains in low- and middle income countries. In this context existing and new service providers can do more to overcome common challenges and reach shared goals.
Edward Wilson Director of the Partnership for Supply Chain Management (PFSCM) says that stakeholders in the public health space can do more to coordinate and collaborate.
“Service providers operating in the public health space often struggle with the same supply chain challenges. To work towards our common goal of improving health outcomes, we should discuss challenges more openly, and engage more proactively to educate each other and find solutions that could benefit us all,” he explains.
Recently, PFSCM has driven initiatives to improve stakeholder coordination and collaboration for more sustainable, affordable and creative solutions, which can be shared with peers to advance the collective reach and success of health programs. In Uganda, PFSCM contracted with a local third party warehouse provider to reduce pressure on the National Medical Stores (NMS).
This facility is shared by service providers moving health products into the country. When Tanzania made major changes to its importation process for health care products, PFSCM mapped the new process to identify and reduce bottlenecks caused by the new procedures. PFSCM collaborated with various stakeholders and shared best practices with peers to help them navigate through the new importation environment. As a result of the COVID-19 pandemic, PFSCM recently made use of a charter flight to move a shipment of viral load testing products to Malawi. PFSCM offered part of the charter to a peer who faced the same challenge of moving health care products into the country.
Uganda spotlight: practical solution to a shared problem
PFSCM has been serving Uganda since 2009. We manage the procurement and delivery of health care products purchased by the country through a number of grants.
Like most governments in low-income countries, especially in sub-Saharan Africa, Uganda uses a distribution model where the government procures drugs and distributes them to health clinics using a publicly run NMS, and a government-owned transport fleet. The Uganda NMS reports that its performance has improved significantly over the years increasing the availability of medicines in government health facilities from 21% in 2009/2010, to more than 85% in 2017/2018. The country is also building a new warehouse, which is four times the size of the old one, with state of the art features that will contribute to further performance improvements.
PFSCM 4PL Services Director Ishmael Muchemenyi explains that despite continued improvements on the part of the NMS; capacity constraints have still resulted in service providers being charged with high detention and demurrage (D&D) charges as health products overstay at ports along the eastern coast of Africa. The situation was at its worst in 2016, when PFSCM alone incurred D&D charges running into the hundreds of thousands of dollars.
“As supply chain management experts, we immediately investigated ways to help take some pressure off the NMS,” notes Muchemenyi.
“After discussions with in-country stakeholders and peer organizations who were affected by the same challenges, we concluded that the best practical solution would be to establish a transit warehouse in Kampala where goods exiting the ports could be stored until the NMS was ready to take receipt,” he adds.
In 2016, PFSCM floated a tender for pharma-compliant warehouse management services, and conducted independent quality assurance assessments of the short-listed respondents. This included, warehouse inspections and operational reviews of stock management systems and processes. In 2017, PFSCM partnered with local 3PL service provider Freight In Time (FIT), to manage a 750-pallet capacity transit warehouse. The warehouse is run by a registered pharmacist and is approved and licensed by Uganda’s National Drug Authority. PFSCM’s stock throughput policy, insures all commodities in temporary storage until delivered at NMS. All products coming in, and out of the warehouse are palletized; and for improved traceability, the pallets are not broken down, explains Muchemenyi. Overall, the transit warehouse has delivered exceptional value by:
- Eliminating reefer container detention charges to ensure more funds are available for purchasing lifesaving health products.
- Securing the product chain of custody through the implementation of current Good Distribution Practices (cGDP).
- Alleviating congestion at NMS, which could have resulted in operational challenges in the warehouse and delivery challenges downstream to health facilities
Further, in December 2018, a comprehensive security audit of the transit warehouse was conducted by an independent risk consultant. The auditor closely examined elements such as:
- Access/egress control
- Perimeter fencing and lighting
- Locks and key control
- Electronic security and burglar bars
- Armed guard services
- Dispatch and receiving procedures/areas
- Fire prevention
- Temperature control
- Emergency power
Muchemenyi says the auditor found these aspects of the warehouse to be in good standing, which was a vote of confidence in FIT and a major endorsement of the benefits of working with local private sector organizations in a sustainable way that helps them achieve international best practice.
“As a result of the successful security audit, we achieved a 3.2% insurance premium reduction in a very tough market in which most companies are having to pay more due to perceived risk.”
Meanwhile, the contract for the management of the Uganda transit warehouse has been extended until the end of 2020. During this period PFSCM will be responsible for value added services such as insurance and financial management, inventory and warehouse management and in-country logistics.
In conclusion, the transit warehouse not only offered a temporary solution to a supply chain problem, but also contributed to real long-term sustainability for the local 3PL. PFSCM transferred essential supply chain management knowledge, especially with regards to developing, documenting, and adhering to processes that align with cGDP. “By uplifting the public- and private sector organizations we collaborate with, we contribute to our vision and mission to transform local and regional health supply chains to promote sustainable access to quality health products.” For PFSCM, the transit warehouse, which is shared by peers and competitors alike, is a sterling example of proactive collaboration among service providers serving the same clients, countries, and health programs, and who have the same vision for positive health outcomes at heart, concludes Muchemenyi.
Tanzania spotlight: encouraging engagement when change is the only constant
PFSCM has been serving Tanzania since 2009. PFSCM manages the procurement and delivery of health care products purchased by the country through a number of grants. Tanzania is one of PFSCM’s top five countries for volume and value of procured products. PFSCM has a deep understanding of the requirements for serving this country, and service performance has always been high.
In 2019, service was abruptly disrupted when processes applicable to-, and the entities responsible for clearing and forwarding changed. The sudden changes resulted in a complex network of problems in clearing and forwarding health care goods at Tanzanian ports. Several service providers’ goods were suddenly stranded, and D&D costs quickly mounted, while health programs were placed at risk. The abrupt changes affected several of PFSCM shipments, and resulted in a decline in service performance.
PFSCM is not the only organization affected by the changes; other companies serving HIV, malaria, tuberculosis, and vaccines programs in the country are experiencing the same issues, and have all been involved in trying to find solutions, explains PFSCM Senior 4PL Services Officer, Andy Savoy-Burke.
Tools for remapping the Tanzania importation process PFSCM has encountered unusual, and abrupt process and legislation changes in the past, and had the right knowledge and tools to investigate the situation and find solutions.
“We have importation process maps in place for all the countries we serve. Some years ago, we experienced the same kind of challenges in Nigeria and Sierra Leone, and developed a template for plotting importation processes. The foundation of this template remains relevant today, and we leveraged lessons learned to build a strategy for remapping the Tanzania importation process,” explains Savoy-Burke.
PFSCM engaged with involved parties such as 3PLs, clearing agents, the ports authority and government entities involved in the process to understand their current capabilities, processes, staff complement, challenges and backlogs. PFSCM then collected and deciphered the feedback to determine how responsibilities have shifted, where gaps in accountability are, and which processes are overlapping or missing.
“We then used the vetted information to create a new importation process map. The current map has more than 15 steps, and more than seven various kinds of entities involved,” adds Savoy-Burke.
Further, PFSCM’s process mapping revealed that several changes were made to the standard importation process.
Below are some examples of processes that have been amended:
- Preparation and follow up of duty waiver exemptions documentation.
- Submission of mandatory documents for customs clearance.
- Lodging customs entries or declarations to proceed with importation processes.
- Applying for wharfage charges.
- Physical verification of containers.
- Securing release orders from Tanzania customs.
- Getting port charges from the ports.
- Securing loading permits.
Going beyond operational duties to improve the supply chain With accurate information in hand, PFSCM was able to report the facts to its stakeholders, and those involved in the importation process.
“PFSCM not only investigated and mapped the process for our own benefit, but also shared our findings with clients, peers and stakeholders, and advocated widely for the implementation of standardized processes that will benefit all,” explains Savoy-Burke.
PFSCM provided practical advice that is in line with best supply chain practices, to help the involved parties establish, document and implement the new processes to improve efficiency. Savoy-Burke, notes that PFSCM’s operational work organically turned into technical assistance as its private sector 3PL partners, and their in-country agents, assisted in equipping the government agency with tools and practical examples to execute complicated processes.
“Our 3PL partners, along with their clearing agents, demonstrated their immense experience and expertise by helping the newly appointed government agency to understand and organize their processes to better align with that of the parties involved in clearing and forwarding,” adds Savoy-Burke.
After remapping the importation process, PFSCM has been able to recover its service delivery performance.
“There is still a ways to go before reaching the pre-change performance levels, but at least progress is being made,” says Savoy-Burke.
Meanwhile, PFSCM’s importation process mapping capabilities have proven to be a valuable tool for other stakeholders as they plan their importation activities into Africa. The initiative has caught the attention of other trade experts, who are also advocating for inter-agency discussions, and a waiver and importation information clearinghouse for the sector.
In conclusion, Savoy-Burke reiterates the need for increased in-country stakeholder engagement. He emphasizes that those involved in clearing and forwarding need to understand the end-to-end process to ensure full endorsement, agreement and the successful transfer of ownership between processes.
“PFSCM is committed to strengthening supply chains through knowledge transfer, upliftment, education, and the implementation of best practices whether for supply chain, procurement or distribution.
“Working towards the common goal of better health outcomes for all, has always been a motivating force for PFSCM, and in the ever-changing public health space, it is crucial that stakeholders come together to solve shared problems for the greater good,” stresses Savoy-Burke.
Malawi spotlight: moving quickly, leaving no one behind
PFSCM has been serving Malawi through since 2009. PFSCM manages the procurement and delivery of health care products purchased by the country through a number of grants.
PFSCM Logistics Manager Moeen Tahir says between March and May this year, when COVID-19 lockdown measures abruptly disrupted health logistics, PFSCM collaborated with another international procurement services agent (PSA) to deliver an urgent and complex shipment of frozen, cold chain, and ambient products to the country.
Navigating airlines in crisis times At the end of March, PFSCM received a large, and urgent order for reagents used in laboratory diagnostics and HIV viral load testing. These products are shipped frozen, using dry-ice, and are classified as hazardous-, or dangerous goods. Owing to the nature and size of the shipment, only specialized air freight service providers are equipped to move the cargo, and with COVID-19 putting strain on airlines, it was particularly challenging to find a suitable carrier offering reasonable rates, explains Tahir. Despite the limited scheduled flights, PFSCM was able to secure a charter flight with one of its many specialist 3PLs.
Tahir adds that securing flights under emergency conditions is no easy feat, but by leveraging its deep industry experience, and following best practices, PFSCM was able to determine an acceptable cost baseline, tender for charter flights, prepay the charter operator, and secure a fixed fee.
“In a time when demand greatly exceeds supply, we remain committed to delivering excellent service, at the optimal cost position. We apply our extensive freight forwarding knowledge to identify and partner with the best, and most affordable service providers who understand the significance of moving humanitarian aid,” explains Tahir.
Unique flight with a delicate mix of lifesaving products PFSCM booked about 75 tons of cargo on the charter and was able to offer the remaining cargo space to a peer who had the same pressing need to move lifesaving health care products to Lilongwe. Tahir notes that open coordination resulted in arrangements for the co-loading to be completed in a matter of hours before the charter flight was due to leave for Malawi.
“When we started working together, the arrangements for PFSCM’s part of the cargo were already at an advanced stage. As a result, the additional cargo was picked up late, but with all hands on deck, we made it just in time. More frequent collaboration will help to improve communication and streamline processes for such situations, but we now have a foot in the door for future collaboration,” he adds.
Once all the products from both PSAs were loaded, the shipment comprised a mix of fragile frozen reagents at a temperature of -20℃, cold chain products kept at between 2℃ to 8℃, and ambient consumable products stored at between 2℃ and 28℃.
Meanwhile, the shared charter marks a significant milestone in cross-PSA collaboration.
“Sharing resources among PSAs and other service providers is not a common practice. After many years of service in this field, this is the first time we have been able to successfully co-load a charter. The charter ensured both parties could deliver on service commitments, and above all, it reduced costs and carbon emissions. The benefits are compelling.”
Sharing resources for a sustainable future Going forward, donors, service providers, and suppliers will have to closely align, share, and coordinate initiatives to ensure service- and cost continuity of lifesaving supply chains, says Tahir. “We are convinced that it is not only COVID-19 that will force organizations to be increasingly open and approachable to sharing resources, and expertise, but also the ever present need to do more with less; especially in the public health supply sector,” he concludes.
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