The Partnership for Supply Chain Management (PFSCM) collaborated with a new recipient in the Ministry of Health (MoH) of the People’s Democratic Republic of Laos to reduce the tax waiver lead time for certain imported health products from as much as 84 days to just 14 days.
This significant process improvement enabled PFSCM to achieve a rapid turnaround of just a month for critical HIV diagnostics originating from Sweden and destined for Laos.
This short timeframe included all the intricate supply chain steps; order placement, pickup from the supplier, international transport, waiver processing, clearing of the goods, and cross-border trucking.
PFSCM Logistics Specialist Fudianto Wijaya, says PFSCM received an urgent request to procure and deliver temperature-controlled molecular point-of-care and viral load test kits for Laos in August this year.
He adds that PFSCM immediately knew the request would present a few hurdles impacting lead time.
“Firstly, Laos’s historical waiver lead time took about three months. Secondly, no direct flights were available for temperature-controlled products, which must be shipped by air to maintain their integrity.”
With the challenges in mind, PFSCM approached the recipient to find amenable solutions for the shipment, which needed to be delivered as promptly as possible.
“The waiver process for Laos has historically been quite lengthy, but we felt there was room for improvement if we worked closely with the recipient to ensure we identify and remove any waste from the process.”
He explains that PFSCM provided input on how the waiver process could best flow, identified bottlenecks, and ensured that the importation documents, including shipping details, air waybill, and letter of authorization, were accurate and ready on time. This enabled the recipient and logistics services provider to promptly initiate the waiver approval and customs clearance.
“These incremental improvements significantly impacted the overall waiver application process, reducing the lead time from 84 days to just two weeks.”
Wijaya notes that the waiver process improvements will benefit this one shipment and are expected to become the standard approach for future Laos shipments as well.
Further, to overcome the issue of limited flights, PFSCM collaborated with one of its long-standing third-party logistics services providers (3PLs) to transport the two pallets by air to the Suvarnabhumi International Airport in Thailand instead of Laos and subsequently truck them to the Ministry of Health’s warehouse in Laos.
“Through the recent positive interactions, our relationship with the 3PL also grew more robust and ultimately helped us to complete niche tasks, such as obtaining the warehouse confirmation letter to support the proof of delivery.”
He says this transportation plan was the quickest and most efficient in that products were delivered directly to the warehouse, freeing up the MoH’s resources to quickly distribute the products to health facilities.
He concludes that the significant lead time reduction, paired with flexible solutions from the 3PL, enabled PFSCM to deliver the products to the Ministry of Health’s warehouse in Laos in September, just one month after the order was placed.
Relevance of tax waivers in humanitarian and health logisticsA tax waiver on donated or grant-funded health products means that the government exempts these products from taxes, such as import duties, that would normally be charged at the port of entry. This waiver is applied because the products are being provided for charitable or humanitarian purposes rather than for commercial profit. Why is it applied:
How it is applied:
This system promotes the seamless delivery of critical health products to the populations that need them most.
|