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The 5th Global Health Supply Chain
Summit November 14 -16, 2012Kigali,
Rwanda 
Outsourcing Warehousing and Distribution
Planning, Oversight and Capabilities Phillip
Kamutenga
DATE
SPEAKERS NAMES
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Background

• From 2009 CMS received, stored and distributed
  USG commodities
• By mid 2010, it was clear that the 3 priorities
  of visibility, accountability and performance
  were not being fully met by CMS
• USAID MALAWI requested a change of approach to
  handling USG commodities
• A parallel supply chain (PSC) was established
  late 2010
• The receipt, storage and distribution of USG
  commodities was outsourced to a 3PL - Cargo
  Management Logistics (CML)
• By September 2011, another 3PL was sub-contacted
  - RTT

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The Parallel Supply Chain
PSC CYCLE Receive/Store Plan Issue/Deliver
Reconcile

• 640 service delivery points serviced
• Malaria (USAID/GFATM), Family Planning (USAID)
• Essential Medicine Kit / Primary Health Care
  Package

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Focus

• Planning
• Smart and adequate planning required for superior
  results
• Oversight
• Outsourcing does not eliminate responsibility for
  results to clients
• Capabilities
• investment in certain minimum capabilities to
  execute (3PL) and oversee the execution
  (contractor) mandatory

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Planning
Batching POD Production
Loading Plan, Picking Loading
Distribution List (trigger)
PLANNING (Accountability)
Distribution Schedule
Repackaging
Product Receipt Physical Count
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Oversight
Loading, Vehicle Inspection Transshipment
Field Spot Checks Daily Distribution Updates
OVERSIGHT (Visibility)
Operations Meetings (x3 per week)
POD reconciliation versus Distribution List
Product Receipt Physical Counts
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Capabilities
Costing, Contracts

• John Snow, Inc.
• Staff
• Fuel
• Technical Assistance

CAPABILITIES (Performance)
SOPs, Training
KPIs
Routing Scheduling
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Results
Priority PSC Performance and source
Value of losses (Accountability) 0.73 PSC records
Turnaround between order and delivery (Performance) 25 days from order to delivery PSC SOP (target met 100 in the last 6 months)
Accuracy (Performance) 100 of PODs available PSC records
Inventory cycle count accuracy (Performance) 100 RTT records
Visibility/Transparency Field spot checks every delivery Daily delivery updates from 3PL Updates to clients every 2 days Tri-weekly operations meetings End of each day updates by Logistics Associates Stock status reports from 3PL (includes returns) 90 plus visibility of all supply chain activities on a daily basis All outputs shared with clients (MOH/NMCP/RHU). E.g., distribution updates shared every 2 days
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Lessons Conclusion

• Planning
• Without astute and adequate planning, execution
  of an outsourced solution will fail
• Oversight
• You outsource the execution, but not the
  responsibility for results
• Capabilities
• Invest in certain minimum capabilities in order
  to produce superior results
• Applies to both contractor and sub-contractor

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