Logistics and Health Supply Chain Management

Logistics and Health Supply Chain Management

• Topic: Logistics and health supply chain management
• Facilitator: Edward Bright Agyekum, PhD, Director, Procurement & Supply Chain Directorate-MOH
• Date: September 5th, 2024

Outline

• What is Supply Chain Management?
• Logistics and Health Supply Chain Management
• SCM in Ghana Public Health Sector
• Procurement Cycle

What is Supply Chain Management (SCM)?

• SCM is the process of handling the flow of goods and services from raw manufacturing to consumer consumption.
• It requires an organization to have a network of suppliers that serve as links along the chain
• Lambert, Stock, and Ellram (1998) define SCM as the "alignment of firms that bring products or services to a market."
• Chopra and Meindl (2007) believe a supply chain consists of all parties involved (directly or indirectly) in fulfilling a customer request.
• This includes all functions within an organization such as healthcare including new product development, marketing, operations, distribution, finance, and customer service.

Logistics in Healthcare

• Ensures the safe and efficient movement of medical products including sensitive items like vaccines, blood and organs, which often require specialized handling and temperature control
• Involves the storage of medical supplies and equipment in facilities that meet regulatory standards (cleanliness, temperature, and humidity)
• Focuses on maintaining optimal stock levels to avoid shortages or overstock; leading to wastage or expired products
• Ensures products reach their destinations through an efficient network, minimizing lead times and costs

Health Supply Chain Management

• Involves the sourcing and acquisition of medical products, ensuring quality standards are met and products are cost-effective.
• Requires collaboration among manufacturers, suppliers, healthcare providers, and regulatory bodies to ensure smooth product flow from production to end-use.
• Identifies and mitigates risks such as supply disruptions, regulatory changes, or natural disasters that can affect the availability of medical supplies.

Key Considerations

• Regulatory Compliance: Adherence to health regulations and standards is crucial for medical product safety and effectiveness (varies by country).
• Cold Chain Management: Maintaining products at specific temperatures throughout the supply chain is particularly important for vaccines and biologics.
• Sustainability: Healthcare organizations increasingly focus on reducing the environmental impact of their supply chains through green logistics practices.

The Cycle View of Supply Chain

• Shows the cycle of activities involved in supply chain management with stages such as customer order cycle, replenishment cycle, manufacturing cycle, and procurement cycle.
• This illustrates the interconnectedness of the various stages and parties involved (customer, retailer, distributor, manufacturer, and supplier).

Why is Supply Chain Important?

• Boosted Customer Service: Meeting customer expectations with the correct product assortment and quantity delivered on time (critical for patients’ medications).
• Reduce Operating Costs: Quickly delivering expensive products avoids costly inventory holding.

Ghana Health Sector Supply Chain System

• Initiatives since 2016 aimed at reforming the supply chain by enhancing distribution of health commodities to various tiers, primarily the Central RMSs and Teaching Hospitals and service delivery points (SDPs).
• Data generation, analysis, reporting, visibility, and use of enhanced procurement efficiencies through framework contracting are parts of these initiatives.
• Warehousing strategy development/implementation for optimal commodity management and distribution.
• Supply Chain Master Plan (2021-2025) interventions focused on achieving universal health coverage (UHC) through sustainability, transparency, innovation, coordination, collaboration, and private sector participation.
• Ghana Pharmaceutical Traceability Strategy implementation using global standards to improve health system data quality, traceability & access to safe & effective medicines.
• Logistics and distribution approach such as Last Mile Distribution (LMD) or Scheduled Distribution implemented. Implementation at Central level, 8 Regional Medical Stores, and Bono & Western RMSs, using resources (including use of aerial logistics with Zipline for hard-to-reach communities).
• Warehousing maintenance/refurbishment including use of smart temperature monitoring systems.
• Ghana Integrated Logistics Management Information System (GhiLMIS) with current data capture and processing, Order Turnaround Time reduction, Inventory Record Update & ongoing interventions to address non-optimal system use and integration with LIMS. Implementation with hospitals, regional hospitals and health centres.
• Framework Contracting Arrangement (FWC) procurement process with 3 successful rounds and an ongoing Round 4 process.

Procurement Cycle

• Includes stages like planning, sourcing, contracting, evaluation, distribution, storing, and disposal. Detailed descriptions are provided.

Challenges

• Inadequate qualified supply chain practitioners.
• Duplication and overlapping of responsibilities and roles.
• Lack of appreciation for the important role of supply chain functions (coordination & cooperation).

Conclusion: Societal Roles of SCM

• SCM improves human healthcare—humans depend on supply chains to deliver medicines and healthcare.
• SCM performance is critical during a medical emergency (life/death situation—e.g., medical rescue helicopters and delivery of essential medicines at hospitals).
• Excellent supply chain execution provides availability of essential medicines and equipment needed at hospitals, as illustrated by the example of Zipline in Ghana.

This quiz focuses on the critical aspects of logistics and health supply chain management. You will learn key definitions, the procurement cycle, and the specific context of supply chain management within Ghana's public health sector. Test your understanding of how goods and services flow from production to consumer consumption.