Introduction to Health Supply Chain Management PDF

# Introduction to Health Supply Chain Management ## NurP 4406 ## What is Supply Chain Management? - Supply chain management (SCM) is the centralized management of the flow of goods and services and includes all processes that transform raw materials into final products. By managing the supply cha...

# Introduction to Health Supply Chain Management ## NurP 4406 ## What is Supply Chain Management? - Supply chain management (SCM) is the centralized management of the flow of goods and services and includes all processes that transform raw materials into final products. By managing the supply chain, companies can cut excess costs and deliver products to the consumer faster and more efficiently. - As supply chain management controls the development of raw materials into finished goods that move from the supplier to producer to warehouse to retailers and/or consumers, logistics focuses on the efficient and cost-effective delivery of goods to the customer. Logistics thus forms part of supply chain management. ## SCM Illustrated **What is Supply Chain Management?** The image depicts a flow chart that illustrates a supply chain, outlining the information flow, primary and reverse product flows, and primary cash flow. The chart has the following actors: - Supplier - Producer - Customer ## Commodity Security - Commodity security exists when every person is able to obtain and use quality essential supplies whenever they need them. - Reproductive commodity security however exists when every person is able to choose, obtain, and use quality contraceptives and other essential reproductive health supplies whenever they need them. ## Methodology ### Strategic Pathway to Reproductive Health Commodity Security (SPARHCS) framework The image shows a circular diagram with the following components: - **Context:** including Government, Private Sector and Donors - **Commitment:** including Public Sector and NGOs - **Capacity:** including Social Marketing - **Capital:** including Commercial. The central portion of the image shows the Client Demand and Utilization process. The framework lists various objectives and steps for the supply chain, including: - Policy - Forecasting - Procurement - Distribution - Delivery - Monitoring and Evaluation - ETC. ## The 7Cs of Commodity security framework - **Context:** Refers to the overall situation that exists in the country where commodity security is going to be achieved, including the political, policy, economic, social, and health environments. - **Commitment:** Refers to the level of policy support and leadership, and includes commitment by all partners: government, donors, private sector, and NGO sector. - **Capital (Financial Resources):** Not only must there be a variety of funding sources (the government cannot meet all of the needs alone), but the funds must also be made available to support all of the requirements needed to achieve Commodity Security, including the purchase of the products and the infrastructure needed to manage them. - **Coordination:** The various partners who are working together to achieve Commodity Security, and as indicated in the boxes, this includes the public sector (government), as well as the private sector and donors. - **Capacity:** Capacity helps to implement the system; this includes the supply chain that will get the products where they are needed, service delivery that will give clients access to the services, and the human and technical capability that will support all elements of the system. External capacities need to be taken into account as internal capacities alone are mostly not adequate to help with implementation. The LMICs mostly have internal issues or challenges and do solicit for donors or external support to ensure commodity security. - **Commercial Sector, Private Sector, NGOs, and Social Marketing:** They are actors who mobilize their capital, coordination, and capacity in order to bring services to the clients. - **Clients:** We must ensure that we are meeting the needs of the clients and addressing specific issues that impact CS at the client level, such as access, communities, method choice, met, and unmet need, ability and willingness to pay, and sources used. ## The Essence of Logistics to Commodity Security - FFPD - **Forecast:** Accurate estimate of commodity requirements. Predictable arrangement for supply to meet up with unpredictable demand of health commodities for use. - **Finance:** Obtain or organize adequate financial resources. - **Procure:** Conduct timely and efficient procurement of products. - **Deliver:** Ensure reliable delivery to customers. ## The 7Rs of Logistics - Right Product - Right Quantity - Right Condition - Right Place - Right Time - Right Customer - Right Price ## Logistics Cycle Explained The image depicts a circular diagram outlining the logistics cycle with the following components: - **Serving Customers:** This is a very important element in the scale of preference as all work in logistics is to serve customers, the end users of the products. - **Product Selection:** Since the customers need to be given the best, there is the need to select appropriate products given the program supported and the disease patterns of the country in order to balance those needs with cost and product management. - **Quantification & Procurement:** This is all about determining the right quantities that will be needed to serve all of our customers and obtaining those products from the manufacturer or the re-seller, that is the procure products.. - **Inventory Management:** This stores and distributes the products throughout the system, and with this, storage must be adequate to maintain the quality of our products and storage capacity must be adequate to manage all of the products in our system. Again, transportation must also be secure and reliable, and it must be available on a regular basis. - **LMIS:** - Pipeline Monitoring - Organization & Staffing - Budgeting - Supervision - Evaluation - **Quality Monitoring** (at each stage of the cycle) - **Product Selection** ## LMIS at the Heart of the Cycle - In the heart of the cycle, we have: - **Organization and Staffing:** has to do with an organization having well-trained, efficient staff who monitor stock levels, place orders and provide products to clients. - **Budget:** has to do with the allocation, management of finances, mobilization of resources, and the security of a budget line item for health commodities and logistics activities. - **Supervision:** a necessary tool to anticipate needed changes or respond to supply problems or human resource constraints. - **Monitoring and Evaluation:** Routine monitoring and periodic evaluation of the pipeline and logistics system activities help demonstrate how well the system is performing, the areas that can be improved, as well as the system's impact on service provision. - **Quality Monitoring:** All actions taking place within our cycle must be monitored to ensure that they are functioning properly. If not, then corrective measures must be taken. - **Policy Environment:** An Organization or Government's regulations and procedures affect all elements of the logistics. - **Adaptability:** Adaptability refers to the ability of the logistics system to successfully adapt to changes. Logistics systems must be designed to be flexible and adapt to constantly changing circumstances, such as changes in demand for a product or changes in funding policies for logistics activities. ## Why Does Logistics Matter? Logistics improves cost efficiency and effectiveness by: - Reducing losses due to overstock, waste, expiry, damage, pilferage, and inefficiency - Protecting other major program investments - Maximizing the potential for cost recovery ## 6 Terms In Logistics - **Pipeline:** It is the entire chain of storage facilities and transportation links through which supplies move from the manufacturer to the consumer, including the port facilities, central warehouse, regional warehouses, district warehouses, all service delivery points, and transport vehicles. - **Lead Time:** The Chartered Institute of Procurement and Supply (CIPS) defines Lead - Time as the interval between the initiation and completion of a process. For example, the lead - time between the placement of an order and its delivery from the supplier is the most common lead time used in procurement. In our setting however, lead time is the interval between when new stock is ordered and when it is received and available for use. A logistics manager therefore measures lead time and works to reduce it. ## Lead Time Examples - A district places an order, sending the form to the regional warehouse, which takes 5 days. It takes two weeks for the region officer to approve the order and send it to the region warehouse. It then takes the warehouse staff two weeks to pick and pack the order and to get approval to ship the products. It takes 5 days for the delivery vehicle to arrive at the district, another 10 days for the district warehouse staff to count the supplies and place them on the racks to make them ready to issue. - What would be the lead – time? - As a manager, what options would you employ in reducing the lead time? ## Cont... Terms in Logistics - **Dispensed-to-User Data:** Information about the quantity of goods actually put in the hands of the clients. - **Issues Data:** Information about the quantity of goods shipped from one level of the system to another. - **Pull/Requisition System:** Quantities to be issued are determined by personnel who receive the supplies. - **Push/Allocation System:** Quantities to be issued are determined by personnel who issue the supplies. ## Advantages and Disadvantages of Push/Allocation and Pull/Requisition System - **Push system:** requires fewer trained staff but it then increases the workload of staff at the upper level. - **Pull systems:** on the other hand, are decentralized and place less burden on upper-level staff, but it then requires trained staff at the lower levels to spend more time doing commodity management and filling out forms than and then having less time to serve clients. This system also requires more people to be trained, which takes time and money.. - Both require the same data elements. The only difference is who does the calculation: staff at the lower level (requisition) or staff at the higher level (allocation). One system is not better than the other; what system to use is dependent on the staff and resources available to the logistics system. ## Ghana Health Commodity Pipeline The image shows a diagram of the Ghana Health Commodity Pipeline, which has the following stages: - **Manufacturer** - **Port** - **CMS** - **RMS** - **Private Sector Suppliers** The pipeline has multiple actors, including: - **Donors** - **Private Services Providers** - **Teaching Hospitals** - **Clients** - **DMS/DHMT** - **SDP** - **CBD** The key elements are: - **RMS:** Deliver commodities, collect/distribute data - **Facilities:** Requisition of commodities, provision of data to RMS - **CBD:** Community-based Delivery System - **MS:** Medical Stores ## Discuss the Roles of the Nurse in Supply Chain Management. ## Group Assignment ## The End ## Thank You