An effective supply chain model established by Imperial Health Sciences to get essential medicines to the people of Malawi has successfully achieved its goal, and in addition, resulted in the growth and development of a local logistics service provider.
The problem
Imperial Health Sciences managing director Dr Iain Barton highlights the reasons for the development of a new healthcare supply chain in Malawi: “In most countries in sub-Saharan Africa, essential medicines and vaccines are procured and distributed by the Ministry of Health or a parastatal agency closely linked to the Ministry. The typical model is that the manufacturers ship the medicines to the Central Medical Stores, which, using a government owned fleet, distributes in bulk to district or regional warehouses. These in turn distribute supplies to hospitals, clinics and primary healthcare centres.” Barton notes that the problem with this model, however, is that the drug distribution needs within a country usually overwhelm the government-run drug distribution and logistics system, leading to very poor performance and significant stockouts of essential medicines and other health products.
“Outsourcing transport and warehousing is one way in which to augment the performance of existing logistics systems,” he notes, but adds that this is not a solution in much of sub-Saharan Africa, where excessive fragmentation of logistics needs across countries, programmes and sectors has led to a poorly developed third party logistics (3PL) network. “Government stakeholders or international donor agencies do not have confidence in the performance potential of private third party providers with good reason. Apart from some large 3PL companies in South Africa, transport and warehousing service providers in sub-Saharan Africa do not have the business systems, capital or quality compliance to be able to meet the performance requirements of Ministries of Health and international donor agencies such as the US Government. The end result is that governments and policy makers do not use outsourced systems and the inefficient model prevails.”
The solution
Barton stresses that there is an immediate need for a structured and sustainable approach to providing high quality transport, warehousing and other supply chain services for Ministries of Health in developing countries, including those in sub-Saharan Africa. “In the absence of this, large investments in health will not translate into improved health outcomes in these regions,” he says.
Imperial Health Sciences took up the challenge to develop a model that meets this need, and it has been successfully implemented in Malawi, to address a healthcare crisis situation in the country. Barton elaborates: “In Malawi, the government run distribution system was in a state of disarray. Imperial Health Sciences, working closely with the US Government through its “USAID-DeliverProject” developed a local solution that has proved to be highly successful as it ensures the efficient delivery of medicines and other commodities to Malawi’s more than 640 healthcare facilities each month.”
Outlining Imperial Health Sciences’ solution, Barton explains that the company has joined forces with Cargo Management Solutions, a small local cargo and express courier company in Malawi.“Through knowledge and skills transfer from Imperial, Cargo Management Solutions is now capable of providing transport and distribution services in Malawi for US Government funded health products and other primary healthcare products.”
The outcome
As a result of this Imperial intervention, nearly 100% of US Government funded healthcare commodities are now delivered within the scheduled 10 to 15 day window, while more than 99% of proof of delivery slips are reconcilable and stock-out rates of tracer commodities have been reduced by 60 to 70%.
Cargo Management Solutions has also transitioned from a small warehousing company with some transportation function into a professional third party logistics provider. Imperial helped the company to develop standard operating procedures and key performance indicators for all aspects of its business and to implement transport and route planning. Cargo Management Solutions now also boasts improved internal communication and coordination, warehouse management, technology tools and systems integration, as a result of Imperial’s input. “It has the ability to cope with higher volumes of work and it can provide better customer service at a lower cost,” Barton states. “This supply chain model has proved its value in Malawi