In this second interview in the series on the Zambian supply chain pilot, A Humourless Lot talks with Prashant Yadav, professor of supply chain management at the MIT-Zaragoza Logistics Program.
AHL: Could you tell us a bit more about your role in the project?
PY: I had conducted research on the medicines supply chain in Zambia in 2006 funded by the UK DFID which highlighted deficiencies in the system. After conducting the study to diagnose the supply chain problems, one of my specific mandates from DFID and the World Bank was to come up with four of five options that could possibly solve the issues that were identified in the earlier reports. A second task was to give input on measurement and the metrics to measure success vs. failure: what indicators to use and how to measure them in such a way that we could draw scientifically valid conclusions. We wanted to integrate monitoring and evaluation into the project from its earliest stages. Want to know more? Click here.
The World Bank, The UK Department for International Development, and USAID recently released the results of a logistics pilot project in Zambia, in which the availability of various medical supplies was improved. This is the first of a three-part series in which I talk with two of the team members and finish with some personal reflections. In this first article in the series, I interview Monique Vledder, senior health specialist at the World Bank and supervisor of the project.
AHL: Could you tell us a bit more about the background of this project? Why was it initiated?
MV: We have been involved in supporting the government to implement malaria prevention programmes like bednet distribution in Zambia since 2005. However, over the course of our programmes we realised that, although the government was quite successful in preventing malaria, the people who still were infected could not get adequate treatment due to a lack of malaria treatment drugs at the rural health centres. Our analyses showed that those drugs were available at the central level and district level; but somehow they did not arrive at the health centres. Clearly, there was an issue with the supply lines between MSL (the central medical store), the districts, and the centres. We partnered with other major donors like the UK and US governments as well as JSI and Crown Agents as implementers, and with MIT to ensure academic support. Our joint analysis pointed towards placing commodity planners at the district level as the most promising option. When we discussed this with the Zambian government, we were given a strong commitment for for a pilot project to try this out. Click here to read on about this project
Let me start with a truism: horses for courses. When deciding to use the local supply chain or set up your own, you will need to take into account your programme needs as well as your environment; and that means that it is impossible to make any sweeping statements about which way to go is better.
Reasons to set up a parallel supply chain
Some of the reasons that INGOs give for setting up a parallel supply chain:
Specific supplies are not locally available. Some programmes are so far ahead of what happens locally, that they use supplies that cannot be gotten through the national supply chain. This happened quite a lot in the early years of the international HIV response, when it was hardly ever possible to source antiretrovirals locally. It is still a consideration in some programmes.
Local supplies are of unproven quality. An INGO that takes its duty of care towards its patients seriously, will want to ensure that medications and other medical supplies qualitatively sufficient. This is not always easy: local producers and distributors are not always open to audits by customers, especially not if they cannot be guaranteed a certain minimum amount of custom. National regulatory agencies in ‘weak’ nations often lack the means to adequately ensure quality.
Local suppliers cannot scale up sufficiently. This can be a consideration in very large programmes or responses, especially in case of outbreaks/epidemics.
Local supply chains have broken down (temporarily). This will often be the case after large disasters or areas that are prone to violent conflict.
Local supplies are (much) more expensive than imported ones. It might be surprising, but in quite a number of cases imported supplies – even factoring in transport, taxes and import duties, clearing costs, and other incidental costs – can be cheaper than locally bought ones, sometimes by a large margin. This usually happens when only a small number of suppliers have a stranglehold on the market. So why not to set up a parallel supply chain? And what is best in the end? Click to read on…
UNICEF is looking for a procurement assistant for their office in Geneva (Switzerland), a contracts officer for their office in Copenhagen (Denmark), and a supply and logistics specialist for North Korea. Sorry, no links, they still hide their vacancies behind a registration process.
Ordering systems come in two basic flavours: push and pull, plus any number of hybrid systems. All have pros and cons, and each is most appropriate for a specific situation. In this first article in a miniseries on push and pull systems, I will discuss the basics: what exactly are pull and push systems and when would you use either.
Push versus pull
In the push model, “higher”, central levels decide on supply allocation for “lower”, local levels; these decisions are typically based on supply at hand and in the pipeline, and on calculated expected consumption – the latter often approximated, based on (in the case of medical supplies) patient numbers or population data. In the pull model, “lower” levels decide on the necessary supplies for the next supply period, which are then either procured independently or obtained/ordered from the “higher” level.
The basic difference between the two models is the responsibility for timely, complete, and accurate initiation of distribution: in the push model this is the “higher” level, in the pull model the “lower” level. Click here to read more about push and pull systems
You have designed and implemented a pretty good logistics system and are proud of how effective and efficient your aupply line provides your programmes with any materials they need. Transport and administration cost are now at their minimum, fulfilment rates are close to 100%, and you process and fill almost every order within set timeframes. You feel pretty good about yourself (and not without reason), and are ready to hand over the system to your successor with justifiable pride.
And then the ministry of trade announces that as of tomorrow, clearing rules will be changed, adding three weeks to the current four to five days it takes you to clear your goods. Suddenly things look a lot less optimistic: your carefully balanced and trimmed-down supply chain is strained to the snapping point, and you are looking at having some of your key operations suspended. Even worse: one of those is a treatment programme for TB patients, and suspension of treatment might cause resistance to the drugs involved – making a bad situation suddenly look catastrophic. What went wrong? Click to read on.
Scenario 1: a house in your town catches fire, killing one person and making 5 people homeless. As the logistics officer of your town’s emergency services, you are in charge of the logistics support for the initial response as well as for the physical support of the newly homeless people.
Scenario 2: you are still that town’s logistics officer, but now a gas explosion rips through an entire block. Ten people are killed instantly, tens are seriously wounded, and scores are made homeless.
Scenario 3: you did well in the previous two cases, and have been promoted to your state emergency services’ logistics position. Three days after you start your new job, a number of bush fires break out under very hot, dry, and windy conditions, and converge on your state’s capital. More than a hundred people are killed in the next three days, several hundreds are seriously wounded (swamping the hospitals’ emergency, IC, and surgical departments), and almost a thousand people are now without homes.
Scenario 4: as emergency logistics coordinator at your country’s ministry of internal affairs, you are confronted with a devastating earthquake that destroys large parts of the capital and trashes the main harbour and the two airports. First reports indicate over a thousand casualties, untold numbers of wounded, and up to a million people who are living in the streets under improvised shelters.
The impact of these four scenarios more or less follows a logarithmic scale: each is about ten times as big as the previous one. Does that mean that the logistics for each is ten times as difficult as the scenario that precedes it? Nothing like it: organising the logistics for scenario 2 will take considerably less resources than ten times scenario 1; but scenario 4 will take considerably more than 1000 times as much to respond to at the same level – and organising its response logistics is probably several thousands of times as difficult. In fact, it becomes a practical impossibility to offer the same level of response: there is no way that we can give all those casualties dignified burials, all those wounded top-notch medical care, get everyone who is made homeless under a solid roof within the day; even if we would have the resources to do so. Why does it become so difficult? Click here to read on.
An analysis by Alanna Shaikh of how we tend to react to critics. Of course it is easy to take down an ill-conceived initiative like 1millionshirts, but it is important to reflect on whether we react much better when we are the focal point of criticism.
Wired Magazine writes about the logistics of the Haiti response as a spring board for a wider discussion of disaster response logistics. It’s a bit overly endowed with ‘human interest’, but on the whole I would say that it is a very good introduction. “Organizing Armageddon”, though? (H/T Cynan Houghton.)
Alex de Waal writes a great article on the ‘humanitarians’ tragedy’: the inescapable cruelties that come with our work. Sadly, it is hidden behind a paywall, but I recommend it highly if you do have access.
I am trying to find somebody who can tell me more about the cooperation between Handicap International and Atlas Logistique. Email to their general address goes unanswered. So if you work with/for them or know somebody who does, could you please ask that somebody in the know contacts me?
