Logistics Matters: Why Policymakers Care about the Supply Chain

1. Logistics Matters: Why Policymakers Care about the Supply Chain Carolyn Hart Mini-University Implementing Best Practices in Reproductive Health Cairo, February 2002

2. The Supply Chain “No customer should ever leave a clinic disappointed because the product he or she needs is out of stock.” Programs That Deliver, p. 28

3. The Purpose of the Supply Chain To serve the customer by delivering • The right goods • In the right quantities • In the right condition • Delivered to the right place • At the right time • For the right cost.

4. Contraceptive Security • When a program • Accurately estimates requirements • Has the financial resources • Has the technical skill to procure the products • Ensures reliable and timely delivery to the customer • For the medium- to long-term

5. The Supply Chain

6. The Logistics Cycle

7. Redefining Logistics • A revolution in the commercial sector • From “logistics” to “supply chain management” • Mission-critical function in any business or service delivery organization • A determinant of organizational viability • A guarantor of customer service

8. Improving customer service Saving money Increasing program impact Increasing customer loyalty Boosting profitability Increasing market share How the Supply Chain Contributes

9. Product quality Method choice Product availability Customer confidence Customer loyalty Customer retention Customer Service

10. Money • Logistics protects the investment in commodities • Logistics protects the much larger investment in other program costs • Good logistics increases revenue potential • You cannot sell what you do not have

11. Money Good logistics brings savings • Increased efficiency • Reduced waste • Improved accountability To help meet program priorities • Contraceptive security for all • Free, subsidized, and fully-paid “markets”

12. Impact Kenya STI Kits

13. Impact Logistics contributes to program impact.

14. The Supply Chain No product? … No program.

15. Industry Leaders vs.Industry Averages • Meet delivery dates 17% more frequently • Carry 60% less inventory • Spend  44% less on supply chain costs • Meet customer-request dates 95% of the time … through • Unwavering executive support • Customer-focused, integrated supply chains • Not rules, regulations, or trade policy

16. Best Practices to Improve Supply Chain Performance • Step 1: Focus on customers • Step 2: Focus on consumption data • Step 3: Focus on “supply chain integration”

17. Step 1:Focus on Customers • Not on goods • Not on budget cycle • Not on bureaucratic rules and regulations And who is the customer ?? • Ultimate: clients at the SDPs • Intermediate: next level down the supply chain

18. Step 2:Focus on Consumption Data • “Quantities dispensed to clients” • Logistics MIS isn’t easy: • Forms, manuals, job aids • Timely reporting by brand from every facility • Procedures for processing and use of data • Training and supervision at every facility in the distribution system • Automation, in large systems with many products • Logistics MIS isn’t Health MIS

19. Step 3:Focus on “Supply Chain Integration”

20. So, what does it take? • Commitment to product availability one customer at a time • Agreement to the supply chain view of contraceptive security • Commitment to integrated supply chain management • Customer focus • Strategic collaboration and information sharing • Much longer planning horizons and commitments

21. Remember ... No product? No program.