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Modeling the Future of Health in Tanzania

Modeling the Future of Health in Tanzania. Sako Mayrick For Director General Medical Stores Department . Contents. Introduction MSD Network and Distribution Systems MSD Supply Chain & Impetus to Change Private Sector Engagement SCM Transformation Challenges Way Forward.

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Modeling the Future of Health in Tanzania

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  1. Modeling the Future of Health in Tanzania Sako Mayrick For Director General Medical Stores Department

  2. Contents • Introduction • MSD Network and Distribution Systems • MSD Supply Chain & Impetus to Change • Private Sector Engagement • SCM Transformation • Challenges • Way Forward

  3. 1.0 Introduction • Medical Stores Department (MSD) is an autonomous institution under the Ministry of Health & Social Welfare. It was established by an Act of Parliament No. 13 of 1993, and started operations in 1994. • VisionThe MSD vision is, "To provide quality medical services (medicines and medical supplies) closer to people." • Mission statement To make available at all times essential drugs and medical supplies of acceptable quality at cost-effective prices to the population through government and approved non-government and private health facilities • Objectives • Procurement • Storage • Distribution.

  4. 2.0 Distribution Network • Central warehouse in Dar es Salaam & 9 zonal stores • MSD uses 75% of its own trucks • Under private sector participation: • 100% transportation from port to MSD • 25% distribution to zonal stores.

  5. 3.0 Impetus to Change • Challenges call for review of supply chain design • complaints from customer • increased operational costs • staff and management readiness to adopt changes • Uncoordinated implementation of recommendations. • Stakeholders’ commitment • government focusing on value-for-money and grassroots development (health is primary asset for livelihood) • development partners’ engagement (warehouse design, vehicles, and revised MTSP; and M&E) • Gradual roll-over for change; completed 40%.

  6. 3.1 MSD Supply Chain Management 5000 New direction: Direct delivery to primary health facility Distribution systems: ILS (dispensaries and health clinics) and walk-in customers (referral hospitals, regional hospitals, and faith-based organization). 5,769

  7. 3.1 Drivers for Change • Focus on customer satisfaction (vision mandate) • stock availability • direct link with customers • restructuring of operations and CSS. • Human capital requirement (competency) • Capable computer system (ERP) for real time • Supply Chain Modeling for Optimization (2020 project) • network • quantification • third party logistics providers.

  8. 4.0 Private Sector Engagement—Procurement & Storage • Procurement • 80–90% of requirements come from overseas • private sector engagement locally and overseas • total value of procurement about $U.S.130 million, per annum • local capacity limited both in number of industries (5) and production capacity (items) • investment opportunity for local industries. • Storage • total capacity 42,000 sq m of required 60,000 sq m • 50% rented from private sector.

  9. 4.1 Private Sector Engagement—Distribution • MSD has one of the most complete logistical networks in Africa. • From main warehouse in Dar es Salaam: medicines and medical supplies distributed to 500 points in-country. June 2013: 7,000 distribution points with direct delivery. • Concerns: • Coca-Cola delivered to most remote villages in-country—why not medicines and medical supplies? Who should pay delivery costs and maintain quantity and quality of supplies? • Can private sector use the Coca-Cola model to help distribute medicines and medical supplies to remote areas? What about profit motive? Standards? • Why model the private sector (third party logistics)?

  10. 5.0 Supply Chain Management Transformations

  11. 5.1 Private Sector Engagement—Current & Future • March 2011: MSD commissioned to deliver directly to health facilities • pilot in Tanga • exercise is efficient way to distribute but expensive and shifts scope of MSD activities; private sector engagement becomes necessary • nine regions under direct delivery, starting July 2012, moving to 18 regions. • Private sector engagement • consultancy on using Coca-Cola model for last mile logistics to reduce stockout and operating costs, and invest in infrastructure • now includes nine more regions • today baseline cost averages $U.S.80 per trip to health facility • use of third party being considered • risk and cost based on Supply Chain Model 2020 cost parameters.

  12. 6.0 Challenges • Making model a reality (need finance, and human and material resources) • Finding a credible, reliable third party provider • specialized vehicles for cold chain, experience with medicines • Possible collusion and diversion of drugs before building lasting business relationship • Infrastructure challenges (roads, facilities, and warehouses) • Strict non-commercial procurement laws • Logistics optimization challenges • Coordination challenges (health sector, quantification, and network (see Supply Chain Model 2020).

  13. 6.0 Challenges MSD mini-truck going to Tamota dispensary in Korogwe Delivery truck going from Lushoto to Makanya dispensary

  14. 7.0 Way Forward • Define and implement metrics for engaging private sector for direct delivery through Phase III of the Coca-Cola/Global Fund last mile interventions • eliminate stockout • improve forecasting • decrease operating costs • engage the private sector. • However, DD project depends on stakeholders investing in warehouse and vehicles (Global Fund and USAID start possible for MSD). • Modeling of Supply Chain 2020, with focus on network optimization and heath sector metrics.

  15. 7.1 Way Forward • Implement Supply Chain Model 2020 • MSD working on clear roadmap • National quantification project started with SC 2020 exercise to support accurate forecast of demand. • Phase III of last mile logistics under support development partners aims to optimize facility-to-warehouse assignment (from SCM 2020 model), saving significant distribution costs. • Phase III of last mile logistics project aims to prepare and implement framework for third party, by phases. • New strategic plan (2013) similar to 2020 framework; will support focused road map for effective, efficient supply chain systems. • Stakeholder commitment to investing in the supply chain network ensures sustainability.

  16. END Thank you for your attention

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