Jan Komrska & Alison Fleet Home fortification, using Multiple Micronutrient Powders Products, Procurement and Supply Jan Komrska & Alison Fleet UNICEF Supply Division Medicines and Nutrition Center, Nutrition Unit

Outline Key product characteristics How MNP products could be purchased/ordered? Product Price Manufacturing Process

Objective of the Supply To deliver right quantities of right product, to the right locations and at the right time. To minimize costs and to satisfy quality requirements. We want to avoid Disruption in supply of product to the beneficiaries Inferior quality of the product (no effect, adverse effect) Layouts in non-understandable language Waste of resources (Doubts about procurement process transparency)

Supply Process Plan Procure Produce Deliver Expression of need for a product Product arrives to the port of entry

Definition of requirements Plan Definition of requirements What? How many? Where? When? How much? Specification Quantity Delivery address Delivery date Available budget

Vitamin and Mineral Powder Plan Product Vitamin and Mineral Powder (MNP)

Specifications (HF TAG) Plan Specifications (HF TAG) Name of the product VITAMIN and MINERAL POWDER Composition 15 components Label language English x local language Instructions for use Text x Pictograms

Plan Standard Product(1)

Plan Standard Product(2)

Standard Product(3) Plan Available through UNICEF Supply Division Suitable for pilot projects or small orders

Plan Customised Products Yemen Haiti Nepal Rwanda Kyrgyzstan

Product characteristics Plan Product characteristics Product shelf life – 2 years Under storage conditions indicated by the manufacturer The surface area of MNPs powder compared to tablets is much larger - degradation

Quantification of needs Plan Quantification of needs Good forecast and higher volumes result in: Cost saving (obtaining better price from the supplier) Better lead time Less stock in warehouse Uninterrupted supply

Timelines Plan Standard product Customised product TOTAL 10 – 12 weeks Confirmation of Layouts 3 – 4 weeks Warehouse Processing 4 weeks Production 8 – 12 weeks Shipment by Sea 4 – 6 weeks Clearance at the port 2 weeks TOTAL 10 – 12 weeks 17 – 24 weeks

Plan Lessons Learnt Product specification - refer to HF TAG Programmatic Note Customisation of the product layouts possible but allow enough time Product shelf life is short – plan for continuous orders to avoid long storage time Storage conditions need to be adhered to keep the product fresh Forecasting product quantities is very important

Regulatory environment(1) Procure Regulatory environment(1) Principles of public procurement: Fairness Transparency Equal treatment Registration of the product: Law on medicinal product for human use Import/VAT regulations

Regulatory environment(2) Procure Regulatory environment(2) Why MNP should not be registered as medicine? Product does not claim to treat a specific disease Product is not usually manufactured by pharmaceutical companies Premix components comply with the Food Chemical Code (FCC) not Pharmacopoeias Product is not distributed exclusively through pharmacies MNP should be registered as food supplement however country specific constrains may require other registration avenues

Supplies of MNP Procure 2011: 4 million monthly doses purchased

MNP Prices Procure 0.025 USD/sachet ~ 0.75 USD/PAC-30 Additional costs: Shipping cost Clearance Customs duties Programming costs

Procure HF Products Prices

How could home-fortification products be ordered/ procured? Through Agencies (UNICEF country programme / WFP / NGOs) Through Procurement Agents (UNICEF Procurement Services or GAIN Premix Facility) Direct procurement by the governments from manufactures or appointed traders

Procurement through UN Agencies UNICEF country programme / WFP / NGOs Advantage: Funding is secured outside government (initial phases) Good product quality and good price Disadvantage: Product is imported, cleared under Agencies' name Capacity of the government is not built Capacity of the local industry is not built Suitable for initial stages of programs/pilots and in emergency response phase

Through Procurement Agents Through UNICEF Procurement services (PS) or GAIN Premix Facility (GPF) Advantage: Government is securing funds (through own resources or donors) Good product quality and good price GAIN provides credit arrangement Product is imported, cleared under Governments' name Disadvantage: Advance payment is required by UNICEF Capacity of the government is not built Capacity of the local industry is not built Often conditioned by Donors Suitable for nationwide distribution

Government direct procurement From the manufacturer or appointed traders Advantage: Government is securing funds Ownership Capacity building for local industry Disadvantage: Prone to irregularities during the procurement process Technical capacity to evaluate product quality might be a challenge Product quality may become less important in selection process Challenge when no local suppliers/agents available Suitable for nationwide distribution

Lessons Learnt Procure International purchase: Results in better price compared to local purchase Quality of product is easier to assure Conducting open international bidding might be difficult to implement for national authorities Challenges in technical evaluation: Limited data on product provided by supplier Stability study to confirm product shelf life is not available

Manufacturing process(1) Produce Manufacturing process(1) Requirements for food manufacturers: Licence for food manufacturing Hazard Analysis and Critical Control Points (HACCP) Recommended International Code of Practice - General Principles of Food Hygiene of Codex Alimentarius ISO 22000:2005 (Food Safety Management System)

Manufacturing process(2) Produce Manufacturing process(2) Requirements for the product: Safety, Efficacy, Quality Stability Data Certificates of Analysis (CoA) Premix Finished product   Raw materials CoA  CoA CoA

Manufacturing process(3) Produce Manufacturing process(3) Blending Packaging Premix Finished product Raw materials

Manufacturing process(4) Produce Manufacturing process(4) “Local” production of MNP requires Investment in 1 gram sachet filling machine Compliance to strict hygiene and quality rules Import of pre-mix and foil It is not cheaper compared to international procurement

Produce Packaging of sachets

Produce Finished product

UNICEF Approved Suppliers Produce UNICEF Approved Suppliers DSM France/Bulgaria DSM South Africa DSM/Fortitech Malaysia Renata, Bangladesh Piramal Healthcare, India Potential suppliers: Stern Vitamins, Germany Glanbia, Germany Consult HF TAG website

Lessons learnt Produce Limiting points in manufacturing process Capacity of the blender Capacity of the packaging machine Customized foil production time Manufacturers understanding of quality requirements varies Finished product analysis are not carried out systematically

About 100,000 packs in one 20’’ container Deliver Product Receipt About 100,000 packs in one 20’’ container

Deliver Product Storage Product must be stored as per product label (dry, clean storage below 25 C) Good distribution practice (batch management and tractability Product expiry date

Deliver Complaints Color Odor Layouts Not possible to open sachets

Deliver Lessons learnt Respect supplier’s instruction on how to store HF products (even though these products are not classified as pharmaceuticals) Allow sufficient time for stock replenishment/reordering to avoid stock outs Provide feedback to purchaser/person who drafted specification to implement improvements

Plan Procure Produce Deliver Thank you !