INTRODUCTION TO LOGISTICS MANAGEMENT: COMMODITY FORECASTING AND SUPPLY CHAIN MANAGEMENT A presentation to RHU field staff By Albert Kalangwa (MCIPS, MBA, Pharmacist) June 3, 2014

Objective At the end of this session participants should be able to:  Appreciate the business value of commodity forecasting & SCM  To reduce stock outs and wastages of Health supplies through application of appropriate logistics management practices  To collect and use stock data in making decisions especially in stock replenishment.

What happens when medicines logistics is not well managed? 3

Logistics Management Information System The Logistics Management Cycle Procurement Receipt and Inspection Storage / Inventory Control Requisition of Supplies Delivery Dispensing to Clients Consumption Reporting

The Ideal Inventory Control Model and Reorder Frequency Safety Stock SS=Min Average Inventory Working Stock Lead Time Lead Time Order Placed Medicines Received Order Placed Medicines Received Safety Stock Time in Months Stock on Hand Q 0 SS+Q 0 Q 0

Calculate Requirements Correctly  Average monthly consumption  Stock on order  Procurement Interval  Safety stock  Minimum stock level  Maximum stock level  Quantity to order  Expiry date(s) of stock at hand

Definition of LMIS A framework for collection and analysis of logistical data to produce information for communication and decision making. 7

LMIS – data collection points In-Patient Out Patient ReceivingStoring Issuing

Essential logistics data (1/2) Available quantity: The quantity of stock available and usable at all levels of the system at a given time Consumption: The average quantity of stock consumed/issued to users (clients) for a specified period. 9

Essential logistics data (2/2) Adjustments and losses (positives & negatives)  The quantity of stock put into or out of the distribution network for reasons other than routine receipt & consumption by clients  obsolete stock,  losses/missing stock  products received or transferred to another Centre  counting error correction 10

LMIS data - Types of source documents (1/3)  In logistics, there are only THREE things that can happen to products in distribution chain: Received and stored in the store Issued / taken out of the store Used by the final consumer 11

LMIS data - Types of source documents (2/3) Figure 1: Illustration of three types of documents

LMIS data - Types of source documents (3/3) To have the possibility of monitoring products at any time in the distribution network, there is need for three main types of documents: 1) Stock management documents : It includes information regarding product in stock, eg Stock Card 2) Documents relating to stock movements: It includes the information concerning issued products eg. Requisition and issue Voucher. 3) Documents related to consumption: It includes information regarding products consumed/used, Eg. Daily dispensing log

Documents related to Stock management Stock Card Data on hand, adjustments and losses, the quantity received, the amount issued, transaction dates, providers, recipients, etc. Proposed stock card for RHU clinics.doc Do you maintain stock cards? Electronic or manual?

Documents related to stock movement  Invoice & delivery notes  Requisition and Issue Vouchers: data on products name, the quantity requested, the quantity issued, the date of delivery, etc.  Which documents are you using?

Documents related to stock consumption Daily register of activities / Dispensing Log : Data on the dates & quantity of products issued to the clients Proposed Dispensing log for RHU clinics.doc Which documents are you using?

Root Cause Analysis – Stock outs and wastages / expiries at RHU  Why do we experience stock outs?  Why do we experience wastages / expiries?

THANK YOU