1. Inventory Management: Distribution, ICS, LMIS
Moscow, March 12 – 16, 2006
Dr. Dragana Veskov
HIV/AIDS Logistics Advisor

2. DELIVER’s Logistics Cycle
Tell participants that they have probably seen similar diagrams of supply chain management cyckles, but we did want to show this particular cycle, which shows DELIVER's approach to supply chain management. Point to the parts of the cycle that we will be covering today (highlighted in orange), and explain how the three topics of today: storage, LMIS, and inventory control systems, are all part of the wider framework of inventory management. Supply chain management would include everything we will discuss today - inventory management - as well as all of the other elements listed on the logistics cycle.
Tell participants that we will start by giving brief overviews of the three key areas in the session today.

4. Objectives of Storage and Distribution
Storage: Assures product and packaging quality and constant availability
Transport: Assures that products arrive in good condition, in the right place and at the right time
The less frequent your re-supply, the greater your storage requirements.

5. Distribution Considerations (Storage & Transport)
Which transportation system used?
Pick-up system (facilities collect drugs) or delivery system (warehouses deliver)
Is transportation outsourced?
Do procedures exist to:
Verify the products shipped and received: type and quantity,
Conduct visual inspection for quality assurance, including expiration dates,
Complete and sign transaction records/vouchers,
Store the products, and
Update stockkeeping records

6. Objective of Inventory Control Systems
The objective of an inventory control system is to ensure the constant availability of products, by defining:
When products should be ordered.
What quantities of products should be ordered
How to maintain adequate quantities to meet demand, while avoiding overstocks and stockouts

7. Inventory Control Systems
Maximum/minimum Inventory Control System are defined by months of stock
Systems are designed so stock quantities routinely fall between the minimum and maximum stock levels
The minimum stock level includes safety /buffer stock
Any inventory control system (max/min or other) must take into account safety/buffer stock

8. Inventory Control Considerations
Who decides what quantities to distribute?
The lower level (pull) or the upper level (push)?
Decision should be based on training and human resource implications
Which type of max/min system to use?
How long should the pipeline be?
Longer pipeline reduces likelihood of stockouts (more security stock) but increases likelihood of wastage (short shelf lives, increased expiries)

9. Logistics Management Information System (LMIS)
The LMIS:
Is a key component of any logistics system,
Impacts ordering, forecasting, procurement
Provides data to facilitate logistics decision-making

10. Objective of Logistics Management Information System (LMIS)
The objective of an LMIS is to provide the data and information needed for decision-making at all levels:
Health Center Level: e.g, quantities to order, monitor stock availability
National Level: e.g, quantities to procure, re-supply schedule

11. LMIS Considerations What data to collect?
Only collect data in LMIS that is useful for decision-making in the area of commodity management

12. LMIS Considerations
Regardless of product, always collect the three essential logistics data items:
Consumption
Stock on hand
Losses and adjustments
For other products:
ARV Drugs: number of patients by treatment regimen
HIV Tests: number of tests by purpose of use

13. Common Challenges Insufficient storage space
Inappropriate storage conditions
Different reporting systems in place at same facility (by donor, by program)
No established logistics data collection and reporting systems from SDP to central level
Poor data utilization at the central level
Drug supply is driving prescribing and dispensing
Need for drug storage at home (pediatric formulations)

14. No Product,
No Program!
Thank participants for their attention.

15.
Thank participants for their attention.