1. CLICK TO ADD TITLE [DATE][SPEAKERS NAMES] The 5th Global Health Supply Chain Summit November 14 -16, 2012 Kigali, Rwanda Transport Capacity Building of a Local Private 3PL – Cargo Management Logistics Phillip Kamutenga Produced by: Phillip Kamutenga & Bob Steele(RTT)

2. Background Last quarter of 2010, CML subcontracted by JSI to warehouse and distribute malaria and family planning products to all health facilities in Malawi These were USG-donated and GF-procured commodities RDTs were rolled out countrywide about September 2011, increasing volumes By September 2011, stored ACT and RDT volumes increased from about one to three/four months of stock Starting January 2012, essential medicines kits were added to the stocks under management, again increasing volumes

3. Principles & Practices of Modern SCM 1.Alignment 2.Visibility 3.Agility 4.Outsourcing 5.Measurement 6.Capabilities Local 3PLs usually do not have appetite and/or knowledge to invest in capabilities necessary to adopt these principles and practices. Through painstaking collaboration, technical assistance and investment, a local 3PL can acquire and operationalize these capabilities and build a responsive and successful business with immense growth potential

4. Focus 1.Transportation & Planning 2.Warehousing 3.Standard Operating Procedures 4.Communication & Coordination 5.Key Performance Indicators & Results 6.Conclusion

5. No transport dept. 15 trucks 100cbm vehicle volume 80cbm delivered per month Incorrect vehicle size mix No vehicle maintenance plan Manual routing & scheduling Transportation & Planning Transport dept. established 30 trucks 610cbm vehicle volume 600 – 1000cbm delivered per month Vehicle mix optimized Rigorous maintenance plan Routing & Scheduling Software (US$50,000) US$60,000 invested per month, staff & leased vehicles Sep 2011 Sep 2012

6. Warehouses basic sheds, no racking All commodities block stacked No Warehouse Management System Management capacity adequate for volumes managed Warehousing Volumes increased x6 Management capacity compromised More errors in receipts reports Decision to move storage function from CML to RTT Sep 2011 Nov 2011

7. No SOPs, no reference Avoidable and expensive mistakes made Standard Operating Procedures SOPs developed All drivers & management trained in relevant SOPs Driver & distribution checklist Handling PODs Vehicle Security Obtaining Fuel Chain of Custody Sep 2011 Sep 2012

8. Ad hoc meetings with no fixed agenda No KPIs as a basis for reporting Limited interaction CML/JSI relationship confrontational at times Reporting protocols and chain of command not observed Communication & Coordination CML transport staff housed on same premise with RTT Weekly operations meetings with pre-set agenda CML/JSI/RTT have tri- weekly operations meeting A ‘communication protocol’ established Highly interactive and collaborative relationship between JSI/RTT/CML Sep 2011 Sep 2012

9. Key Performance Indicators & Results DescriptionNov 2011Sept 2012 Vehicle utilisation (use of fleet and vehicle space) Not measured, estimate to have been about 50% 80-90% On-time delivery Not measured 47% on planned day; 99% within 2 days of plan (Dec 2012 targets: 80% on planned day; 100% within 2 days of plan) Fuel consumption Not measuredAround 5.0 kms/L (target: 6) Vehicle days lost Not measured, but significant due to fuel, rain and breakdowns i.e. 20 per month Currently zero Transportation by non- CML vehicles Not measured Currently reduced to 30% (Target: < 20%)

10. Conclusion CML has moved from a warehousing company with some transportation function to become a professional transport organisation –Coping with much higher volumes of work –Utilising KPIs and SOPs –Providing better customer service at a fraction of the time and lower unit cost For private local 3PLs, there is a need for major investment, technical assistance and hand-holding if product availability at all health delivery points is to be met consistently