Background

The Mozambiquan Ministry of Health (MISAU) and its partners developed a Strategic Plan for Pharmaceutical Logistics (PELF) to address supply chain challenges. They aim to craft a cohesive national strategy for the delivery of medicines. Additionally, The Central de Medicamentos e Artigos Médicos (CMAM) is responsible for implementing PELF.

Furthermore, a TMA assessment was conducted in 2018 to identify the feasibility of outsourcing transportation per PELF recommendations.

The objective of the assessment was to explore the private sector’s willingness and ability to deliver last-mile transport services to CMAM.

ARC’s role

An informal advisory relationship with the Global Financing Facility (GFF) was established by ARC in 2017.  Consequently, The GFF engaged ARC to join PSISC partnership for project scoping, resource brokering, and expertise. As a result, ARC developed the initial statement of work for the PSISC Transportation Outsourcing Investment Planning project in 2019.

Phase 2 optimised warehouse site selection and sizing to minimise costs and improve customer service. In addition, Phase 2 was motivated by an important finding that the original plan of 27 warehouses would result in underutilisation in several locations. This would also lead to over investment. Phase 2 expanded on the analysis of indirect costs, such as management overhead, that began in Phase 1.

ARC supported CMAM in 2022 with the preparation of an infrastructure investment plan for warehousing for the next 10 years. This was then presented to the Thematic Working Group on Supply Chain and Logistics.

Moreover, a decree was issued by the Mozambican government defining the mandate of a new CMAM IP as a public institute. ARC is offering support to the development of legal documents to complete the legalisation process of the new CMAM, IP.

Outcomes and impact

To support the ministries of health, ARC focused on strengthening six supply chain elements. The work with CMAM on network optimisation strengthened five of these six areas: strategy, improvement roadmap, governance, solutions proposals, and budgets and investment cases.

Brokering expertise for strategic direction

Key elements: strategy and improvement roadmap

ARC is involved in refreshing the PELF, developing and reviewing update terms of reference, and brokering expertise to support the latest updates.

IMPACT: ARC has experience supporting the development and implementation of the existing PELF in Mozambique.

Advancing government’s oversight capabilities

Key element: governance

Work by ARC aimed to help ensure CMAM would be empowered as the manager of the end-to-end Supply chain. This includes a mandate to employ staff, plan and spend funds on warehousing and transportation of pharmaceuticals all the way to service points. This is to ensure there is no fracture in the chain of command for efficiency.

IMPACT: This work can be used by government and donors to quantify, plan and sequence investments and facilitate investment policy discussions.

Optimising the cost of network upgrades

Key elements: solutions proposals and budgets and investment cases

ARC’s optimised network could reduce annual supply chain costs by up to $6 million (30%). This is possible with a $60 million investment to overhaul and extend capacity at 35 selected sites. A simpler network, with three distinct sub-networks to cover the country’s northern, central, and southern regions. This is much cheaper than upgrading all 162 existing sites.

IMPACT: The payback period for the initial investment is 10 years. Overall costs (capital costs, plus operational costs for 10 years) may be halved.

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