National healthcare supply chains are complex webs of interaction between national and provincial structures. Often, disconnects exist between the various departments or levels of government responsible for different functions such as medicine procurement, demand planning, supply planning, order placement and distribution. The onset of the COVID-19 pandemic created further complexity with massive demand spikes for certain medicines and suppliers battling with the impact of COVID-19 on their production and logistics.
In South Africa, the supply of medicines is centrally contracted by the National Department of Health (NDoH), through its Affordable Medicines Directorate (AMD), with input from the provinces during the tender process. This means that contracts with pharmaceutical suppliers happen at a national level and provincial governments purchase medicines against these national contracts. Misalignment on demand forecasts could result in stock-outs of medicines and healthcare supplies, negatively impacting patients’ access to medicines, or lead to overstocking. By improving visibility throughout the supply chain from national to provincial levels, the efficacy of the entire system can be advanced with better forecasting.
The NDoH recognised the need to build a stronger supply system. The Africa Resource Centre (ARC) was part of the team that developed the draft Strategy for Improved Medicine Availability. After the continuous national stock-outs in 2014, ARC partnered with AMD to develop an operating model that would improve predicting, avoiding, and responding to stock shortages timeously. This led to developing a future-state operating model called the Visibility and Analytics Network (VAN). A holistic plan was needed to align various donor-funded projects and increase the return on investment for those funders supporting the large-scale transformation of the health supply chain.
In 2018, AMD asked ARC to drive the supply chain planning for an antiretroviral regimen transition to Tenofovir/Lamivudine/Dolutegravir (TLD).
At the beginning of the pandemic, AMD engaged ARC to develop the supply planning approach for COVID-19 related medicines and health supplies. ARC worked with AMD and its largest implementing partner to develop a new approach to supply planning. This also leveraged ARC’s experience from the TLD transition planning. In the weekly COVID-19 response meetings, both internal to AMD and externally with provinces, ARC led the supply planning segment.
Building on its expertise in supply chain, ARC developed a tool that would give insight into whether provinces had the correct quantity of medicines to meet the COVID-19 medicines demand forecast, and contained multiple flags that triggered different management actions. The tool has the following functionality:
- Weeks of cover per product at a national level and per province
- Product shortfall or surplus over specified time periods based on:
- Stock on hand
- COVID-19 demand forecast
- Supplier production pipelines
- Produces recommended orders to provinces
This planning tool pulls in data from the COVID-19 demand forecast, stock at facilities, and pharmaceutical suppliers’ pipelines to improve visibility of available medicines, predict future requirements, and assist with supply planning over three to six months. The tool also allows the NDoH to track where medicines are and which provinces have surplus or stock that will run out or potentially expire. In this way, the NDoH can find an alternate supplier/s or explore whether different package sizes or therapeutic alternatives could meet the needs.
OUTCOMES AND IMPACT
ARC’s support to ministries of health focuses on strengthening six supply chain elements. The work on supply chain visibility with the NDoH strengthened three of these six areas: strategy, improvement roadmap, and solutions proposals.
IMPROVING THE ABILITY TO PREDICT, AVOID AND RESPOND TO STOCK SHORTAGES
Key element: improvement roadmap
The tool was initially set up in April 2020 to track 70 priority medicines to treat COVID-19 symptoms at a national level. By September 2020, the tool was being used to track over 500 essential products across more than 4 000 facilities with forecasting analysis for up to 12 months ahead. When ARC started working with the NDoH, many products were at risk of potential shortages, but as of March 2021, fewer than 10 products were at risk.
IMPACT: The NDoH was able to respond to COVID-19 and ensure that essential medicines were available when and where they were needed in the correct quantities, thereby minimising any stock-outs.
DEVELOPING A CONSOLIDATED SUPPLY PLANNING TOOL
Key element: strategy
ARC’s has supported the development of an online tool to improve supply planning for any ministry/ department of Health. It is based on the Excel tool developed by ARC but offers additional functionality and automation as it is cloud-based for multiple parties to access the information. This tool is completed and is ready to be used for centralised planning capability workshops and workshops in the countries where ARC works.
IMPACT: More automated, data-driven supply planning decisions that result in better communication with suppliers, increased medicine availability and improved working capital across the supply chain.
COORDINATING STAKEHOLDERS AND SUPPLIERS
KEY ELEMENT: SOLUTIONS PROPOSALS
Building on the credibility from previous work on the VAN, ARC was in a position as a trusted independent advisor to successfully coordinate various stakeholders to ensure the tool’s adoption for all medicines. The Excel-based tool is now being handed over to AMD for its staff to use going forward.
IMPACT: Coordination of stakeholders resulted in the tool being adopted for all medicines.