Procuring Life-Saving Commodities for 60 Countries: An Update from The Partnership for Supply Chain Management

Procuring Life-Saving Commodities for 60 Countries: An Update from The Partnership for Supply Chain Management

{Photo: Gwenn Dubourthoumieu}Photo: Gwenn Dubourthoumieu

The Partnership for Supply Chain Management (PFSCM), an organization formed through a partnership between Management Sciences for Health (MSH) and John Snow Research & Training Institute, Inc., (JSI R&T), uses an innovative consortium model that draws on the capabilities and experience of 13 internationally-renowned organizations. PFSCM harnesses this expertise to strengthen, develop and manage secure, reliable, cost-effective and sustainable supply chains to meet the needs of health care and other public services. Since 2009, PFSCM has leveraged this unique expertise to manage the Pooled Procurement Mechanism (PPM), previously known as Voluntary Pooled Procurement (VPP).

Funded by The Global Fund to Fight AIDS, Tuberculosis and Malaria (The Global Fund), PPM procures and delivers about $46.6 million in life-saving health care products monthly, including HIV and malaria medicines, test kits, and related commodities. As a managing partner in PPM, MSH has played a key role in the mechanism’s overall management and strategy.

PPM works as a mechanism through which local stakeholder organizations, known as Global Fund Principal Recipients, can procure the core health products that national health systems rely on. PPM aims to ensure that the procurement of these health commodities is cost effective and efficient. PPM addresses procurement challenges by pooling procurements to obtain excellent prices and realize cost savings; ensuring the availability and prompt delivery of products; and validating the assured quality of commodities.

Better procurement process

Since its inception, PPM has procured commodities on behalf of 60 countries. In 2014 total commodity purchases reached about half of a billion dollars, with further expansion in volume expected in 2015.

PPM also implemented an innovative tool called “My Orders” that gives Principal Recipients visibility into orders placed with PPM. For each order placed, Principal Recipients can follow order status throughout the entire procurement process, from the quotation stage to delivery at final destination. PPM has also made significant progress to decrease the time between when an order is placed and when it actually arrives.

By better organizing key steps in the procurement process and working closely with suppliers, PPM has reduced the overall lead time from 8 months a year ago to 6 months today. PPM has also seen important increases in the rate of “on time in full” deliveries, from 59 percent to 83 percent.

New freight and logistics strategy

In close collaboration with The Global Fund and through proactive management of performance indicators, PPM is constantly exploring ways to bring further efficiencies into the procurement process and continuously raise the quality of services provided to countries. PPM is currently implementing a new freight and logistics strategy that will leverage a combination of different, complementary freight forwarders­ -– the actors responsible for organizing shipments and contracting carriers. Developing this interconnected network of freight forwarders will allow PPM to better service the diverse and often remote destinations where PPM clients are located.

PPM continues to develop innovations that best support cost-efficient procurement and delivery processes and stimulate close collaboration with suppliers, Principal Recipients, and The Global Fund to optimize the procurement of these critical health products.