INTRODUCTION TO LOGISTICS MANAGEMENT: COMMODITY FORECASTING AND SUPPLY CHAIN MANAGEMENT

A presentation to RHU field staffBy Albert Kalangwa (MCIPS, MBA,

Pharmacist)

June 3, 2014

Objective

At the end of this session participants should be able to:

Appreciate the business value of commodity forecasting & SCM

To reduce stock outs and wastages of Health supplies through application of appropriate logistics management practices

To collect and use stock data in making decisions especially in stock replenishment.

What happens when medicines logistics is not well managed?3

Logistics Management Information

System

The Logistics Management Cycle

The Ideal Inventory Control Model and Reorder Frequency

Safety

StockSS=Min

Average

Inventory

Working Stock

LeadTime

LeadTime

OrderPlaced

MedicinesReceived

OrderPlaced

MedicinesReceived

Safety Stock

Time in Months

Sto

ck o

n H

an

d

Q 0

SS+Q 0Q 0

Calculate Requirements Correctly Average monthly

consumption

Stock on order

Procurement Interval

Safety stock

Minimum stock level

Maximum stock level

Quantity to order

Expiry date(s) of stock at hand

Definition of LMIS

• A framework for collection and analysis of logistical data to produce information for communication and decision making.

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LMIS – data collection points

In-Patient

Out Patient

Receiving

Storing

Issuing

Essential logistics data (1/2)

Available quantity: •The quantity of stock available and usable at all levels of the system at a given time

Consumption: •The average quantity of stock consumed/issued to users (clients) for a specified period.

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Essential logistics data (2/2)

Adjustments and losses (positives & negatives)

The quantity of stock put into or out of the distribution network for reasons other than routine receipt & consumption by clients obsolete stock, losses/missing stock products received or transferred to another Centre counting error correction

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LMIS data - Types of source documents (1/3)

In logistics, there are only THREE things that can happen to products in distribution chain:

• Received and stored in the store • Issued / taken out of the store

• Used by the final consumer

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LMIS data - Types of source documents (2/3)

Figure 1: Illustration of three types of documents

LMIS data - Types of source documents (3/3)

To have the possibility of monitoring products at any time in the distribution network, there is need for three main types of documents:

1) Stock management documents : It includes information regarding product in stock, eg Stock Card

2) Documents relating to stock movements: It includes the information concerning issued products eg. Requisition and issue Voucher.

3) Documents related to consumption: It includes information regarding products consumed/used, Eg. Daily dispensing log

Documents related to Stock management

Stock CardData on hand, adjustments and losses, the quantity received, the amount issued, transaction dates, providers, recipients, etc.

Proposed stock card for RHU clinics.doc

Do you maintain stock cards? Electronic or manual?

Documents related to stock movement

 Invoice & delivery notes

Requisition and Issue Vouchers: data on products name, the quantity requested, the quantity issued, the date of delivery, etc.

Which documents are you using?

Documents related to stock consumption

Daily register of activities / Dispensing Log : Data on the dates & quantity of products issued to the clients

Proposed Dispensing log for RHU clinics.doc

Which documents are you using?

Root Cause Analysis – Stock outs and wastages / expiries at RHU

Why do we experience stock outs?

Why do we experience wastages / expiries?

THANK YOU