Logistics Management In Health Flashcards
Define Logistics Management
Logistics management is the governance of supply chain management functions that helps organizations plan, manage and implement processes to move and store goods.
The Council of Supply Chain Management Professionals (CSCMP) defines logistics management as
The Council of Supply Chain Management Professionals (CSCMP) defines logistics management as— “[The] part of supply chain management that plans, implements, and controls the efficient, effective forward and reverses flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers’ requirement
why logistics is important for all health programmes
Why logistics matters
Why Logistics Matters
•Increasing programme impact
•Enhancing quality of care
•Improving cost effectiveness and efficiency.
Increasing programme impact
Increasing programme impact
•If a logistics system provides a reliable supply of commodities, more people are likely to use health services.
•Customers feel more confident about the health program when they have a constant supply of commodities— it motivates them to seek and use services. Notice that, as the availability of a mix of contraceptive methods improves, the contraceptive prevalence rate (CPR) for the public sector increases.
Enhancing quality of care
Enhancing quality of care
•Well-supplied health programs can provide superior service, while poorly supplied programs cannot. Likewise, well-supplied health workers can use their training and expertise fully, directly improving the quality of care for clients. Customers are not the only ones who benefit from the consistent availability of commodities. An effective logistics system helps provide adequate, appropriate supplies to health providers, increasing their professional satisfaction, motivation and morale
Motivated staffs are more likely to deliver a higher quality of service
Improving cost effectiveness and efficiency
An effective supply chain contributes to improved cost effectiveness in all parts of a program, and it cannstretch limited resources.
•Strengthening and maintaining the logistics system is an investment that pays off in three ways.
(1) It reduces losses due to overstock, waste, expiry, damage, pilferage, and inefficiency;
(2) it protects other major program investments; and (3) it maximizes the potential for cost recovery.
Logistic system
Logistics System
•A restaurant is one example of a simple logistics system.
• The kitchen is a storage facility; the food is held there until it is delivered to the customer.
•Waiters provide the transportation; they carry the food from the kitchen to the customer.
•The tables are the service delivery points, where customers sit to order and eat the food.
The Six Rights of Logistics
The Six Rights of Logistics
•The RIGHT goods in the
•RIGHT quantities in the
•RIGHT condition delivered… to the
•RIGHT place at the
•RIGHT time for the
•RIGHT cost.
In many health programmes, health commodities are donated by international implementing partners or charitable organizations; but, if an item is donated, does the sixth right, at the right cost, still apply?
YES
Logistics Cycle: Organizing Logistics System Activities
Logistics Cycle: Organizing Logistics System Activities
•major activities in the cycle
• heart of the logistics cycle
•quality monitoring of the activities
• logistics environment—policies and adaptability of the system.
Major activities in the logistics cycle
Major activities in the logistics cycle
•serving customers.
•product selection.
•quantification.
•procurement.
•inventory management: storage and distribution.
Heart of logistics cycle
Quality monitoring of activities
Quality monitoring of activities
•Between Product Selection and Quantification & Procurement.
•Between Quantification & Procurement and Inventory Management.
•Between Inventory Management and Serving Customers.
•Between Serving Customers and Product Selection.
Policy and adaptability
Government regulations and procedures affect all elements of the logistics system. (eg Procurement Act & Public Financial Management Act)
• When items are distributed; where and how items are stored; and the quantities customers receive (often called dispensing protocols).
•Fiscal and budget policies are often some of the most influential policies affecting a logistics system, whether related to securing funding for product procurement; or to pay for critical infrastructure, such as storerooms and transportation.
Adaptability is a characteristic of all successful logistics systems.
•Logistics systems must be designed to be flexible and adapt to constantly changing circumstances, such as changes in demand for a product, or changes in funding policies for logistics activities.
•In one sense, adaptability speaks to the logistics system’s ability to successfully obtain the resources that are necessary to address changes in demand. For example, as demand increases, the logistics system needs to be flexible enough to respond to the increase in the quantities of products
Logistics Management Information System
A logistics management information system collects, organizes, and reports data that enables people to make logistics system decisions.
Essential data for descision making
The questions might include the following:
If data are to be collected for decision making, you need to know what data to collect and how frequently to collect it.
•To decide what data to collect, look at the decisions you will need to make.
•Think about the questions logistics managers might ask.
•What information would they need to answer those questions and make informed decisions
The questions might include the following:
•How long will current supplies last?
•When do we need to order more supplies?
•Where are our supplies in the pipeline?
•Do we need to move supplies from higher to lower levels?
•Where is consumption the highest?
•Do those facilities need more resources?
Are we losing products from the system that require us to take action?
•Are supplies flowing smoothly through the pipeline?
•Do we need to adjust our pipeline to account for bottlenecks in the distribution system?
•Are any products about to expire?
•Should we take them out of the pipeline? Can we redistribute them; can they be used before they expire?
Three Types of Logistics Records
Three Types of Logistics Records
From a logistics point of view, only three things can happen to supplies in a pipeline—they can be stored, moved (in transit), or consumed (used
•Stock keeping records: Holds information about products in storage.
•Transaction records: Holds information about products being moved.
•Consumption records: Holds information about products being consumed or used.
What is the most important reason for having stock keeping records?
They are used to record information about products in storage.
What essential data items do stock keeping records contain?
They must contain the quantity of stock on hand; the quantity of losses; and the quantity of adjustments, by individual product.
What about the third essential data item, consumption?
Usually, products are not distributed (dispensed) directly from the storeroom to the customer; therefore, actual consumption data is not collected on a stock keeping record.
•Issues data recorded at the lowest-level stock keeping record can be a substitute for consumption data, if those data are not available (for example, from a facility store to the dispensary).
Who completes the stock keeping record?
It is completed by anyone who receives or issues stock from storage, and by anyone who takes a physical inventory of the stock, including the warehouse manager and other warehouse staff, and service delivery point (SDP) staff.
•Pharmacies store stock; the staff should also use stock keeping records.
•The pharmacist and other pharmacy staff are responsible for completing these stock keeping records
When are entries made to stock keeping records?
They are recorded on the stock keeping record whenever products are received or issued.
•Entries are also recorded when stock is counted during a physical inventory, or as soon as a loss is noticed.
•When the stock keeping record is full, a new record is started, using the ending balance from the previous record
How are the data on a stock keeping record organized?
They are organized by date and transaction reference (the unique number of the corresponding transaction record for a receipt or issue, and/or the name of the facility from which products are received and issued).
•They record receipts, issues, losses and adjustments, and the balance on hand.
•They also record the results of physical inventories (when items are counted to verify the quantity in storage).
What is a bin card?
The card should note the stock on hand of paracetamol for that lot only, as well as any losses and adjustments for that lot.
•Bin cards are usually displayed at the bins (or shelf or pallet position) where the lot is found.
It is an individual stock keeping record that holds information about a single product by lot number or batch number (see figure ).
•Every item in that lot will have the same expiration date. For example, one bin card would hold information about a single lot of paracetamol at a storage facility.
What is an inventory control card?
It is an individual stock keeping record that holds information about all the lots of a single product.
•You should keep one inventory control card for each product.
The inventory control card may be a summary of many bin cards for a particular product. For example, one inventory control card could hold information about all the paracetamol in a storage facility.
•It should note the total stock on hand of paracetamol in the warehouse, as well as the total losses and adjustments, without regard to lot number or where the product is located in the warehouse.
What is a stores ledger
•It is a stock keeping record that contains the same information as the inventory control card described above.
•Unlike inventory control cards, a stores ledger is bound like a book; it is used instead of the individual card format
What is an issue and receipt voucher (IRV)?
An IRV lists the items and quantity issued to a facility.
•It also includes a separate column for the quantities received in case any items are lost or damaged en route.
•IRVs are used in a push system; the issuing facility determines the quantity to be sent and issues the supplies to the receiving facility.
•An IRV is should be completed in triplicate (three copies).
What is an issue and receipt voucher (IRV)?
An IRV lists the items and quantity issued to a facility.
•It also includes a separate column for the quantities received in case any items are lost or damaged en route.
•IRVs are used in a push system; the issuing facility determines the quantity to be sent and issues the supplies to the receiving facility.
•An IRV is should be completed in triplicate (three copies).
What is an issue and receipt voucher (IRV)?
An IRV lists the items and quantity issued to a facility.
•It also includes a separate column for the quantities received in case any items are lost or damaged en route.
•IRVs are used in a push system; the issuing facility determines the quantity to be sent and issues the supplies to the receiving facility.
•An IRV is should be completed in triplicate (three copies).
What is a requisition, issue and receipt voucher?
A requisition, issue and receipt voucher (RIRV) is similar to an IRV, except that the RIRV is used only in a pull system (if it is completed by facility staff)
•An RIRV lists the items and quantities requested by a facility. It also includes a column for the quantity actually issued.
•This is important in situations when it is impossible to supply the full amount requested.
•Like an IRV, the RIRV includes a column for the quantity received, which helps to account for any losses or damage enroute.
Completing the RIRV form
What information, other than the essential logistics data items, can you include on a transaction record?
In addition to the item description and quantity of each item being moved, all transaction records should include dates, signatures, and a space for comments.
•The signatures indicate responsibility for and authorization of a transaction (by, for example, an accounting department or programme manager).
Importance of Procurement in the Supply Chain
Procurement is a critical part of the logistics cycle
• Procurement planning and the procurement process are important activities that ensure the correct products are available in-country and are ready for distribution when they are needed.
• Without procurement procedures and processes, you would not be able to meet the six rights.
•A procurement unit with staff also ensures that national procurement regulations and procedures are properly implemented
Key stakeholders in the procurement process
The programme unit (i.e., the Family Health Division, National Malaria Control Program, etc.) usually determines what products need to be procured to support their programs.
•The National Drug Regulatory Agency (Food & Drug Authority) should be part of this process; this will ensure that the procured products are registered for use in the country.
Funding agencies are another important stakeholder in the procurement process (donor organizations, intergovernmental loans, or national treasury funds managed by the Ministry of Finance, each has procurement requirements as a condition of their support).
•Manufacturers are responsible for registering products in countries before procurement takes place
Key terms in health commodity procurement
tender. The documentation and initiation of a process for soliciting bids; the specifications for the product/service desired and opening the contract to the bidding process.
•bid. A written offer for a quantity of goods, works, or services, at a stated price; based on technical specifications and other terms and conditions. Bids are submitted to a purchaser by an interested seller in response to an Invitation for Bids.
prequalification (WHO). This is a process of predetermining that a specific product, from a specific manufacturer, meets stated requirements. WHO prequalified products use their own mechanism to provide assurance of quality, especially for countries unable to undertake the process.
•supplier. The party that transfers goods out of its control and to a named recipient.
•direct procurement. Purchaser contracts for goods directly with a manufacturer or its representatives.
Indirect procurement:
Procurement process
Key Challenges faced in Procurement
Key Challenges faced in Procurement
•accurate quantification/forecast data
•Lengthy procurement process
•delays in funding allocation and release
•Product quality assurance
•Transparency throughout the procurement process
Storage and Distribution
Products are stored at every facility in the pipeline; almost everyone working in the supply chain is responsible for product storage.
•Storage ensures the physical integrity and safety of products and their packaging, throughout the various storage facilities, until they are dispensed to clients.
•An important goal in storage of health products is the correct staging of health products to ensure that orders can be filled and distributed
Key storage activities
Material receiving and incoming inspection: This activity occurs during the unloading of vehicles
•Put away: This process includes moving products from the unloading dock, or receiving area
•Picking and packing. To fill shipping requests (or picking lists), products must be located at the right places for onward shipping
Shelf life
Shelf life is the length of time from manufacturing date to the final date a product can be safely used, or the length of time that product can be stored without affecting its usability, safety, Some basic questions and answers on shelf life are— purity, or potency.
Some basic questions and answers on shelf life
Some basic questions and answers on shelf life
•how important is the expiration date?
•What is the shelf life in my country?
•Why does shelf life change?
•Where can I find the shelf life for essential medicines, contraceptives, and other health commodities?
Key logistic terms
Key Logistics Terms
•Clients usually refers to someone who receives a treatment or service. For example, they could be a family planning client and receive contraceptives; or they could be a client and receive a service, such as a test for malaria or TB.
•Patients is a term often associated with clinic patients receiving treatment for an illness, such as those in an antiretroviral therapy (ART) programme.
Customers is a term typically used by the private sector; it helps reinforce the concept of customer service. In public health programs, all users, clients, and patients are considered to be customers in the same way a commercial business thinks of its customers: the service provider, health center, and laboratory are there to serve the customer.
•Service delivery points (SDPs) are usually hospitals and health centers, but may also include mobile units, community-based distributors, laboratories, and health posts
Good – used interchangeably with stock, commodities, supplies, products, and other terms to refer to all the items that flow through a logistics system
•Lead time - the time between when new stock is ordered and when it is received and available for use. This varies, depending on the system, speed of deliveries, availability and reliability of transport, and sometimes weather condition at the time of order/request
. Pipeline
Lead Time: The time between when new stock is ordered and when it is received and available for use. When logistics managers evaluate how well a logistics system is meeting the six rights, they measure the lead time and try to reduce it.
•Goods should be available to customers at the right time—before the customer asks for the product.
•It can be calculated within the entire in-country system, from arrival in port to the end user, between specific levels of the system, or even the procurement lead time from when a product is
Stakeholders
Stakeholders
•Consumers
•Providers
–Hospitals
–Physicians and Clinics
–Long-term care facilities (e.g., nursing homes)
•Pharmaceuticals, Medical Device, Biotechnology firms
•Insurers
•Employers
•Government
Health triangle
Transportation
Transportation is necessary to access goods, services and activities such as emergency services, health care, adequate food and clothing, education, employment, and social activities.
Transport in the supply chain
(Slides)
Availability of vehicles
•Maintenance of vehicles
•Ability to deliver on time
Key issues in Transportation
Key issues in Transportation
•Insurance cover
•Road worthiness
•Routine servicing noting all the renewal dates
•Professional drivers
•Fuel consumption – depending of capacity of usage
Documentation of transportation
Generalized list of documents accompanying the goods:
1)Waybill.
2)Commercial invoice
3)Quality certificate if the goods are of industrial origin.
4)Quarantine certificate if the goods are of vegetable origin.
5)Certificate of origin.
Transport log book – introductory page
Transport log book – introductory page
•Vehicle name/type
•Vehicle registration number
•Department
•Fuel card number
•Fuel type
•mileage
Sample vehicle book
Slides
Waybill
Slides
