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Improvement of the Last Mile Distribution in Cote D'ivoire

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Improvement of the Last Mile Distribution in Cote D'ivoire Improvement of the last mile distribution in Cote d’Ivoire Integrated Health Supply Chain Technical Assistance Program (IHSC-TA) Phase III – Preparation of last mile distribution pilots 1 REMINDER – Context and objectives ▪ The country aims to achieve a 95% availability of health products at the last mile by 2020 ; a National Strategic Supply Chain Plan (PNSCA) 2016-20 and a PNDAP Roadmap (2017-19) have been developed to achieve this objective ; 2 pilots are being launched to test a new distribution model between districts and the ESPCs ▪ As part of the PNDAP roadmap, Phase I of the study, conducted in January-February 2018, consisted of a supply chain diagnosis - mapping, evaluation of the operational and financial performance, strengths and challenges - with a focus on the last mile ▪ Phase II of the study, conducted in March-April 2018, aimed, on the basis of this phase I, to: – Define the major improvements to last-mile supply regarding identified challenges – Suggest various alternative supply models implementing these changes, and decision criteria to choose between these models – Propose improvements to the planned pilots and / or a new pilot to test certain improvements ▪ In Phase II of the study, improvements to the last mile supply chain were proposed on operational and catalytic dimensions, including : – Operational dimensions of the chain : ▫ Optimized portfolio (products to be continuously available) to be dynamic and adapted to real needs Context and ▫ Transition to an institutionalized delivery system across all segments objectives ▫ Maintain a monthly delivery target at all levels, with harmonization with NPSP order cycles and immediate eSIGL reporting ▫ Formalization and systematization of reverse and transverse logistics, and integration into the distribution system, with dedicated financing – Catalytic dimensions of the chain : ▫ Clear support by a central entity for monitoring and management of last mile performance and clarification of the scope of action of all stakeholders along the chain ▫ Transfer to a professional (private operator or PGP from the district) of part of the last mile logistic tasks carried out by the medical staff of the ES (e.g. inventories, determination of the quantities to be delivered) ▫ Culture change in the system via financial and non-financial incentives (e.g. performance-based financing), training and reinforcement of exemplarity ▫ Adoption of an integrated information system including ordering and inventory management ▫ Digitization up to the last mile allowing real-time data access at all levels ▫ Increased self-financing with a more systematic and sufficient collection of sales margins at the relevant level and financial support dedicated to last-mile logistics 2 SUMMARY – Main questions of phase III ▪ Based on Phase II recommendations, Phase III aims to prepare for the launch of two last mile distribution pilots: a pilot based on district resources and a pilot based on the capabilities of private operators. The main questions that Phase III seeks to answer are the following: – What is the operating model of the public pilot and private pilot? – Which districts will be part of the two pilots? – What is the “product portfolio” to be continuously available at the ESPC level? – Which digital application to use to collect the data when visiting the ESPC? – How to monitor and evaluate the pilots? – What are budget will be needed to fund the two pilots? – How to prepare the national rollout of the two last mile distribution models? Main questions 3 REMINDER – Diagnosis ▪ Product availability is generally still well below the 2020 target of 95% at the peripheral level, with a performance ranging from 50% to 80% on average depending on the level of the chain. ▪ Several chains coexist in parallel or autonomously - e.g. autonomous chains for PNMTN, blood transfusion products or vaccines, NGO parallel chains on a large number of products ▪ Significant funding is being committed on all these channels despite their performance - estimated at XOF25+ billion / year for all supply chains, of which XOF15+ billion / year for the last mile; Self-financing through profit margins is limited - from 0% to 9-15% of the last mile logistics costs according to the chain under consideration ▪ 10 major problems hinder last mile supply chain performance on operational and catalytic dimensions : – Operational dimensions of the chain : ▫ 1) Quantitative and qualitative deficiencies of storage spaces at district and ESPC levels ▫ 2) Insufficient compliance with the delivery schedule by the NPSP and low order satisfaction rate ▫ 3) Insufficient implementation of the guidelines for the management of the stocks (e.g. respect of the Reminder of thresholds) the main ▫ 4) Collection of products by the ESPC instead of delivery by the districts - inadequate transport conclusions conditions and additional costs, limited quantity transported of the ▫ 5) System entirely based on orders with risks of errors, non-compliance with thresholds, product diagnosis preferences of the nurse vs. preferences of the patient ( for paid products) – Catalytic dimensions of the chain : ▫ 6) Incomplete integration of the chain (e.g. CNTS, viral load, PNN, MTN), resulting in additional costs and replication of inefficiencies ▫ 7) Logistics managed by medical staff in many cases (e.g. CSR) ▫ 8) Insufficient performance incentives or accountability systems at all levels ▫ 9) Prevalence of manual tools and insufficient information flow (stock status, consumption) between all levels ▫ 10) Lack of financial sustainability mechanisms, e.g. margin recovery - and limited financing of the last mile distribution 4 REMINDER – Pilots improvement and potential new pilot ▪ Among the improvements proposed (strong convictions and dimensions to be arbitrated) some can be tested, either by improving existing pilots or by designing new pilots ▪ Potential improvements to dimensions already covered by the planned pilots can be implemented: – SWEDD & PARSSI pilots: Strengthening performance monitoring (e.g. weekly reporting, immediate communication at regional level in case of problems) – Pilot SWEDD : Indexation of penalties on the seriousness of the operator's failures (vs. fixed penalty); PGP participation in deliveries to coach and supervise ESPC staff Potential – Pilot PARSSI : District performance incentive mechanism to ensure accountability improvement New dimensions can also be tested by the planned pilots, e.g.: s of planned ▪ pilots – Allocation on site with stock replenishment at the time of delivery according to the level of stock observed and consumption since the last delivery – Transfer of inventory ownership to the ESPC and increase their accountability by moving to a cash sales system with initial inventory financing – Appointment of a governance structure responsible for the day-to-day monitoring of operations and key performance indicators – Digitization of data collection and feedback from ESPC – Financial and/or non-financial incentive to the performance of the logistics personnel involved ▪ To test solutions adapted to the root causes of underperformance in an even more integrated model, an additional pilot can be considered ▫ Use of the current route but delivery to the ESPC by an operator (public or private) ▫ Establishment of a decision system on quantities delivered based on the principle of replenishment of stocks during delivery according to stock levels and consumption since the last delivery ▫ Possible presence of the district PGP at the time of delivery for logistical supervision of the ESPC Definition of a ▫ Operator or PGP responsible for digital data collection and immediate data feedback at all levels (e.g. new pilot tablet), with integration of the IT system into existing systems (e.g. eSIGL) ▫ Implementation of a governance structure responsible for the daily monitoring of operations and key performance indicators (e.g. availability rate, sales volumes) ▫ Financial or non-financial incentives for managers' performance ▫ Financial autonomy of the districts and the ESPCs (cash sales, own bank account, setting up an initial product stock and repurchase of products thanks to sales) 5 SUMMARY – Preparation of last mile distribution pilots (1/4) ▪ Following the recommendations of Phase II, it was decided to adapt the two existing last mile distribution pilots to address the challenges identified during the diagnosis. Thus, two last mile distribution models will be implemented ; (i) one based on the district's distribution capacities, (ii) the other experimenting with the outsourcing of distribution to a private service provider. Increasing product availability is based on 5 dimensions : – The definition of an optimized product portfolio to be available at the ESPC level; – “Push” model for product flows (delivery) and harmonized frequency for all products: deliveries take place once a month, from the districts to the ESPC according to an established distribution schedule – "Requisition": In this process, the PGP/district pharmacist or PGP of the private provider will coach the ESPC agent on good practices for storage, inventory, and order preparation. The determination of the quantities of products to be ordered for the next delivery will be carried out jointly between the PGP or pharmacist and the nurse of the ESPC at the time of delivery ; Pilot models – Governance will be led by the regions and by the PNDAP to monitor operations and performance ; – Digitization of last mile distribution data collection : ▫ Implementation
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