CONSUMPTION TO PROCUREMENT. Linking plans on the commodity supply chain
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2 CONSUMPTION TO PROCUREMENT Linking plans on the commodity supply chain
3 PLANNING OVERVIEW Supply chain linked by planning flow Recipient Country National Quantification Consumption Forecast National Supply Plan Funder Allocation Global Supply Chain GSC Demand Plan Order History/Analytics Field Office Communications Partner Collaboration GSC Supply Plan RDC Inventory Open Purchase Open Country Supplier Network Contracts Supplier Collaboration Capacity Inventory Raw Materials Source Allocation Supply Assurance Planning Flow Product Flow
4 Quantification NATIONAL QUANTIFICATION Projected end-user consumption initiates the signal in the supply chain Consumption Forecast National Supply Planning Funder Allocation Purpose quantify future use of commodities by end users Dynamic methods & tools utilized based on commodity type & data availability Purpose project future delivery needs based on consumption forecast, stock on hand, inventory parameters, and lead times Strategies are implemented for delivery frequency based on commodity Purpose determine source of funding for each supply plan line item National funds impact the magnitude of donor funding required Quantification Contributors Ministry of Health Donors (USAID/GFATM/UNFPA) Clinicians Technical Assistance Providers Implementing Partners National quantifications are typically held annually with regular supply planning updates occurring for some commodities
5 Quantification NATIONAL QUANTIFICATION Programmatic initiatives considered at country level Programmatic goals & initiatives are incorporated during quantification Seasonal Consumption PMI Strategy FP 2020 Test and Treat Seasonal Malaria Chemoprevention Implant Access Initiative Many more National Supply Plans are collected and reviewed prior to proceeding Submission Tracking by Country Data integrity Cost Shipment Status Lead Times Available Stock Planning Process Monitor unfunded requirements
6 GLOBAL SUPPLY CHAIN PLANNING Supply chain approach aligned to overall product needs Quantification Source to Forecast Source to Order Local Supplier Replenishment Order Commodity Supplier Strategy/ Purchase GSC Regional Distribution Center (RDC) GSC Commodity Purchase Commodity Country Supply Plans/ Commodity Country Supply Plans/ Field Office/ Mission Field Office/ Mission Field Office/ Mission Client/Recipient
7 Quantification PLANNING OVERVIEW Supply chain linked by planning flow Recipient Country National Quantification Global Supply Chain GSC Demand Plan Order History/Analytics GSC Supply Plan RDC Inventory Supplier Network Field Office Communications Partner Collaboration Open Purchase Open Country Planning Flow Product Flow
8 Central Overview Supply chain linked by planning flow Quantification Global Supply Chain GSC Demand Plan Order History/Analytics Field Office Communications GSC Supply Plan RDC Inventory Open Purchase Scope = Global Supply Chain Standard process framework applied with commodity relevant details Plans are PRODUCT-based with country breakdown as necessary Partner Collaboration Open Country month time horizon
9 GLOBAL SUPPLY CHAIN PLANNING PROCESS Standard process framework builds functional consensus by commodity group Quantification Demand Planning Supply Planning Reconciliation Purpose Create GSC consensus demand forecast independent of any potential supply/delivery constraints, documenting key risks & assumptions Process Owner Demand Planning Lead Contributors Plan team Market Dynamics Quantification Advisors Country Teams Capstone Meeting Demand Review Purpose Generate constrained supply plan, based on consensus forecast, that implements product inventory & procurement strategies Process Owner Supply Planning Lead Contributors Plan team Sourcing & Teams Deliver/Return Teams Capstone Meeting Supply/Inventory Review Purpose Ensure demand-supply alignment & cross-functional consensus on forward-looking plan Process Owner Planning Leads Contributors USAID GSC Director Plan team Sourcing & Teams Deliver/Return Teams Capstone Meeting Reconciliation Meeting Regular Cadence
10 GLOBAL SUPPLY CHAIN DEMAND PLANNING Standard process framework builds functional consensus by commodity group Quantification Collect Core Data Analyze Cross-functional Review Consensus Country Supply Plan Historic/Open Commodity Budgets Planned orders vs. historic Country by product Total by product Planned orders vs. budget Product category trends country by category, product vs. product New Product Introduction Draft Forecast Consensus Demand Forecast Additional Inputs WHO Guidelines Field Office Communications Macro Trends Shared Data Sources Statistical Models
11 Quantification GLOBAL SUPPLY CHAIN SUPPLY PLANNING Starts with inventory strategy implementation What Products? Where Which RDC, VMI? Product/Sourcing Strategy Product Growth Phase Demand vs. Supply Cost Transit Times Storage Requirements Benefits: Source to - Meet unplanned/emergency Forecast demand in the country - Demand consolidation upstream (Supplier/Manufacturer) - Achieve better service level Challenges: - Cost of transportation/storage - Aging inventory/product wastage Periodic evaluation of an optimized solution that balances benefits and cost How Much Safety stock/buffer? Lead Times/Shelf Life Service Level Forecast Accuracy Product registration and shelf life key constraints: Flexibility to respond to country-country demand variation Available shelf life at time of consumption
12 GLOBAL SUPPLY CHAIN SUPPLY PLANNING Network optimization lower costs and better service levels Quantification Currently project sources 2,000+ health commodities; ~40 source-to-forecast ARVs, VMMC, Condoms, Contraceptives, ACTs Existing network = 5 RDCs Singapore, Netherlands, South Africa, Ghana, Kenya New Source Network to = 3 RDCs Forecast Dubai, Belgium, South Africa ACT Contraceptives ARV Contraceptives ACT ARV ARV Condoms VMMC ARV VMMC Condoms Contraceptives ARV ARV
13 GLOBAL SUPPLY CHAIN SUPPLY PLANNING Standard process framework builds functional consensus by commodity group Quantification Collect Core Data Analyze Cross- functional Review Consensus Submission Consensus Demand Forecast Apply lead times Open Country Open Purchase Stock On Hand, Shelf Life Maintain safety stocks Consider constraints: Shelf Life MOQ Packaging Size Evaluate optimization opportunities Draft Supply Plans Consensus Supply Plans Provides procurement needs by product in month horizon Contracts/ fulfillment to execute procurement plans Framework that allows standardization across commodity groups Data/frequency of review tailored to the commodity needs Periodic assessment that allows demand supply synchronization
14 Quantification Global Supply Chain Supply Planning Supply plans driving sourcing action Supply Plan Product When Product Where When Where How Much How Much plan that provides needs by product in month horizon Replenishment: Release purchase orders for plan within lead time Country detail informs registration evaluation Forecasts: Provide month procurement projections Informs contract quantities: projection sets ceiling Supply allocation: Volume projections with clear needs to evaluate supplier awards Other Sourcing Strategy: Evaluate supplier addition/vmi/supplier warehousing etc.
15 APPROACH FOR MULTI -VENDORS AWARD plans driving sourcing action Quantification Amount/Scope AQSCIR-P Evaluation Multi-Vendor Award Strategy Assurance of Supply Regulatory Vendor A Rank # 1-50% 50K Packs Total Volume to be Awarded Quality Service Vendor B Rank # 2-25% 25K Packs Cost Vendor C Rank # 3-15% 15K Packs 100K Packs Innovation Price Vendor D Rank # 4-10% 10K Packs
16 Ambika Raghavan Supply Planning Team Lead Dan Kiesa Demand Planning Team Lead
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