UNICEF s Supply Function Nutrition Suppliers Meeting June 2017
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1 UNICEF s Supply Function Nutrition Suppliers Meeting June 2017
2 Critical functions of Supply Division Support results for children with an effective, efficient supply operation Help meet UNICEF s Core Commitments for Children in emergencies by providing rapid response to emergency supply and logistics needs Contribute to influencing markets to ensure sustainable access to essentials supplies for children Serve as a centre of expertise and knowledge on essential supplies for children and supply chains and build capacities of national governments Provide procurement services to governments and development partners on strategic-essential supplies Establish policies for supply chain activities Use product innovation to increase results and decrease costs
3 UNICEF Supply Strategies for UNICEF Outcome Areas Health HIV/AIDS WASH Nutrition Education Protection Inclusion UNICEF Global Supply Strategies Service Delivery Emergency Influencing Markets Product Innovation Strengthening Supply Chains with Governments Monitoring Supply Financing Solutions In-Country Logistics Institutional Contracting for Services
4 The Global Goals / The Sustainable Development Goals
5 UNICEF expenditure by major material groups 100% Vaccines $1.643 billion Gavi, BMGF, WHO, PAHO MSF, CDC 100% Pharmaceuticals $160.6 million WHO, UNFPA, UNDP, GFATM UNITAID, CHAI, MSF 100% Nutrition $150.6 million WHO, WFP,, MSF, CIFF 95% Medical supplies $106 million WHO, UNFPA, UNDP, GFATM UNITAID, CHAI, MSF, CDC 100% Bed nets & insect. $90.7 million WHO, UNFPA, UNDP, GFATM UNITAID ~30% Construction $ million SAVE, WB 100% Cold chain $32.7 million Gavi, BMGF, WHO, PAHO 30% 2016: $3.6 billion of supplies and services Water & sanitation $108.2 million WHO, Oxfam, SAVE, UNHCR > 85% of UNICEF procurement is in collaboration with other UN agencies ($2.9b) > 90% with UN agencies and other development partners ($3.1b) 30% 100% Education $83.8 million SAVE, WB International freight $91.4 million UNDP, UNHCR, UNOPS, WHO
6 UNICEF procurement by location US$ Millions $4,000 $3,500 $3,000 $2,500 $2,526 $2,000 $1,500 $1,000 $1,465 $836 $500 $889 $270 $308 $ Local procurement International procurement 3x growth in procurement over 10yrs Local and international procurement grown at same rate Faster growth in recent OMP period Increases can be explained by: Increasing aid flows over decade Growing ambitions of programmes (e.g. to reach more children with more vaccines, to reduce inequities) Proliferation of partnerships (Gavi, GFATM, GAIN, GPE ) with supply component Drive towards the MDGs Increasing number of emergencies and protracted crises during
7 Funding channel for UNICEF procurement US$ Millions % Procurement on behalf of partners (i.e. PS funded) has grown in absolute and relative terms % 65% Underscores the evolution of economic development, of donor (supply) financing policies: % 63% Countries in transition Trend towards commodity co-financing 48% Procurement Services Programme 7
8 Global & local warehousing and transport Inventory (as of end-december 2015) $199 million globally $44 million in SD SD managed warehouses 2015 $130 million value of throughput 319,173 kits packed and shipped Dubai: nutrition, natural disasters Shanghai: Education kits Panama: serves LAC, natural disasters Djibouti: serves Yemen The Global Supply Warehouse - Largest humanitarian warehouse - Highly automated - Hazards & GDP certified Kit-packing targets Reduce lead-time (3 million items) Health kit-packing in Africa & India 291,052 14,387 kits packed tonnes of supplies dispatched 1,420 avg. pallets per week $120.3 million value of goods 4,370 outgoing deliveries in 2015
9 Global emergency activities
10 Government Supply Chain Strengthening
11 Supply chains can differ by product, sector, transaction Improve Performance Reduce stock-outs Lower transportation costs Ensure timely delivery Improving supply chain performance within different modalities Definition of Need Budgeting& Planning Procurement Delivery & Clearance Inspection Warehousing, Distribution & Reorder Utilization Monitoring & Evaluation a UNICEF Government Different modalities of Service-Delivery b UNICEF Government c UNICEF Government d UNICEF Government e Governmemt Capacity Development: Focus on sharing UNICEF added-value (expertise on markets, products, inventory, monitoring & convene StS(predominantly e) Strengthening together (a, b, c, d) Optimising UNICEF(a, b, c)
12 UNICEF s engagement with governments on strengthening supply chain capacities Predominantly focused on health, nutrition and immunization supply chains National targets for improved performance: Reduce stock-outs Lower transportation costs Timely delivery Reduce waste Visibility Reach all children
13 Influencing Markets
14 Influencing markets with partners Analyze and set targets Availability Quality Affordability Sustainability (including local production) Innovation Employ Strategies Pool volumes Convene Industry Forums Provide Forecast to industry Transparency- publish prices Foster competitive markets Strategic procurement Volume guarantees Bridge financing Collaboration
15 Cumulative savings from 2012 to date > $1 billion Original target for was $810 million This was reached and exceeded by $259 million by 2016 through procurement efforts to influence markets A joint achievement with Gavi, BMGF, GFATM, UNITAID, DFID, MSF and suppliers
16 Supply Financing Solutions, To respond to these needs, we ve conducted activities through 4 workstreams: Impact on Countries Country Financing Pre-Financing Grants and MoH Budgets Increasing Gov t Fiscal Space ~$50m worth of transactions pre-financed in 2015YTD VII Expansion & USF s Bridge Fund relatedto PS Nigeria $21m credit line for Routine Immunization Support country-owned budgeting and sustainability initiatives Facilitate implementation of local public-private trust funds; access to commercial markets Addressing cash flow timing gaps Increasing availability of funds / budgets Supply Financing Special Contracting Local Supplier Base Development PentaSpecial Contracting $57m+ savings over 2 years (MICs-GAVI price parity) Additional models to achieve firm contracts including multiple partial-firm models, optionbased models Support access of new suppliers in programme countries to financing via leveraging UNICEF s network, convening ability and credit profile Lower prices, secured quantities, etc. Lower prices + domestic economic development
17 Product Innovation 17
18 Product development process Identification of Bottlenecks Program inputs Feedback from partners End-user feedback Define and Communicate Potential Solutions User research Target product profile Expression of Interest, Request for Proposals Product Development & Testing Funding academic research Field trials in UNICEF context Convening of partners/advisory committees for feedback Market uptake and Scale up Advance purchase commitment Cost-sharing for new products Programme integration
19 Product Innovation Project Pipeline Social, economic and geographic obstacles can often prevent children from accessing the products that would improve their survival and quality of life. In 2016, UNICEF Supply, with technical expertise and support from ProgrammeDivision and regional and country offices, managed 19 projects at different stages of the innovation process.
20 Supply Community
21 Supply Community 1,023 staff globally 136 nationalities 99 offices 94 countries Objectives of establishing a Supply Community: Supportive environment Professional development Professional belonging & support Career mobility Knowledge sharing o Logisticians o Buyers o Warehouse managers o Shipping experts o Market experts o Monitoring specialists o Product experts o Pharmacists o Nutritionists o Planners/Forecasters o Architects o Engineers o Inspectors o Quality Assurance o Financing experts
22 Thank you! 22
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