Supply Chain

Effective supply chain management approach for essential drugs in Low- and Middle-Income Countries

Introduction

Frequent stockouts, lack of labor, and transportation issues point to ongoing challenges in the global supply chain of providing essential drugs.
A well-functioning health supply chain is critical to meeting the healthcare needs of populations in low- and middle-income countries (LMICs), where frequent stockouts, lack of labor, and transportation issues point to ongoing challenges in the global supply chain of providing essential drugs and other health products to targeted populations in such countries (Jbaily A. et. al. 2020).

From my research on the topic for this blog, I learned that evidence-based studies of effective health products distribution methods are limited. However, in one such study, researchers Monique Vledder, Jed Friedman, Mirja Sjöblom, Thomas Brown & Prashant Yadav, examine two types of distribution models. In doing so, they highlight the most scalable supply chain management structure for smooth distribution of essential drugs in health facilities located Zambia. The study design and findings offer a new understanding and evidence of the most effective and cost-efficient way to deliver essential supplies to health facilities for better health outcomes. In this post, I describe the study intervention, its findings, and implications for minimizing health supply distribution challenges in LMICs.

Description of Examined Supply Chains

The authors focused on 3-tiered and 2- tiered approaches to compare their efficacy in addressing the challenges mentioned above.
Supply chains have various structures, all of them designed to achieve smoother distribution of drugs and other health products. However, studies have shown that certain structures are less effective than others. For example, a multiple-level approach often has issues such as bottlenecks at various levels of the distribution system, overstocking or stockouts of supplies, and potential theft and damage of the products in storage facilities of the decentralized sites (Yadav, 2014).

The authors focused on 3-tiered and 2- tiered approaches to compare their efficacy in addressing the challenges mentioned above, measured against the control group of the existing 3-tiered distribution system in Zambia.

A 3-tiered supply distribution approach, referred to here as enhanced distribution, involved a decentralized logistical system. The primary distribution was facilitated by a parastatal agent, the Medical Stores Limited in capital city of Zambia to district stores and hospitals. The secondary distribution was facilitated by District Health Management Team (DHMTs) from district stores to health facilities. The DHMTs reported to the Ministry of Health. Unlike the existing control 3-tiered approach, the enhanced distribution approach added a new role of the Commodity Planner at the district level to coordinate stock planning and management.

A 2-tiered approach, referred to here as cross-docking, utilized the district-level distribution site as a cross-docking station between the Central distribution site and health facilities. They eliminated the intermediate district level storage and the district store acted as point of transit, so no stocking, picking, or packing was done by them.

Study Design

The authors conducted a large-scale randomized control trial with three arms to compare enhanced distribution and cross-docking to each other, and to a control group, based on surveying 439 health facilities in 24 districts of Zambia. The authors primarily looked at the incidence of drug stockout for 15 tracer drugs during the survey at baseline and end line. Tracked drugs included antibiotics and anti-malarial medications. An inventory was taken for each of the 15 drugs, to evaluate which of the three approaches resulted in the lowest stockout rates, measured against estimated stockout duration. They also conducted qualitative surveys in health facilities in 2009, for baseline and a year later for the end line. Additionally, the storage conditions that included appropriate storage temperature, fire safety, storage pallets, and shelves were assessed.

Another feature of the study design is the use of Randomization Inference (RI) to analyze the data. Since the study had a small number of observable units, a total of 24 districts in Zambia, the application of RI “considers what would have occurred under not only the random assignment that happened to be selected for the experiment, but rather under all possible random assignments,” (World Bank).

Findings

The results from the study showed that the cross-docking approach significantly decreased the incidence of stockout…The study also demonstrated how the duration of drug unavailability was reduced significantly.
The results from the study showed that the cross-docking approach – having a direct delivery of health supplies from the central stores to various health facilities – significantly decreased the incidence of stockout of essential medications. For example, the stockout rates from baseline to end line for oral Amoxicillin were reduced by 55 percent in cross-docking, compared to 41.5 percent in enhanced distribution. Similarly, the stockout rates for Artemether-lumefantrine, an essential anti-malarial drug, decreased by an average of 37 percent in cross-docking, compared to 12 percent in enhanced distribution.

The study also demonstrated how the duration of drug unavailability was reduced significantly using the cross-docking approach in comparison to the enhanced distribution and control approaches. For example, the duration of anti-malarial drug unavailability decreased by 87 days in cross-docking, compared to only 18 days for enhanced distribution and 27 days for control approaches. Additionally, facilities that implemented cross-docking also scored higher for commodity organization and storage conditions, likely because the direct communication between health facilities and the central supply agency of Zambia facilitated greater accountability and more effective decision-making to meet the needs of the facilities.

Analysis

Among the 439 health facilities that were surveyed in 24 districts of Zambia, the facilities that utilized the cross-docking approach made significant stockout improvements in comparison to the ones that utilized the enhanced approach. The reduction in stockout rates, number of days for drug unavailability, as well as improvement in commodity, and storage organization, show that the cross-docking approach made significant improvements for supply chain management in Zambia.

An important aspect of the study was that it sought to ensure a geographic balance by stratifying rural or peri-rural regions and risk factors for diseases, such as malaria prevalence. The researchers also considered external factors like weather conditions and infrastructure such as road accessibility. This consideration of other features lends the study external validity and provides a perspective on how applicable the cross-docking approach can be in countries with similar geographic, financial, or social settings.

Implications

The cross-docking approach provides better on-demand information concerning flow and accountability between the central distribution center and the health facilities in LMICs.
I believe the study provides adequate evidence on how a streamlined 2-tiered cross-docking distribution supply chain structure is more effective and efficient for essential health drugs delivery than a multi-level distribution structure. The cross-docking approach provides better on-demand information concerning flow and accountability between the central distribution center and the health facilities in LMICs.

With that in mind, it is important to recognize that this study was conducted between 2009 and 2010, and finally published in 2019. Many social, political, and developmental changes have occurred in Zambia and other LMICs since. Additionally, while the research highlighted above offers promising findings regarding the cross-docking approach, there remains a limited number of evidence-based studies of this approach, and supply chain management more broadly. Hence, further research is warranted to understand the feasibility and sustainability of the cross-docking approach in various settings, including at times of crisis.

Photo credit: Jessica Scranton/FHI 360

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