Supply Chain Management System

Content as presented by the Supply Chain Management System Project.

2. Providing a reliable supply of HIV/AIDS commodities starts with good planning, which helps prevent stock outs and wastage due to overstock and expiry. At this workshop in Ethiopia in 2007, staff from several SCMS field offices learned how to do effective forecasting and supply planning. Since then, SCMS has transferred those skills to its counterparts in ministries of health and other agencies in many countries. About 80 percent of orders placed by SCMS are now planned. Photo credit: Glenn Milano
3. After carefully forecasting need, the next step is to order medicines, test kits, laboratory equipment and supplies, and other commodities from vendors. SCMS works hard to ensure on time delivery and best value for money. Staff from South Africa are pictured discussing upcoming deliveries of AIDS medicines via conference call with buyers in the Netherlands. SCMS’s on time delivery is high for the developing world, at around 75 to 80 percent each month. The project has saved more than $780 million through the purchase of generic antiretroviral medicines (ARVs) and more than $51.7 million by switching from costly air freight to more affordable sea and road freight. Photo credit: Jay Heavner
4. Suppliers deliver ARVs and other high-volume commodities to SCMS’s three regional distribution centers in Ghana, Kenya, and South Africa, where they are warehoused for a short time until being distributed to neighboring countries. This regional distribution center is near Johannesburg, South Africa. Photo credit: Andrew Bannister
5. SCMS’s regional distribution centers in Ghana, Kenya, and South Africa are pharmaceutical grade warehousing that meet international standards and employ state-of-the-art technologies to track and distribute inventory. The RDCs operate as independent commercial enterprises to provide a sustainable resource, and they attract private sector clients such as AstraZeneca, GlaxoSmithKline, Merck Serono, and Pfizer. Photo credit: Andrew Bannister
6. ARVs, test kits, laboratory supplies, and other commodities are shipped from regional distribution centers or direct from suppliers to central medical stores, which are typically operated by the Ministry of Health or other partner agencies. This central medical store is located in Mozambique. Photo credit: Benoit Marquet
7. In a few countries, like Haiti and Nigeria, SCMS operates local distribution centers that warehouse commodities for PEPFAR-supported programs. Pictured here is the local distribution center in Abuja, Nigeria, where PEPFAR implementing partners are picking up their supplies of HIV rapid test kits. Photo credit: David Fombot
8. In many countries, especially larger ones, central medical stores ship medicines and other commodities to regional medical stores. Here commodities arrive at a regional depot near Durban, South Africa. Photo credit: Disiree Swart
9. With support from PEPFAR and USAID, SCMS has helped improve the ability of central and regional warehousing and distribution to handle the very large volume of HIV/AIDS commodities flowing through them. In this regional store in Bahir Dar, Ethiopia, SCMS has provided racking, a forklift, and other equipment. The commodities on the shelves are awaiting distribution to treatment and testing sites in the region. Photo credit: Jiro Ose
10. Computerized warehouse management systems help track inventory, including stock levels and expiration dates. Each blue box on this computer’s screen corresponds to a pallet of commodities in the regional store in Bahir Dar, Ethiopia. Improvements like this to warehouse management are a smart investment, helping reduce stock outs and wastage due to overstock and expiry. Photo credit: Jiro Ose
11. Regional medical stores may serve hundreds of care, treatment, and testing sites. Staff at a warehouse in Mwanza, Tanzania, that PEPFAR and USAID helped outfit with modern equipment prepare customized shipments for multiple sites in an activity called “picking and packing.” Each box is filled to order for each site. Photo credit: Jay Heavner
12. Distribution to treatment sites typically happens via large delivery trucks. But when roads, like the Haitian roads pictured, are a challenge, smaller four-wheel drive vehicles are needed. Photo credit: Jacques Augustin
13. At other times and in other places, distribution is an even greater challenge. In Haiti and other countries with isolated islands, boats come in to play. The men and women who brave harsh conditions to deliver lifesaving medicines are truly heroes. Photo credit: Jacques Augustin
14. After arriving at treatment sites, medicines and other commodities must be properly stored until needed. At a treatment site near Mwanza, Tanzania, ARVs are carefully stored on wooden shelves by staff who were trained through a program operated by SCMS, with the support of PEPFAR and USAID. Photo credit: Jay Heavner
15. At the end of the supply chain, pharmacists and other staff at care and treatment sites like this one in Botswana dispense lifesaving medicines to patients. Photo credit: Ulf Newmark
16. Although doctors, nurses, and other public health workers are the more public face of efforts to treat people with HIV/AIDS, the people who buy, ship, warehouse, and distribute public health commodities play equally critical roles in saving lives. Their tools, instead of syringes and stethoscopes, are storehouses, forklifts, and spreadsheets. At the end of a very long and complex supply chain is the patient who relies on their work to ensure their medicines are there when they need them. Photo credit: Jacques Augustin

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Field Advisory January 04, 2012: View the PEPFAR Field Advisory on Recall of Certain HIV Rapid Test Kits

Providing Quality Medicines for People Living with and Affected by HIV/AIDS

Funded by the President’s Emergency Plan for AIDS Relief (PEPFAR) and established in fiscal year 2005, the Supply Chain Management System (SCMS) project is helping host nations increase their capacity for delivering essential lifesaving HIV/AIDS medicines and supplies to people in need of treatment and care. Operating in some of the countries most severely impacted by HIV/AIDS, SCMS works in collaboration with host-country governments and local and global partners; procures essential medicines and supplies at affordable prices; helps strengthen and build reliable, secure and sustainable supply chains systems; and fosters coordination of key stakeholders.

Administered by USAID, the SCMS technical approach centers on:

• Working with and strengthening existing systems, not creating parallel or duplicate systems
• Building local capacity, empowering in-country partners to enhance and develop sustainable and appropriate responses for their own communities
• Delivering quality HIV/AIDS medicines and supplies at the best value by leveraging industry best practices for planning, procurement, storage, and distribution
• Promoting transparency to ensure accurate and timely supply chain information is collected, shared, and used to improve decisionmaking
• Collaborating with in-country and international partners to identify needs, fill gaps, avoid duplication, and share best practices

SCMS offers partners a rapid, regular, and reliable supply by storing forecasted quantities of the most frequently requested essential medicines, HIV test kits, and other products close to the point of use at regional distribution centers (RDCs) in Ghana, Kenya, and South Africa. The RDCs follow commercial best practices to ensure security and quality of the products as well as timely delivery.

By working closely with partners to plan future procurement, pooling orders to buy in bulk, establishing long-term contracts with manufacturers, and purchasing generic alternatives whenever possible, SCMS helps to reduce the price of essential medicines to treat HIV/AIDS.

With offices in 17 countries and more than 300 dedicated staff members around the world, SCMS brings together 16 private sector, nongovernmental, and faith-based organizations that are among the most trusted names in supply chain management and international public health and development.

SCMS Regional Distribution Centers (RDCs): Enabling a Rapid Response

	Map representing three state-of-the-art regional distribution centers in Africa that ensure a rapid and reliable supply of frequently requested items.

Health programs and the people they serve depend on getting the right medicines, in good condition, when they expect them. With state-of-the-art regional distribution centers operating in Ghana, Kenya and South Africa, the most frequently requested essential medicines including antiretrovirals, HIV test kits and other critical health products are closer to HIV/AIDS programs than ever before. This shortens delivery times from many months to between two and four weeks for planned orders. Programs can hold less stock on hand knowing they will receive more frequent replenishment based on their planned requirements.

As at November 2008, 60 percent of all deliveries (by value) were through RDCs. Ninety percent of all ARV deliveries (by value) in the same period were from an RDC (excluding Guyana, Haiti and Vietnam). The continuing success of the SCMS RDCs can be attributed to the design of the RDC logistics model, which is based on sound supply chain principles, accommodating the specific challenges of a large scale program such as PEPFAR. The RDCs are placed close enough to the target countries to allow flexibility and rapid response, yet also to leverage economies of scale across multiple countries. The RDCs were created without USAID capital expense and are accessed on a "pay-as-you-go" activity-based costing model, with SCMS only paying per actual pallets stored. In this way, the SCMS model has been designed to address the high-variance environment in which it operates, while minimizing costs. SCMS supports similar solutions for PEPFAR countries in the Americas and Asia.

Additional Resources

• Three Years of Saving Lives Through Stronger HIV/AIDS Supply Chains [PDF, 2.2MB]
• Read about the Process for USAID Approval of HIV/AIDS Rapid Test Kits and Other Technical Guidance on Rapid Test Kits - 3/05/10 [PDF, 61KB]
• Guidance on USAID “Restricted Commodity” Approval of Pharmaceuticals - January 2013 [PDF, 264KB]
  • GH/OHA/SCMS ADS 312 Pharmaceutical Approval [Excel, 33KB]
• Information on USAID Consolidated List of Approved Antiretrovirals (ARVs) [PDF, 54KB]
• UPDATED: List of Approved HIV/AIDS Rapid Test Kits - 03/30/12 [PDF, 75KB]
• List of Approved ARVs - 05/26/11 [Excel, 68KB]

Related Links

• Case Study: Strengthening the Supply Chain in Guyana - 05/07
[PDF, 88KB]
• PEPFAR Report to Congress on Antiretroviral Drug Procurement [PDF, 624KB]
• Supply Chain Management System (SCMS) Project