04. supply planning

supply planning

1. Principles of Stock monitoring & Supply planning Dr. moe kyaw kyaw GHSC- psm , MYANMAR MARCH, 2017

2. Purpose of Supply Planning To Ensure continuous availability of products To prevent stock excess , expiry and shortages To maintain stock levels between established maximum and minimum levels ( Optimum Stock ) To manage storage To coordinate the timing of funding disbursements with procurement lead times and supplier delivery schedules

3. Summary of data needed for supply planning Consumption (end-user consumption) Procurement period Expected arrival date: shipment schedules by supplier Lead times : planning to ordering, ordering to shipping, shipping to arrival, arrival to receiving Stocks on hand (SOH) Adjustments : expiries and other adjustments Established minimum and maximum stock levels Prices Freight and logistics costs 3

4. Months of supply Looks at current stock quantity in terms of how long it would last at current (forecast) consumption rate Examples: 4   Current Stock Product A 1,000 Product B 1,000 Product C 1,000 Stock on Hand AMC Months of Stock on Hand = AMC 100 500 1,200 Months of Supply 10 2 0.8

5. Min/Max stock levels Maximum stock level : the level of stock above which inventory should not rise under normal circumstances. Expiratory Storage problem Minimum stock level : the level of stock at which actions to replenish inventory should occur under normal circumstances Safety stock (buffer) - considered for delayed deliveries, significantly increased consumption, or other unexpected events Lead time : the level of stock that would be used between the time an order is placed and the new stock received and available for use 5

6. Establish Minimum Stock Level Min stock level (S MIN ) = LT + SS S MIN = Minimum stock level, in months LT = Lead time (total), in months SS = Safety stock = LT in months 6

7. Establish Maximum Stock Level Max stock level (S MAX ) = S MIN + PP S MAX = Maximum stock level, in months S MIN = Minimum stock level, in months PP = Procurement/ Forecasting period 7

8. Example: Ideal Situation 8 Levels Procurement Period (month) Lead Time (month) Safety stock (month) Min (month) Max (month) Central 12 8 8 16 28 Regional 6 1 1 2 8 H. Facility 1 0.5 0.5 1 2

9. Supply Planning parameters (example) Chloroquine 250 mg base (phosphate), 1,000 tablet bottle Programme/facility Minimum stock level 4 months Maximum stock level 9 months Stock at 1 January 2014 10,000 units Forecast consumption 2014  1,000 units/month 2015  1,100 units/month 9

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13. Estimating total lead time (Example) Activity Number of months Plan to order -----------------------------------> 2 Estimate quantity, Prepare documentation Obtain authority to order, Manage tender Order to shipment ----------------------> 3 - Vendor manufactures - Quality testing Shipment to receipt -------------------------> 1 - Transit from vendor to hospital - Storeroom receipt Total lead time = 6 months 13

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15. Inputs: Transactions STOCK 1. Shipments 3. Stock Adjustments Inventory Control System Facilities (warehouses & SDPs) + - + - 2. Consumption

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