health Supply chain management lecture no 1

Warehousing

Epidemic Response

Inventory Replenishment

Supply Chain Resilience

Health Information Systems

Vendor Management

Patient-Centered Care

Supply Chain Coordination

Logistical Efficiency

Multi-tier Supply Chains

1. Lecture 2: Health Systems & the Role of Supply Chains

2. Health System “ A health system consists of all organizations, people, and actions whose primary intent is to promote, restore, or maintain health. ” Explanation : Not just hospitals → includes clinics, pharmacies, community health workers, NGOs, ministries, donors. Covers prevention, treatment, rehabilitation, and palliative care. A health system in Pakistan = hospitals + polio campaigns + drug regulation + donor-funded TB programs. WHO’s Six Building Blocks of a Health System Service Delivery – quality, accessible, safe care. Health Workforce – doctors, nurses, pharmacists, community workers. Health Information Systems – data for decision-making. Access to Essential Medicines, Vaccines, Technologies – reliable supply chains. Health Financing – government budgets, insurance, donor aid. Leadership & Governance – policies, regulation, accountability.

3. Role of Supply Chain in Building Blocks Access to Medicines & Vaccines → supply chain ensures availability. Health Information Systems → LMIS supports stock data & forecasting. Service Delivery → patients cannot be treated without medicines & equipment. Workforce → trained logisticians/pharmacists keep supply chain running. Linking Supply Chain to Service Delivery Good supply chain = good service delivery. Example: Continuous availability of insulin = better diabetes care. Poor supply chain = weak service delivery. Example: Stockouts of antibiotics in rural clinics = untreated infections. Developed vs Developing Country Contexts Developed Countries (e.g., UK, USA) Strong logistics infrastructure. Electronic LMIS & real-time dashboards. Stable financing & multiple suppliers. Developing Countries (e.g., Pakistan, Nigeria) Poor road networks, frequent power cuts. Weak data reporting (manual systems). Stockouts, wastage, counterfeit medicines more common.

4. Role of Medical Products & Technologies in Health Systems 1. Central to Health Outcomes Medical products (medicines, vaccines, diagnostic kits) are at the heart of healthcare delivery. Without them, doctors and nurses cannot provide effective treatment, even if hospitals and staff are available. 2. Medicines, Vaccines & Equipment Only Useful if Available on Time On-time availability is critical: Vaccines must arrive before campaigns begin. Insulin must be stocked daily for diabetics. Surgical equipment must be ready before operations. Delayed supply = treatment failure, patient suffering, or even loss of life. 3. Supply Chain as the Enabler The supply chain ensures that: Right product → correct medicines, vaccines, equipment. Right quantity → neither shortage (stockouts) nor wastage (expired stock). Right condition → maintained quality (e.g., cold chain for vaccines). Right place → products reach hospitals, clinics, rural health centers. Right time → available when needed, especially in emergencies.

5. Health Workforce & Supply Chain Management (SCM ) The health workforce is not only doctors and nurses → it also includes logistics staff, pharmacists, and cold chain managers who ensure medicines and vaccines are available . Without trained workforce in SCM, even the best-designed systems will fail . Key Roles in SCM Pharmacists & Store Managers → manage drug inventory, expiry dates, safe storage. Logisticians & Supply Officers → plan distribution routes, forecast demand, manage warehouses. Cold Chain Managers/Technicians → maintain refrigerators, monitor temperature for vaccines. Community Health Workers → report local stock levels, ensure last-mile delivery. Example – Village Health Worker A lady health worker in rural Pakistan reports stock levels of vaccines after each immunization session. This data flows into the LMIS (logistics management information system). District supply managers then decide when to replenish stock. If this reporting fails → clinic may face stockouts or wastage. Why It Matters Skilled workforce = fewer stockouts, better quality products, reduced wastage. Weak workforce capacity = errors in forecasting, delays in distribution, spoiled vaccines .

6. Health Information Systems & SCM A Health Information System (HIS) collects, analyzes, and uses health data for decision-making. In supply chains, the specialized system is the Logistics Management Information System (LMIS) . Strong HIS/LMIS = better forecasting, fewer stockouts, efficient use of resources . LMIS (Logistics Management Information System) Tracks: stock levels, consumption, expiry dates, orders, shipments. Can be manual (paper-based) or electronic (digital dashboards, apps). Provides visibility across all supply chain levels → from central warehouse to village clinic. Benefits of Real-Time Reporting Reduces stockouts → managers know when to restock before shortages happen. Prevents overstocking & wastage → accurate demand planning. Improves accountability → transparent tracking of medicines & vaccines. Supports emergency response → rapid redeployment of supplies . Example In Pakistan’s Expanded Program on Immunization (EPI-MIS) , district staff use an electronic LMIS to report vaccine stock levels. If a district is overstocked and another faces shortages → central level can reallocate vaccines quickly .

7. Financing & Health Supply Chain Management Financing determines whether medicines, vaccines, and equipment can actually be purchased and delivered. Medicines procurement is usually the largest single expense in most health systems. Without sustainable financing, supply chains face frequent stockouts, donor dependency, and poor service delivery. Sources of Financing in Health SCM Government Budgets Ministry of Health allocates funds for medicines, vaccines, cold chain, and logistics. Example: National immunization programs funded by federal/provincial health budgets. Donor Agencies & NGOs Provide large-scale funding in low-income countries. Examples: Global Fund (HIV, TB, malaria), UNICEF (cold chain equipment). Health Insurance & Social Protection Schemes In developed countries: insurance pays for medicine procurement and distribution. In developing countries: growing role of health insurance (e.g., Sehat Sahulat Card in Pakistan ).

8. Leadership & Governance in Health SCM Leadership & governance = policies, regulations, and oversight that guide how supply chains operate. Ensures transparency, accountability, and quality in medicines, vaccines, and equipment. Strong governance → efficient procurement, safe products, fair distribution . Key Functions in SCM Governance National Drug Regulatory Authorities (NDRAs) Register medicines & vaccines to ensure safety and efficacy. Monitor drug quality (labs, inspections). Prevent circulation of counterfeit or substandard medicines. Policies for Procurement & Distribution Set procurement guidelines (e.g., open tendering, supplier prequalification). Define distribution policies (push vs pull model). Establish cold chain and storage standards. Anti-Corruption & Accountability Prevent bribery in procurement contracts. Transparent supply chain reduces diversion/theft of medicines. Example: Tracking medicines with barcodes reduces risk of corruption .

9. Integration of Supply Chains with Health Systems Health SC can be vertical (disease-specific) or integrated (covering all products under one system). Integration improves efficiency, but vertical chains sometimes respond faster to emergencies. 1. Vertical Supply Chains : Separate supply chains for specific disease programs. Examples: HIV/AIDS drugs, TB medicines, malaria bed nets, polio vaccines. Advantages: High focus and accountability. Quick response in emergencies. Disadvantages: Duplication of effort (multiple warehouses, separate transport). Higher costs. 2. Integrated Supply Chains : One unified system for all medicines, vaccines, and health products. Advantages: Efficient use of resources (shared warehouses, vehicles, staff). Simplified reporting and data systems. Disadvantages : More complex to manage (requires strong governance). Needs strong national financing to sustain .

10. Case Example – Developed Country (Germany ) Germany’s health supply chain is an example of a highly digitized, well-funded, and resilient system. Strong governance and technology ensure medicines and vaccines are rarely out of stock. Key Features of Germany’s Health Supply Chain Highly Digitized System Widespread use of electronic LMIS and digital dashboards. Pharmacies and hospitals connected through real-time data networks. Prescription drugs tracked electronically (reduces misuse & overprescribing). Real-Time Stock Visibility Central monitoring of medicine stocks, expiry dates, and usage trends. Alerts trigger automatic replenishment orders. Example: Hospitals rarely run out of essential medicines because supply is adjusted continuously. Strong Cold Chain for Vaccines National immunization programs supported by modern cold chain systems . Temperature is continuously monitored with data loggers and alarms. Example: During COVID-19, Germany managed distribution of Pfizer vaccines (-70°C) with minimal wastage .

11. Case Example – Developing Country (Nigeria ) Nigeria’s health supply chain reflects challenges common in many low- and middle-income countries. Weak infrastructure, donor dependence, and poor governance often lead to gaps in medicine availability. Key Features of Nigeria’s Health Supply Chain Poor Roads & Transport Infrastructure Medicines and vaccines often delayed in reaching rural areas. High transport costs and long delivery times. Example: During rainy season, some villages become inaccessible. Weak Cold Chain Frequent power outages damage vaccine potency. Shortage of reliable refrigerators and cold boxes. Example: Polio and measles vaccines sometimes wasted due to freezing or overheating. Heavy Donor Reliance Programs like HIV, TB, and Malaria funded mostly by Global Fund, and USAID. Sustainability problem if donor support declines. Frequent Stockouts Essential medicines often out of stock in rural clinics. Patients forced to buy from private pharmacies at higher cost. Weak LMIS = poor data reporting and forecasting .

12. Aspect Germany (Developed) Nigeria (Developing) Infrastructure Excellent transport, modern warehouses Poor roads, weak storage facilities Cold Chain Strong, digital monitoring, reliable power Weak, frequent outages, vaccine wastage Financing Stable, insurance-based, govt-funded Heavy donor reliance, underfunded govt Technology Real-time LMIS, digitized systems Mostly paper-based, limited electronic LMIS Governance Strong regulation (EU/Federal oversight) Weak regulation, corruption issues Stockouts Rare, efficient replenishment Frequent, poor forecasting & distribution Health Outcomes High immunization & patient trust Low coverage, service delivery gaps Comparative Analysis – Germany vs Nigeria

13. Sustainability in Health Systems A sustainable health supply chain balances public health goals with environmental responsibility. Focus on green practices, energy efficiency, and safe waste management . 1. Green Supply Chains Reduce carbon footprint in procurement, transport, and storage. Use local suppliers where possible → reduces transport emissions. Encourage eco-friendly packaging (biodegradable, recyclable). 2 . Energy-Efficient Cold Chain Equipment Vaccines, insulin, and blood require continuous refrigeration → high energy demand. Energy-efficient equipment: Solar-powered refrigerators in rural areas. Smart temperature monitoring → reduces wastage. 3 . Proper Disposal of Expired & Damaged Drugs Expired medicines → dangerous if leaked into the environment or reused illegally. WHO guidelines: High-temperature incineration for hazardous waste. Encapsulation or landfill for non-hazardous expired products. Prevents counterfeit circulation and environmental contamination .

14. Opportunities for Improvement in Health SCM Emerging technologies and innovations can transform health supply chains, especially in low-resource settings . Focus: faster delivery, smarter forecasting, and better information systems . 1. Drone Delivery Used for last-mile delivery in hard-to-reach areas (mountainous, flooded, conflict zones). Example: Rwanda & Ghana use drones ( Zipline ) to deliver blood, vaccines, and essential medicines within 30 minutes. Benefits: Faster response in emergencies, reduced transport barriers. 2. AI Forecasting Artificial Intelligence (AI) can analyze consumption data, disease trends, and seasonality. Improves demand forecasting → fewer stockouts and less wastage. Example: AI predicting malaria medicine needs based on rainfall & outbreak history. 3. Mobile-based LMIS Health workers use mobile apps to report stock levels in real-time. Replaces slow, paper-based reporting. Example: cStock in Malawi — community health workers send SMS reports on stock levels → reduces stockouts by >50 %.

15. Impact of Efficient Supply Chains A strong supply chain is the invisible backbone of the health system . If medicines, vaccines, and equipment are consistently available → service delivery improves, patients trust the system, and health outcomes rise . 1. Better Service Quality Clinics can provide continuous, reliable care. Fewer stockouts mean treatment is always available. Example: Availability of malaria medicines ensures quick treatment → fewer severe cases. 2. Increased Patient Trust When patients find medicines available and free/affordable, they prefer public health facilities. Builds confidence in national health programs. Example: If insulin is always available in government clinics, diabetic patients won’t switch to costly private pharmacies. 3. Improved Health Outcomes Vaccination coverage increases when cold chain and last-mile distribution are reliable. Disease burden decreases because patients receive timely treatment. Example: Polio eradication campaigns succeed only if vaccines reach every child on time . How do you think supply chain efficiency affects whether people use public hospitals vs private pharmacies ?