Supply local procurement

Price information is fundamental in obtaining the best price. Several international and regional price information services are made available for WHO Member States (Table 3). Price information helps price negotiations, in locating new supply sources, and in assessing the efficiency of local procurement. 

The CWS in SWPA was not yet aware, at the end of June, of the War Department supply policy they had heard nothing at all from the United States in the first four months after the establishment of the USAFIA and were to have no word from the Office of the Chief, Chemical Warfare Service, until July. The basic War Department plan was dated 22 January 1942, and the specific plan for the forces in Australia was dated 2 February 1942. The specific War Department plan called for 90 days supply of all classes other than ammunition, computed on the standard tables of basic allowances (TBA) 90 days supply of ground ammunition, computed on the basis of a special ammunition day of supply for weapons in the theater and five months supply of aerial bombs, ammunition, and pyrotechnics, computed according to a special allowance per aircraft in Australia and the Netherlands East Indies. The Adjutant General instructed the technical services in the United States to compute allowances and set up shipments to the San Francisco Port of Embarkation, which was charged with shipment to the theater. The chiefs of the technical services were also charged with allotting funds to the theater for the operation of their services in the theater and for the local procurement of materiel. ... 

As Table 8.1 showed, MEDS was buying a high proportion of their basic essential medicines from local manufacturers. This success in local purchasing reflected a strong capability for local procurement built up over a number of years.In contrast to the Kenyan public wholesaler, MEDS issues only local tenders for medicines and supplies, with no direct importing. Two local tenders a year go only to MEDS s pre-quali-fied supplier pool of local manufactmers and distributors. 

This case study of MEDS suggests some lessons about effective local procurement and supply, working with local suppliers and faith-based facilities. That capability is now being tested, as the decentralization reforms allow counties to switch suppliers, causing demand for MEDS ... 

The state of New York, through its superintendent, bores the wells, procures the supply of brine, and conducts it through logs to the salt works, which are the property of individuals. The localities are leased at a nominal rent, and for an indefinite number of yoars, but are only to be employed for the manufacture of salt. "For tho raw material a tax of one cent per bushel is levied on every buBhel of salt produced. This amounted in 1856 to. fifty-nine thousand nine hundred and forty-six dollars and forty-four cents j the expenses were fifty thousand two hundred and fifty-five dollars and sixty-five cents. 

Federal, State, and Local Governments. Government bodies develop and use standards for many purposes, principally for procurement and regulation. For example, the Environmental Protection Agency sets standards for protection of the environment, the Department of Defense sets standards for procurement in those areas for which voluntary consensus standards do not apply, and the Office of Federal Supply and Services provides specifications for procurement of a host of products from erasers to office furniture. The Congressional Joint Committee on... 

Beside technological problems, there may also arise disturbances due to managerial mistakes. The management of integrated production sites encompasses e.g. decisions about financial means, the staff, and stocks of aU materials relevant for the production processes. Financial disturbances include mis-estimations of prices and costs and may lead to inefficient production or sourcing decisions. Uncertainty of workforce occurs from fluctuations in personnel capacity. Disturbances of material supply can occur from two sources Either the local stocks are inappropriate and/or the procurement and distribution processes do not match the realized requirements, e.g. orders are delivered too late or in the wrong quantity/quality. 

An inventory control of all necessary spares a detailed analysis of the consumption of various spares in the last few years will assist procurement of essential spares in the right quantities. This will enable reduction in the funds blocked for inventory. Long-term relationships may be built with lehable local suppliers of various spares. Lead times (i.e., time required for procuring supplies) for spares to be obtained from outstation vendors may also be looked into and efforts made to minimize. 

Explore possibilities for procuring the supplies from local vendors instead of vendors who may be at considerable distance and therefore need more time for supply. 

A winning procurement strategy for products with high demand variability is to buy globally from fhe lowesf cosf counfry and handle demand variability through "spot purchases" from local sources. This is similar to FlP s portfolio strategy to handle supply risk we discussed in Section 7.7.2. 

Procurement of items must be at the most appropriate level in order to obtain the best value for money while ensuring the quality of the product and the supply chain. This level will vary according to local/national policies. It will include consideration of the most appropriate Stock Turn for the individual items. A Stock Turn is the rate at which a company s goods are sold and replaced. With main fine stock there should be a turnover of around five or six times a year. However in pharmacies there are a number of medicines which require different considerations when applying stock control principals. The medicines in these categories may never be used but it is essential to have them available if needed. Therefore, for these medicines the concept of a Stock Turn will not apply. However, if possible. 

Among the difficulties, TCM enterprises found that the most difficult one is how to properly plan production and manage materials in their supply chain under demand and supply variation. It is also a key to lower the inventory and shorten the delivery time, which will reduce the supply chain cost. At present, the departments in the TCM plant such as inventory, procurement and production process are lack of cooperation and information sharing, each makes their own decisions based on local information available. Poor decision results in poor performance. 

Because of the high supply uncertainty in EE, a fraction of the components may be produced in the ME, and others procured in EE. They are then assembled in the local facility in EE. The finished functional products are sold in EE as well as ME, as shown in Fig. 7.6. 

Additional practical changes that would shift the balance back towards local production include effective implementation by TFDA of their formal commitment to fast tracking of tests and registrations for local products (which may require additional TFDA resources). Providing trade credit for local suppliers to public procurement, as well as to overseas importers, would also rebalance the incentive structure, as would more timely funding by the Ministry of Finance for procurement by MSD of locally contracted supplies. 

Today, local and international procurement for the public health facilities is mainly provided by the PFSA which operates with a revolving fund. PFSA procurement is done through international and local tenders as well as through direct purchasing. The PFSA also receives some pharmaceuticals through donation from sponsors of vertical programmes such as those for ARVs, TB and malaria medication and reproductive health commodities. From its central hub in Addis Ababa and the regional hubs, PFSA distributes medicines and medical supplies directly to health care facilities. Private companies import directly from their respective suppliers and distribute to wholesalers, and these in turn sell to retailers. 

A key determinant of a health sector s capacity to procure and use medicines and other medical supplies effectively, and to develop good local suppliers, is therefore its market structures. These determine how the population s demand for and need for medicines feeds through (or fails to feed through) into wholesale purchasing who are the resultant wholesale buyers of essential supplies what market power those buyers exercise and how they select and distribute supplies. 

For Tanzania, the domestic market size for medicines was estimated at around US 250 million in 2011-12. Of this market, public wholesaler (MSD) sales were aroimd 50% (US 125 million), of which 70% in turn were donor-funded vertical programme sales (MSD, 2013). That leaves just US 37.2 million as government-funded MSD procurement, or 15% of the total market. However, the Ministry of Health and Social Welfare has estimated that only aroimd 30% of the pooled public funds held by public health facilities in accounts at MSD for medicines and medical supplies were locally tax funded, equating to around US 11.3 million, the rest coming from donor basket funds (MoHSW, 2013 4-5). The implication is that just 5% of Tanzanian medicines were tax-funded in 2011-12. 

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