Inventory Management:

Distribution, ICS, LMIS

Nairobi, 21 February, 2006

Yasmin Chandani
HIV/AIDS Technical Coordinator
Select Elements of the
Logistics System

Distribution
Storage
Transport
Inventory Control Systems
Logistics Management Information
System
Basic In-Country Supply Pipeline
Objectives of Distribution
(Storage & Transport)

Storage: Assures product and packaging quality and

constant availability
Transport: Assures that products arrive in good
condition, in the right place and at the right time

The less frequent your re-supply, the

greater your storage requirements.
Distribution Considerations
(Storage & Transport)
Availability of transportation (vehicles)
Security during transport
Security during storage
Sufficient storage space/capacity (based on
procurement plan and frequency of
deliveries at all levels of the system)
Short shelf life of products
Appropriate storage conditions (cool chain)
Distribution Considerations
(Storage & Transport)
Which transportation system used?
Pick-up system (facilities collect drugs) or delivery
system (warehouses deliver)
Is transportation outsourced?
Do procedures exist to:
Verify the products shipped and received: type and
quantity,
Conduct visual inspection for quality assurance,
including expiration dates,
Complete and sign transaction records/vouchers,
Store the products, and
Update stockkeeping records
Objective of Inventory Control
Systems
The objective of an inventory control system
is to ensure the constant availability of
products, by defining:
When products should be ordered.
What quantities of products should be ordered
How to maintain adequate quantities to meet
demand, while avoiding overstocks and
stockouts
Inventory Control Systems

Maximum/minimum Inventory Control System are

defined by months of stock
Systems are designed so stock quantities routinely
fall between the minimum and maximum stock levels
The minimum stock level includes safety/buffer stock

Any inventory control system (max/min or

other) must take into account safety/buffer
stock
Inventory Control
Considerations
Who decides what quantities to distribute?
The lower level (pull) or the upper level (push)?
Decision should be based on training and human
resource implications
Which type of max/min system to use?
How long should the pipeline be?
Longer pipeline reduces likelihood of stockouts
(more security stock) but increases likelihood of
wastage (short shelf lives, increased expiries)
How to include safety stock levels in a non-
max/min system
Objective of Logistics
Management Information
System (LMIS)
The objective of an LMIS is to provide the data and
information needed for decision-making at all levels:
Health Center Level: e.g, quantities to order, monitor stock
availability
National Level: e.g, quantities to procure, re-supply
schedule

The LMIS:
Is a key component of any logistics system,
Impacts ordering, forecasting, procurement
Provides data to facilitate logistics decision-making
LMIS Considerations

What data to collect

Only collect data in LMIS that is useful for
decision-making in the area of commodity
management

Data collection tools

Daily records to capture data
Monthly/quarterly reports
Consistent reports (format, content)
Computerized system or not
LMIS Considerations

Regardless of product, always collect the

three essential logistics data items:
Consumption
Stock on hand
Losses and adjustments
For other products:
ARV Drugs: number of patients by treatment
regimen
HIV Tests: number of tests by purpose of use
Common Challenges

Insufficient storage space

Inappropriate storage conditions
Insufficient transportation resources
Different reporting systems in place at same facility
(by donor, by program)
No established logistics data collection and
reporting systems from SDP to central level
Drug supply is driving prescribing and dispensing
Need for drug storage at home (pediatric
formulations)
Dynamic Environment

Rapid expansion of programs

Growing experience program strategies and
policies continuously evolving
Highly politicized
New technologies for drugs and tests
Decentralized systems
Integrated vs vertical service delivery
Multiple donors/sources of funding