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The 5th Global Health Supply Chain Summit
November 14 -16, 2012Kigali, Rwanda
Transport Capacity Building of a Local Private 3PL – Cargo Management Logistics
Phillip Kamutenga
Produced by: Phillip Kamutenga & Bob Steele(RTT)
Background
• Last quarter of 2010, CML subcontracted by JSI to warehouse and distribute malaria and family planning products to all health facilities in Malawi
• These were USG-donated and GF-procured commodities• RDTs were rolled out countrywide about September 2011,
increasing volumes• By September 2011, stored ACT and RDT volumes
increased from about one to three/four months of stock• Starting January 2012, essential medicines kits were added
to the stocks under management, again increasing volumes
Principles & Practices of Modern SCM
1. Alignment
2. Visibility
3. Agility
4. Outsourcing
5. Measurement
6. Capabilities
Local 3PLs usually do not have appetite and/or knowledge to invest in capabilities necessary to adopt these principles and practices. Through painstaking collaboration, technical assistance and investment, a local 3PL can acquire and operationalize these capabilities and build a responsive and successful business with immense growth potential
Focus
1. Transportation & Planning
2. Warehousing
3. Standard Operating Procedures
4. Communication & Coordination
5. Key Performance Indicators & Results
6. Conclusion
No transport dept. 15 trucks 100cbm vehicle volume 80cbm delivered per month Incorrect vehicle size mix No vehicle maintenance
plan Manual routing & scheduling
Transportation & Planning
Transport dept. established 30 trucks 610cbm vehicle volume 600 – 1000cbm delivered per
month Vehicle mix optimized Rigorous maintenance plan Routing & Scheduling
Software (US$50,000) US$60,000 invested per
month, staff & leased vehicles
Sep 2011 Sep 2012
Warehouses basic sheds, no racking All commodities block stacked No Warehouse Management System Management capacity adequate for
volumes managed
Warehousing
Volumes increased x6 Management capacity
compromised More errors in receipts
reports Decision to move storage
function from CML to RTT
Sep 2011 Nov 2011
No SOPs, no reference Avoidable and expensive
mistakes made
Standard Operating Procedures
SOPs developed All drivers & management
trained in relevant SOPs Driver & distribution
checklist Handling PODs Vehicle Security Obtaining Fuel Chain of Custody
Sep 2011 Sep 2012
Ad hoc meetings with no fixed agenda
No KPIs as a basis for reporting Limited interaction CML/JSI relationship
confrontational at times Reporting protocols and chain of
command not observed
Communication & Coordination
CML transport staff housed on same premise with RTT
Weekly operations meetings with pre-set agenda
CML/JSI/RTT have tri-weekly operations meeting
A ‘communication protocol’ established
Highly interactive and collaborative relationship between JSI/RTT/CML
Sep 2011 Sep 2012
Key Performance Indicators & Results
Description Nov 2011 Sept 2012
Vehicle utilisation (use of fleet and vehicle space)
Not measured, estimate to have been about 50%
80-90%
On-time delivery Not measured
47% on planned day; 99% within 2 days of plan (Dec 2012 targets: 80% on planned day; 100% within 2 days of plan)
Fuel consumption Not measured Around 5.0 kms/L (target: 6)
Vehicle days lost
Not measured, but significant due to fuel, rain and breakdowns i.e. 20 per month
Currently zero
Transportation by non-CML vehicles
Not measured Currently reduced to 30% (Target: < 20%)
Conclusion
CML has moved from a warehousing company with some transportation function to become a professional transport organisation– Coping with much higher volumes of work– Utilising KPIs and SOPs– Providing better customer service at a fraction of the time and
lower unit cost For private local 3PLs, there is a need for major investment,
technical assistance and hand-holding if product availability at all health delivery points is to be met consistently
