You know that the purpose of your logistics system is to provide good customer service by ensuring the six rights and ensuring that commodities are available. You should design your logistics system to achieve these goals. When you design your logistics system, you want to ensure that the system is as efective and as efcient as possible. If your logistics system is efective, it will produce the results that you want:
products will be available when and where your customers need them. If your logistics system is efcient, then you can achieve your purpose with a minimum use of resources; including money, time, and efort.
For example, a logistics system can be very efective, but it is inefcient if products reach their destination at a high cost, or through a great deal of efort. On the other hand, a logistics system may be efcient, but it is not efective if warehouse staf process a large number of orders in a short time, but make many mistakes. Your goal is to design an efective system that is as efcient as possible.
One challenge in designing a logistics system is to determine the resources that will be required at which levels of the system and to achieve what purpose. Imagine a situation where the system designers decide that district pharmacies will pick up their commodities from the region because the regional warehouses do not have enough vehicles or drivers available to manage delivery routes. However, if districts do not have the vehicle and manpower needed to pick up their commodity orders, then the products will not move from the region to the district. Someone must provide the resources for the products to move between the levels of the system.
When designing and implementing a logistics system that will achieve the six rights and ensure customer service, an ultimate goal should be to minimize the overall cost of commodity management, not to push fnancial responsibility further down the system—unless the lower-level facilities have the resources needed.
Table 10-1 summarizes some of the implications related to various design decisions. When designing the logistics system, the system designers should select the options that are best for the country, based on the characteristics of the country, the commodities being managed, and the type of health programs served by the system.
Table 10-1: Summary of Implications of System Design Decisions dESign ChOiCE/dECiSiOn iMPLiCaTiOnS
Shorter review period (e.g., monthly)
reports flled out more often; vehicles have more frequent schedule;
service personnel take time away from client consultations more often; or dedicated logistics personnel are available to do the frequent reporting and related tasks (physical inventory, etc.); have lower max-min stock levels; less storage required, less potential waste, fewer funds tied up in inventory.
Longer review period (e.g., quarterly)
reports flled out less often; higher max-min stock levels; more funding tied up in inventory; more space needed for storage; larger vehicles needed for commodity transport; have system capacity to manage larger quantities of products; relatively stable consumption rates.
Allocation (push) system Lower-level personnel must submit reports to enable the higher-level personnel to accurately determine resupply requirements; the more facilities at the lower level, the more time required at the higher level to determine resupply requirements; higher-level personnel will make decisions based on actual data and will not need to ration or dump products.
Requisition (pull) system Lower-level staff need time to calculate reorder quantities, which means less time for serving clients (if service personnel perform logistics responsibilities); lower-level staff can be trained to do the calculations;
fewer staff at lower level means less time to train all staff.
higher-level facility delivers commodities to lower level
Lower-level staff can focus on serving customers and not on collecting goods; higher-level facilities have vehicles and related resources (fuel, drivers) available for commodity deliveries when needed; vehicles are not taken for other more important purposes.
Lower-level facilities pick up commodities from supplier
Lower-level facilities have vehicles and related resources (fuel, drivers) available for commodity pickups when they are needed;
vehicles not taken for other more important purposes; resupply facility will be open for business when the facility vehicle arrives.
in-house management of system component (e.g., transportation)
government/MOh has resources needed to procure vehicles and maintain vehicles in good working order; drivers are available;
vehicles are available when needed for transport of commodities; staff has skills to develop and implement a schedule.
Management of system component outsourced to a contractor (e.g., transportation)
in-house personnel must be available to monitor contractor performance and take corrective action, as needed; skills exist for developing a service-based contract.
Collect and report actual dispensed-to-user data
Service providers accurately maintain dispensing registers for all products; service providers report data for aggregation; service providers spend time managing data instead of serving clients;
collection of consumption data within the facility can be time-consuming, especially if many wards/units use the same products.
use of lowest-level issues data
as a proxy for consumption all required data is located in the facility storeroom; accurate issues data is available from one level up from the SdP; facility staff do not spend time completing dispensing registers, or aggregating data from registers for LMiS report.
Chapter Summary
In this chapter, you learned the following:
1. The steps in the system design process are to do the following:
• Complete an assessment and identify the need to design/redesign a system.
• Plan and conduct the system design activity.
• implement the system.
• Monitor the system.
2. key elements of a system design include the—
• pipeline (the fow of commodities and information)
• LMiS (for more information, see chapter 2)
• inventory control system (for more information, see chapter 4)
• storage and distribution (for more information, see chapter 8)
• defned roles and responsibilities.
3. important decisions/steps taken during the design of a system include—
• Which products will be managed in which systems?
• Should you directly manage the logistics functions or outsource them to a third party through a contract mechanism?
• after drafting the design, look at the system as a whole and verify that all parts will work together and interact, as designed.address any potential problems through redesign before the system is fully implemented.
• document your assumptions and verify that they are reasonable to increase the system’s likelihood of success.
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