Standard max-min system
Step 3: Supply Planning
6.4 reviewing and updating the Quantifcation
Quantifcation does not end after you determine the fnal product quantities and costs; it is an ongoing process of monitoring, reviewing, and updating the forecasting data and assumptions; and recalculating the total commodity requirements and costs, as needed. For the quantifcation exercise to be useful and efective, you should review the forecasting assumptions and the supply plan at least every six months; and more frequently for rapidly growing or changing programs. Ideally, the same core team of people who conducted the initial quantifcation should conduct routine updates. Many country programs have instituted a quarterly quantifcation review process for specifc commodity categories. Ongoing monitoring and updating of the quantifcation is critical to keep program managers, donors, and other stakeholders informed on the availability of drugs; is required for timely decisionmaking about product selection, fnancing, and delivery of commodities.
Quantimed software
Quantimed, an electronic tool, helps you calculate the estimated total cost of medicines, supplies, and reagents needed to provide services for your health program. it can be used to determine needs for a single health facility, a national program, or a geographic area. furthermore, Quantimed has a scaling-up function that can calculate pharmaceutical requirements and costs for expanding programs and compare scaling-up scenarios.
for more information about Quantimed, see MsH’s website:
http://www.msh.org/projects/rpmplus/resources/Toolsresources/QeT.cfm
Reviewing and updating the quantifcation includes the following activities:
• reviewing and updating the forecasting data and assumptions
• calculating or recalculating the forecasted consumption (using Quantimed, Excel spreadsheets, or other software)
• updating the stock on hand for each product
• assessing national stock status for each product (based on product consumption and stock levels)
• reviewing and updating shipment delivery schedules to ensure continuous supply and maintain desired stock levels.
Reviewing and updating a national quantifcation in Nigeria
nigeria conducted its frst national-level quantifcation for arV drugs and HiV test kits for 2009–2013. The two primary funders of HiV commodities in nigeria—the President’s emergency Plan for aids relief (PePfar) and the global fund—regularly review the quantifcation.
because of their pooled procurement, PePfar partners instituted quarterly quantifcation reviews.
at these meetings, the working group reviews quarterly logistics management information system (LMis) data and PipeLine shipment data. Quarterly reviews also involve commodity transfers and loans between PePfar-supported programs to avert stockouts or minimize expiries.
for HiV commodities funded by the global fund, quantifcation reviews are conducted every six months.
The main sources of data for the review are bimonthly service delivery point logistics reports from the LMis and PipeLine shipment reports. if patient targets, testing algorithms, or product selection change, the Quantimed database is reviewed and updated.
Quality monitoring of quantifcation
as noted in this chapter, quantifcation is a continuous process that includes regular monitoring and updating. not only is it important to assess the quality of the data and the assumptions used to calculate the initial forecast; but, to assess the accuracy of your forecast, you should go back periodically and compare actual quantities consumed with your forecasted quantities.
because forecasting for public health products is more of an art than a science, actual consumption almost always differs from the forecast consumption. by calculating the mean absolute percent error (MaPe)—the absolute difference between the forecasted and actual values, expressed as a percentage of the actual values—you can monitor error rates. if error rates are high, you should revisit your assumptions and try to improve the quality of your data, so that your revised forecast will better refect actual consumption. Over time and with regular monitoring, you can improve the accuracy of your forecasts and the overall quality of your quantifcations.
Chapter summary
In this chapter, you learned the following:
1. Quantifcation is the process of estimating the total quantities and costs of the products required for a specifc health program, for a future period of time.
2. Quantifcation is a critical supply chain management activity that links information on services and commodities with program policies and plans to estimate the required commodity quantities and costs. Quantifcation is key to informing supply chain decisions on product selection and use, fnancing, procurement, and delivery.
3. The key steps in quantifcation are preparation, forecasting, and supply planning.
4. The results of a quantifcation facilitate the following activities:
• program planning and budgeting
• mobilization and allocation of funding for commodity procurement
• coordination of multiple sources of funding for procurement
• procurement actions on which products to procure, how much to procure, and when to procure
• adjustment of timing of procurements and shipment delivery schedules to ensure a continuous supply while avoiding stockouts and overstocking
• identifcation of and advocacy for other supply chain improvements, such as strengthening data collection and reporting systems, and inventory management procedures.
5. Quantifcation does not end when the fnal product quantities and costs have been determined; it is an ongoing process of monitoring, reviewing, and updating the forecasting data and assumptions and recalculating the total commodity requirements and costs, as needed.
6. To improve the quality of quantifcations, it is important to compare actual quantities consumed with forecasted quantities to assess the accuracy of the forecast. you should revise assumptions and data accordingly to ensure that the revised forecast better refects actual consumption.
• updating the amounts and timing of funding commitments
• recalculating the commodity requirements and costs over time
• estimating and updating funding needs and gaps for procurement.
for more specifc guidance and instructions on how to conduct a quantifcation exercise, see Quantifcation of Health Commodities: A Guide to Forecasting and Supply Planning for Procurement, available at deliver.jsi.com. for more detailed information on quantifcation of different types of health commodities, please see the following complementary documents, also available on the website:
Quantifcation of Health Commodities: ARV Companion Guide, Forecasting ARV Drugs Using the Morbidity Method Quantifcation of Health Commodities: Contraceptive Companion Guide
Quantifcation of Health Commodities: HIV Test Kit Companion Guide, Forecasting Consumption of HIV Test Kits
Quantifcation of Health Commodities: Laboratory Commodities Companion Guide, Forecasting Consumption of Laboratory Supplies.
Objectives
In this chapter, you will learn about the following:
• the procurement process for public health sector systems
• stakeholder involvement in national health product procurement
• common procurement challenges
• procurement manager’s role in supporting effective and effcient health commodity procurement.
Figure 7-1:The Logistics Cycle