07-08-2014 Read More >>
PROCUREMENT FOR SUPPLY CHAIN
Definition: Procurement is the process of turning forecasts and supply plans into purchased products that are delivered to a point of entry. Typically divided into several steps, procurement focuses mainly on the management of the tendering, bidding, and contracting process. The length of the procurement process for new goods varries significantly and, in many cases, may take more than one year from start to finish.
What is the problem?
Procuring life-saving reproductive, maternal, newborn and child health commodities is the first step to make them available to end users. When countries do not have the local capacity to produce quality essential commodities, procurement relies on the satisfaction of in-country commodity needs through the combination of both global and local procurement strategies. But countries struggle with a variety of procurement challenges such as (a) a lack of coordination and communication among the multiple entities and donors involved in the procurement process; (b) lack of alignment between donor or governmental funding mechanisms and the procurement schedules for the recipient country or program; and (c) limited resources and bureaucratic constraints. Ultimately, these challenges lead to inefficient, expensive, and untimely procurement of commodities and affect the ability of programs and service delivery points to provide effective health care.
To respond to these procurement challenges, the Supply Chain Technical Resource Team (TRT) has compiled several promising practices as examples of how the procurement process may be improved: Read the full Procurement brief here.
Indicators to measure progress in procurement
♦ The recommended performance indicator for procurement is the percentage of life-saving commodities procured through framework contracts or through a pooled-procurement mechanism. ♦ Additional indicators are:
- ♦ The percentage of each vendor’s expected orders that were delivered on time and in full
- ♦ The average lead time for contract/purchase order issue
- ♦ The average number of days between purchase order issue and vendor acceptance
- ♦ The average number of days between product arrival in port/airport and arrival in warehouse (customs clearance cycle) for the life-saving commodities
- ♦ The percentage of planned quantities that were received
- ♦ The average unit cost of each life-saving commodity as percentage of average international reference price
Read the full Supply Chain Performance Indicators Guidance here.
The Supply Chain Technical Resource Team (TRT) supported the development of several guidance documents to support procurement:
- Promising Practices in Procurement brief to advocate for investment in best practices for human resources for supply chain.
- Guidance and Resources for Inclusion of Reproductive, Maternal, Newborn, and Child Health Commodities in National Commodity Supply Coordination Committees