Zambia

This section shares examples drawn from a combination of desktop research and interviews of outsourcing to private sector partners.

i. Medical stores management: Crown Agents Context Crown Agents partnered with the Government of Zambia from 2004 to 2013, by being placed in control of the management of the medical stores. Crown Agents is an international company who provide capacity building and institutional development services in procurement, public financial management, revenue enhancement, governance, and expenditure management. They work for the public and private sectors in more than a hundred countries, as well as for international development agencies and institutions.

Outcomes and benefits Crown Agents successfully led the development of new supply system and network of hubs. In 2004, Crown agents were given control of MSL. Crown Agents identified areas that required urgent attention – infrastructure rehabilitation, development of new packaging system, packing system, construction of more suitable storage and administrative facilities, computerising of the management system. They also highlighted the need to improve the performance and reliability of the delivery service while improving data transparency with their clients (i.e. stock levels, order timings etc.). Crown Agents’ impact resulted in the reduction of distribution costs by 32%, improved on-time delivery rates (increased to 95%) and the doubling of stock availability at the central level. These improvements were supported through capital investments from donors and management reforms. ii. Outsourced distribution of health products - Third-Party Logistics Services Context The Medical Stores Limited, with support from USAID, set up third-party logistics (3PL) services for general medicines to deliver to the MSL cross-docking hubs, see Figure 1. These 3PL contracts were set and managed by John Snow Incorporated (JSI). Deliveries from hubs to health facilities were carried out by MSL using its own dedicated vehicles.

Outcomes and benefits The 3PL distributors performed within the key performance indicators stated within the contractual agreement – sufficient rates of on-time deliveries and successful deliveries. As a result of the successful performance by the 3PLs, at the end of 2016, the 3PL contracts were extended to cover last mile delivery to referral hospitals at province and district levels. iii. Outsourced time critical temperature controlled requirement Context MSL need to move short shelf life laboratory reagent products under temperature-controlled conditions. MSL has an in-house cold chain capability for vaccines but the monthly MSL schedule is not able to move them within the required timeframe. As a result, JSI and MSL have contracted with several private sector LSPs to provide this service. Outcomes and benefits Lechwe Express brings relevant expertise and skills for the transport of reagent products. Lechwe Express has a good network in Zambia, a range of temperature-controlled vehicle types and experience in dealing with pharmaceuticals. They use an electronic USB data logger, which captures temperature data every few minutes and provides an audit trail which is reviewed by JSI prior to issuing payment. To date, there have been no significant failures in terms of product integrity or late delivery. iv. The essential medicines logistics improvement program: JSI Context In Zambia, healthcare facilities have experienced high rates of stock-outs. Between 2009 and 2013, the Ministry of Health, with the support from the World Bank, developed the Essential Medicines Logistics Improvement Programme (EMLIP) which later was piloted with the support from USAID, through its implementer, JSI. It is a manual pull re-supply system whereby each individual health facility sends routine monthly consumption data to MSL. Outcomes and benefits Following the initial rollout to 27 districts, central stock-outs were reduced from c.50% in 2012 to c.28% in 2013 (USAID, 2014). Using this information, MSL now picks and packs for each individual facility, rather than at the district level. With the re-development of the MSL warehouse stock holding and management system carried out with support from UNPD/ TGF, USAID, and the EU, most of the operations are automated requiring reduced human intervention.