Inventory Management:
Distribution, ICS, LMIS
Nairobi, 21 February, 2006
Yasmin Chandani
HIV/AIDS Technical Coordinator
Select Elements of the
Logistics System
• Distribution
– Storage
– Transport
• Inventory Control Systems
• Logistics Management Information
System
Basic In-Country Supply Pipeline
Objectives of Distribution
(Storage & Transport)
• Storage: Assures product and packaging quality and
constant availability
• Transport: Assures that products arrive in good
condition, in the right place and at the right time
The less frequent your re-supply, the
greater your storage requirements.
Distribution Considerations
(Storage & Transport)
•
•
•
•
Availability of transportation (vehicles)
Security during transport
Security during storage
Sufficient storage space/capacity (based on
procurement plan and frequency of
deliveries at all levels of the system)
• Short shelf life of products
• Appropriate storage conditions (cool chain)
Distribution Considerations
(Storage & Transport)
• Which transportation system used?
– Pick-up system (facilities collect drugs) or delivery
system (warehouses deliver)
• Is transportation outsourced?
• Do procedures exist to:
– Verify the products shipped and received: type and
quantity,
– Conduct visual inspection for quality assurance,
including expiration dates,
– Complete and sign transaction records/vouchers,
– Store the products, and
– Update stockkeeping records
Objective of Inventory Control
Systems
• The objective of an inventory control system
is to ensure the constant availability of
products, by defining:
– When products should be ordered.
– What quantities of products should be ordered
– How to maintain adequate quantities to meet
demand, while avoiding overstocks and
stockouts
Inventory Control Systems
• Maximum/minimum Inventory Control System are
defined by months of stock
• Systems are designed so stock quantities routinely
fall between the minimum and maximum stock levels
• The minimum stock level includes safety/buffer stock
Any inventory control system (max/min or
other) must take into account safety/buffer
stock
Inventory Control Considerations
• Who decides what quantities to distribute?
– The lower level (pull) or the upper level (push)?
– Decision should be based on training and human
resource implications
• Which type of max/min system to use?
• How long should the pipeline be?
– Longer pipeline reduces likelihood of stockouts
(more security stock) but increases likelihood of
wastage (short shelf lives, increased expiries)
• How to include safety stock levels in a nonmax/min system
Objective of Logistics
Management Information System
(LMIS)
• The objective of an LMIS is to provide the data and
information needed for decision-making at all levels:
– Health Center Level: e.g, quantities to order, monitor stock
availability
– National Level: e.g, quantities to procure, re-supply
schedule
• The LMIS:
– Is a key component of any logistics system,
– Impacts ordering, forecasting, procurement
– Provides data to facilitate logistics decision-making
LMIS Considerations
• What data to collect
– Only collect data in LMIS that is useful for
decision-making in the area of commodity
management
• Data collection tools
– Daily records to capture data
– Monthly/quarterly reports
– Consistent reports (format, content)
– Computerized system or not
LMIS Considerations
• Regardless of product, always collect the
three essential logistics data items:
– Consumption
– Stock on hand
– Losses and adjustments
• For other products:
– ARV Drugs: number of patients by treatment
regimen
– HIV Tests: number of tests by purpose of use
Common Challenges
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Insufficient storage space
Inappropriate storage conditions
Insufficient transportation resources
Different reporting systems in place at same facility
(by donor, by program)
• No established logistics data collection and
reporting systems from SDP to central level
• Drug supply is driving prescribing and dispensing
• Need for drug storage at home (pediatric
formulations)
Dynamic Environment
• Rapid expansion of programs
• Growing experience  program strategies and
policies continuously evolving
• Highly politicized
• New technologies for drugs and tests
• Decentralized systems
• Integrated vs vertical service delivery
• Multiple donors/sources of funding