CHAPTER 3. Commodities, Procurement & Supply Chain Considerations

CHAPTER GOALS

To ensure site-level staff are able to do the following:

  • Procure the necessary commodities to provide VMMC services that meet PEPFAR standards within a prescribed time frame.
  • Understand the discrete steps in the procurement process and the resources to assist site managers with completing these steps.
  • Remain aware of steps in the procurement process that are particularly prone to delays due to the reliance on external actors (manufacturers, customs, and importation regulators) so that stock-outs are minimized.

WHAT USERS NEED TO KNOW

Without the appropriate commodities and equipment, VMMC service delivery cannot take place. The required commodities and equipment include pharmaceuticals, surgical instruments, and medical and waste management supplies, to name a few. Site managers must account for and resolve common procurement-related challenges, given limited options for local sourcing of commodities and the complexities of international sourcing. [See PEPFAR Male Circumcision Partners’ Meeting: Commodities and Improved Coordination of Male Circumcision for HIV Prevention]. Because human resource constraints limit staff availability to manage the supply chain for commodities, tools are provided that outline the technical specifications for requisite commodities agreed by the U.S. President’s Emergency Plan for AIDS Relief (PEPFAR) Voluntary Medical Male Circumcision Technical Working Group (VMMC TWG). [See USAID Global Health Supply Chain Program-Procurement and Supply Management (GHSC-PSM) project’s online e-Catalog]. These tools also enable consumption forecasting to ensure adequate stock on hand. [See Quantification, Forecasting, and Monitoring Basic Tool for VMMC]. Site managers, working with implementing partner program managers and procurement officers, are key personnel who prevent and address stockouts, determine how and when to order supplies, and manage the tracking and budgeting of commodities. [See Costing Tool for Public Hospitals—Male Circumcision Model]. There are 10 steps in the procurement process.

Tools are available specifically to assist with step 2 above. [See GHSC-PSM Client Intro Letter and PFSCM Client Toolkit]. Finally, to ensure safety and quality, PEPFAR-supported services should procure commodities that meet U.S. and national government regulatory requirements or can be approved via appropriate agency guidelines such as USAID's Automated Directives System (ADS) 312. [See ADS 312 USAID Pharmaceutical Approval Process].

10 Steps in the Procurement Process

  1. Definition of specifications
  2. Creation of price request and price quote
  3. Approval of price quote
  4. Purchase order/sales order creation
  5. Allowance for vendor lead time (manufacturing time)
  6. Shipping document creation
  7. Customs pre-clearance procedures
  8. Delivery to port of entry
  9. Customs clearance
  10. Local delivery to warehouse.

It is important to conduct a forecasting and supply planning exercise with all partners at the program level. This exercise should include multiple demand scenarios and should occur at least annually with quarterly updates. [See Quantification, Forecasting, and Monitoring Basic Tool for VMMC]. Generally, the forecasting and supply planning exercise is taken on by the chief pharmacist or nurse in collaboration with site managers and procurement officers. Chief pharmacists, nurses, site managers, and procurement officers are also the key personnel who prevent and address stock-outs, determine how and when to order supplies, and manage the tracking and budgeting of commodities. [See Costing Tool for Public Hospitals—Male Circumcision Model]. In addition to the forecast scenarios, the in-country teams should review the supply plans quarterly, given that demand may be seasonal and may change rapidly due to the voluntary nature of the program. PEPFAR works with external partners who are cautiously approved through a competitive bidding process to provide a reliable, cost-effective, and secure supply of products for HIV and AIDS programs in PEPFAR-supported countries. VMMC programs may choose to procure their commodities and supplies using such approved partners.

TOOLS, INSTRUMENTS & GUIDANCE DOCUMENTS

  1. PEPFAR Male Circumcision Partners’ Meeting: Commodities and Improved Coordination of Male Circumcision for HIV Prevention
  2. USAID Global Health Supply Chain Program-Procurement and Supply Management (GHSC-PSM) project’s online e-Catalog
  3. Quantification, Forecasting, and Monitoring Basic Tool for VMMC
  4. Costing Tool for Public Hospitals—Male Circumcision Model
  5. GHSC-PSM Client Intro Letter
  6. PFSCM Client Toolkit
  7. Automated Directives System (ADS) 312 USAID Pharmaceutical Approval Process
  8. GHSC-PSM VMMC Order Sheet

To see charts, graphs, and read additional information, download the chapter PDF.