Better Data Visibility & Data Use Result in Lower Cost and Improved Performance in Medicine Supply Chains

TL;DR

Implementing an electronic logistics management system and dedicated management unit in Tanzania's health supply chains significantly reduced stock-out durations and improved performance, while increasing overall costs but decreasing cost per value of commodities.

Contribution

This study provides empirical evidence on the impact of digital management upgrades on supply chain efficiency and cost-effectiveness in a low-resource setting.

Findings

Stock-out rates decreased from 32% to 23%.

Performance improved from 68% to 77%.

Cost per value of commodities decreased from 58% to 50%.

Abstract

In 2013-2014, Tanzania embarked on a major revamp of the management of its public health supply chains for medicines and other health supplies. These upgrades include the establishment of a national electronic logistics management information system (eLMIS) and the introduction of a Logistics Management Unit (LMU) to use the eLMIS for managing all key public health commodities. This paper describes results from the "round one" evaluation of the impact of those key management upgrades roughly one year after their introduction. The study has three main components: (1) analysis of reporting, data use, management practices, and supply chain outcomes; (2) a cost and cost-effectiveness analysis and (3) a return on investment analysis to measure savings generated by the new systems. The study used a non-experimental pre- and post-design to compare the previous system with the upgraded management system. The quantitative analysis found that stock out rates for all product goods dropped from 32% to 23%, with the frequency of stock-outs greater than 7 days dropping from 24% to 15%. Annual supply chain costs increased from $66million to $76million. Performance improved from the 2014 baseline findings of 68% to 77%, but cost per value of commodities adjusted for performance decreased from 58% at baseline to 50% in year 1.