Logistic management system in Nepal

1. LOGISTIC MANAGEMENT
BY: PRAKASH GHIMIRE
LECTURER
M.SC. PUBLIC HEALTH (EPIDEMIOLOGY)
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5.  The term ‘Logistic’ originated in a military context, referring to how
personnel acquire, transport and store supplies and equipments.
 Logistic is the process of planning, implementing, and controlling the
efficient, effective flow and storage of goods, services and related
information from point of origin to point of consumption in order to
meet customer requirements.
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6.  Logistic means having the right thing, at the right place, at the right time.
 Logistic management involves technical, managerial, and administrative
process of health service delivery (commodities, essential medicines,
vaccines, commodities, medical equipments, instruments, HMIS/LMIS
forms/formats/registers and other materials) from initial production to
final utilization.
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7. Function of logistic management
 It makes plan for the efficient management of health care logistics activities
required for health care delivery.
 It develops tender documents as per government rules and regulations and
procure essential services.
 It stores, repackaging, and distributes essential logistics.
 It provides printing and distribution of HMIS/LMIS forms and ledger books
to the health institutions.
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8.  It maintains the biomedical equipments, machineries, and
transportation vehicles.
 It implements and monitor community drug program.
 It implements and monitors pull system of essential drugs and
commodities.
 It coordinates with all development partners supporting health care
logistics and drug scheme activities.
 It expands and constructs the storage facilities to maintain the store
standard.
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9. SIX rights of logistic management
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• the Right Goods
• in the Right Quantity
• in the Right Condition
• to the Right Place
• at the Right Time
• for the Right Cost

10.  Logistic Management Division (LMD) has been established under
department of health services in 2050/51 (1993), with a network of
central and five regional medical stores, and seventy-five district level
stores for strengthening supply chain management with evidence
based decision making using the analysis of Logistics Management
Information System(LMIS) data and Inventory Management System.
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11.  In the federal context logistic management section in DoHS, 6
Provincial Health Logistic Management Center (PHLMC), one
logistic management section in Karnali province,77 Health Office,
753 Local Government (Health Unit) and 6934 Service Delivery
Points are functioning for health service delivery
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16. LMIS in Nepal
 Prior to 1993, Nepal had a vertical logistic system, with separate systems for each
health program.
 No logistic curricula, no trained staff, no information system no long-term
commitment at any level.
 In course of implementing logistic system improvement activities, LMIS unit was
established under LMD in 1994 and LMIS expanded nationwide in 1997.
 Logistic Management Division (current Logistic management section) has
responsibility for a well-functioning LMIS
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17.  A Logistic Management Information System (LMIS) is a system of records
and reports whether paper-based or electronic used to aggregate, analyze,
validate and display data (from all levels of the logistic system) that can be
used to make logistics decisions and manage the supply chain.
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18.  LMIS unit collects and analyses on trimester basis (three monthly) LMIS reports
from all the health facilities across the country; prepares report and disseminates to:
- estimate annual requirements of program commodities including contraceptives,
vaccines, and essential drugs.
- help to make demand and ensure supply of drugs, vaccines, contraceptive,
essential medical supplies at all levels; and
- quarterly monitor the national pipeline and stock level of key health commodities.
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Major Functions of LMIS

19.  LMIS is an integrated system and includes commodities for nine different programs as
follows:
1. Family planning (7 commodities; 6 contraceptives and one inserter)
2. Expanded program on immunization (8 vaccines plus immunological agents)
3. Malaria/Kala-azar program (three malaria drugs)
4. Tuberculosis program (10 commodities; TB 8 drugs, glass slide and sputum container)
5. Control of Diarrheal Disease (CDD) program ORS and zinc sulphate)
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20. 6. Acute Respiratory Infection (ARI) program (2 commodities; cotrimoxazole tablet
and suspension)
7. Nutrition program (vitamin A, Iron tablets, and albendazole)
8. Leprosy programs (four leprosy drugs)
9. Essential drugs (56 standard plus other essential drugs)
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22.  The logistic management information flows from peripheral level to the higher level.
Feedbacks are sent to the lower levels from higher levels
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Central Stores Pathalaiya Store
HPs
PHCs
Health Office
Program Divisions
PHDs
Hospitals
Logistic management section
PHLMCs
LMIS Unit
NGOs
Flow of Feedback Report
Flow of LMIS Forms
Donor Agencies
Municipality/ Rural Municipality

23. LMIS reporting system
• Reporting should be done trimester basis (three monthly).
• Reporting in Shrawan, Kartik, Magh, Baisakh
• Reporting schedule
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Organization Schedule
HP/PHCc/Hospital to
municipality/health office
7th of Shrawan, Kartik, Magh, Baisakh
Health office to proivince 15th of Shrawan, kartik, Magh, Baiskah

24. • With the financial assistance from UNFPA and technical from NFHP, LMD developed
a web based LMIS and inventory system for RH equipment in 2008.
• Later implemented nationwide in 2009 including regional medical stores.
• Districts and regional medical stores enter the logistic data online every month and
center can have real time data on stock status of key health commodities and make
supply decision.
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25. Benefits of LMIS
LMIS provides a flow of complete, accurate, and timely data can help health
program managers to improve their system by:
- Reducing commodity costs.
- Enhancing program management
- Informing policy makers by providing decision making data
- Providing better and more consistent customer service
- Allowing greater control of logistics flows and accountability of donated
logistics.
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26. LMIS forms to record and reporting
 Purchase requisition form “Karid Adesh faram” - 45
 Goods entry report “Dakhila pratibedan” - 46
 Non-consumable goods Ledger “Kharcha Nahune jinshi Khata” - 47
 Transfer form “Hastantaran faram” - 48
 Material Inspection Form “Jinsi nirichyyan faram” - 49
 Deduction Report “Minaha pratibedan” - 50
 Demand form “maag faram” - 51
 Consumable goods Ledger “Kharcha hune jinshi Khata” - 52
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27.  Goods Entry Memo (Dakhila Tippani) – 53
 Goods sanction Memo (Nikasa Tippani) – 54
 Transfer Book Issuing Office (Bahal gari Dine Kitab) - 55
 Transfer Book Receiving Office (Bahal gari Line Kitab)- 56
 Stock Annual Description “Jinsi maujdad ko barshik bibaran” - 57
 “Sahayak jinsi khata”
 Peronal “byaktigat khata
 Three monthly “traimasik LMIS pratibedan
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32. LOGISTIC CYCLE
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33.  Over the years experts have developed a logistics cycle that describes the activities
of a logistics system.
 Components of logistic management or cycle or system are:
1. Serving customers
2. Production selection
3. Forecasting and procurement
4. Inventory management; storage and distribution
5. Logistic Management Information System (LMIS)
6. Quality monitoring
7. Policy and Adaptability
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35. 1. Serving Customers
 Each person who work in logistics must remember that he or she selects, procures, stores, or
distributes products to meet customer needs.
 For example, a storekeeper does not store drugs simply for the purpose of storing them; he or she
stores and provided products for customers as needed.
 For some items, customers may be willing to accept a substitute when the first choice is not
available.
 While a retail business may fulfill most but not all of the six rights and still provide acceptable
customer service, a health system must fulfill all six rights.
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36. 2. Product selection
 In any logistics system, product selection is crucial.
 In a health logistics system, product selection may be the responsibility of a
national formulary and therapeutics committee, pharmaceutical board, board of
physicians, or others government-appointed group.
 Most countries have developed lists of essential drugs based on World Health
Organization recommendations.
 The designated board’s ability to select specific products is influenced by other
elements of logistics cycle.
 The most important of these elements is the budget available to purchase the
chosen products.
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37. 3. Forecasting and Procurement
 After product selection, managers of the logistic cycle must determine and
procure the quantity required of each product.
 The forecasting process focuses on estimating the quantities of the specific
commodities that will be needed for a specified time period.
 The nationally available drugs and commodities in small amount are procured
through national bidding whereas large quantities of drugs and commodities are
procured through international bidding.
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38.  The rules for tender have also been laid out in the citizen charter which has to display
by every government organization. The process is of twofold:
i) Sealed quotation ii) Sealed tender
 Drugs worth less than one lakh are bought through quotation and above one lakh
through tender. The companies and the drugs should be registered with the Department
of Drug Administration (DDA) and have WHO-GMP certified.
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39.  The major constraint of the procurement process is its lengthy procedure which may
result in delay supply of drugs in the health facilities.
 Drug procurement Guidelines:
- Procure from WHO GMP certified company
- At least 18 months of expiry date or two third of total expiry date.
- Item-wise bidding and no packaging
- Quantity specified for each item must be tendered.
- Estimated price of drug for: Mountain (average Maximum Retail Price)
Hill (15% < average maximum retail price)
Terai (20% < average maximum retail price)
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40.  Procurement mechanism
- Pull and Push system
- Community drug programme
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41.  Community Drug Programme (CDP)
• CDP was introduced in 1995 with objective to increase the utilization and efficiency
of health facilities to the point where its own financing together with the government
contribution can meet total financing needs including the cost of essential drugs.
• It was supported by UNICEF, SWISS Development Corporation (SDC), GTZ and
some financial assistance by World Bank.
• But now it has been replaced by free health service.
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42. 4. Inventory management; Storage and distribution
 After the items are procured they need to be stored until the customer needs it.
 Almost all organizations store a quantity of stock for future needs.
 Determining how much stock should be stored is an important decision. (ASL and
EOP)
 Storage
- Central warehouse (Logistic management Section, Teku and Pathlaiya
- Provincial logistic management center (in 7 provinces)
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43.  Distribution
The drugs and commodities needed to be distributed to the health facilities as per
their need and demand.
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Central store Province store Health Office Health facilities
INGO Health Office Health Facilities
Health Office Health Facilities
INGO/NGO Health Facilities
Pull system Push
system

44.  Push system
• Push system is a distribution system in which the higher-level facility decides what
health commodities to push through the supply chain, how much to push, and where and
when to push in the supply chain
• Prior to 2003, the MOHP relied entirely on a push system to allocate health commodities
based on historical consumption pattern.
• Although push system grew more sophisticated over the years; it couldn’t accommodate
any significant increase in demand such as epidemics and frequent drugs that were not in
high demand would expire and become wasted. Therefore pull system was implemented
to overcome these constraints but push system is still in practice.
• In this system, LMD is responsible for all purchase and supply of equipments, essential
drugs, contraceptives and vaccines to all government health facilities.
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45.  Pull system
• Pull system is a distribution system in which each lower level facility pulls essential
health commodities through the supply chain by requisitioning (ordering) the required
quantity at the time the essential health commodities are needed.
• Pull system is a demand based system for ensuring the reliable availability of health
commodities at all service delivery points within a health system.
• In 2003, MOHP designed a new ‘push-pull system’ and in 2062/63 the pull system was
introduced in six districts and implemented over all 75 districts in 2066/67.
• It makes sub-district distribution system cost-effective.
• It helped to empower field level health workers because of decentralizing logistics
decision making.
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46. 5. Logistic management information system
 Logistic Management Information System is at the heart of cycle.
 Information should drive the logistic cycle.
 Without LMIS, system would not able to run smoothly.
 Managers gather information about each activity in the system and analyze that
information to coordinate future actions. Example; they gather information about
inventory levels and consumption in order to know how much more of a product to
procure.
 LMIS is also required for organizing and staffing of manpower, budgeting,
supervision and evaluation.
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47.  LMIS helps personnel to collect and manage the information necessary to support
sound decision making in managing the supply chain.
 It consists of all forms and documentation used to maintain records and produce
reports on the logistics system.
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48. 6. Quality monitoring
 Quality monitoring occurs between each activity of the logistics cycle.
 Referring not only to the quality of the product but also to the quality of the logistics
cycle.
 Quality monitoring is important for the following reasons:
- To monitor the quality of procurement decisions.
- To monitor procured products.
- To monitor quality while products are stored and distributed (before it reach to
customers; to check right condition while they made available to customers).
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49. - To follow up quality monitoring even after products are distributed to customers.
- Feedback should be collected on how customers feel about the quality of products or
services they receive and whether they are satisfied with the service.
- Quality monitoring of both product and service is critical to the success of efforts to
promote the use of products.
- The results of monitoring customer satisfaction can be used to inform decision makers
about what products to select in the next procurement cycle.
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50. 7. Logistic Environment: Policies and Adaptability
 In addition to the components of the logistic cycle, two outside forces; policies and
adaptability have strong influence on the logistic system.
 Government regulations and procedures affect all elements of the logistics system.
 Adaptability is logistics system’s ability to obtain internal or external resources that
are necessary to address changes in demand.
 Logistic managers often depend on a larger system, such as the government, to
provide inputs.
 When managers do not control inputs, adaptability becomes more challenging.
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51.  Money is one of the most important resources in a logistic system.
 For example, as demand increases, the logistics system needs more money to pay for
fuel for extra deliveries, hire new warehouse workers, and train clinic personnel.
 The logistics systems ability to meet these needs-its adaptability- will have an impact
on its ability to meet customer needs.
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52. Describe the components of logistic management.
send your assignment to prakash.ghimire707@gmail.com
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53. Thank
You
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