Bottlenecks in the supply chain at the district commodity management organizations (DCMOs) in Zambia were causing stockouts and inefficient distribution of medicines. A pilot study tested two models - Model A kept storage at the district level while Model B eliminated intermediate storage. Model B performed significantly better with stockout rates decreasing from 40-72% to 1-33% compared to comparison districts. Zambia is now implementing Model B nationally and utilizing regional cross-docking hubs to further reduce bottlenecks and improve "last mile" delivery to health facilities. The new system more efficiently transports pre-packed orders from the central medical stores to hubs and then to facilities, resulting in lower stockout rates.

1. ARV Supply Chain
Component 3
IH722
February 24, 2015
Katie Broecker
Bethany Bryant
Jennifer Johnson
Liz Nerad

2. Bottlenecks occurring at the DCMOs are a major challenge for Zambia
A few challenges faced by Zambia’s supply chain have
been the uncertain availability of commodities,
commodity expiries, and wastage of funds and stock.
These shortcomings have especially impacted the facility
level as they often faced stock out, while commodities are
available at the district and central levels. A significant
cause of these inefficiencies has been the bottlenecking
of commodities at DCMOs. Relying on the centralized
commodity distribution from the DCMOs lead to
suboptimal distribution to health care facilities (HC)
because of:
• inadequate last mile logistics by the DCMOs;
• lack of vehicles able to navigate difficult terrain, lack of
adequate amounts of fuel, and no available truck drivers were
in the region;
• lack of personnel dedicated to distribution, which forced
pharmacists to coordinate distribution in addition to their
official duties;
• lack of a set distribution schedule, which meant commodities
were only distributed when a proper vehicle, sufficient fuel
and a driver were simultaneously available.
The DCMOs were responsible for providing commodities
to 2,000 pharmacies and health facilities throughout
Zambia. These challenges were urgently addressed as
they resulted in direct violation of the Six Rights of Supply
Chain Management.
Difficult Last-Mile Logistics
Bottlenecks Occur at DCMOs
MSL HCDCMO
MSL Hospitals

3. Pilot Study: focusing on improving logistics capacity at the district level and reducing the number of
stockholding points, thereby ensuring better customer service and stock-outs.
Model A: Storage of drugs at district level. Establishes a
commodity planner (CP) whose responsibilities include
coordinating orders from health facilities and stock
management at the district level. Health facilities place
orders to CP. The CP places orders to the MSL. CP
receives stock from MSL and manages district store
room. They also process, picks and packs the stock for
each facility. Monthly, the health facilities receive facility
packages from CP.
Model B: Eliminates intermediate storage of drugs at
district level. These district stores function as a cross-
docking facility. MSL sends shipments pre-packed for
individual health facilities. One advantage of this
model is the potential to reduce pilferage and leakages
because it enables better shipment tracking. Health
facilities place orders directly to MSL. MSL compiles
one customized pack for each health facility delivering
packages to districts. CP receives facility packages
from MSL health facilities with limited storage space
receive shipment twice monthly; health facilities with
adequate storage space receive packages from CP
monthly.
Days of reported
stock outs for the
3 pilot districts.
Model A Model B

4. Regional hubs reduce bottlenecks and improve delivery
As a result of the pilot study, there was a significant increase in
product availability and decrease in stock out rates under both
models. Model B performed significantly better than Model A and
comparison districts. There was a significant decrease in the stock
out rates in Model B districts (from 1-33% vs baseline of 40-72%
stock out) compared to comparison districts (72%). In Model B,
clinics were stocked out an average of 5 days compared to 18 days
in Model A and 29 days in comparison districts. Reporting rates
from district health offices to MSL significantly increased to nearly
100% in Model B districts.
A hub is a stock cross-docking warehouse or transit point which
keeps already pre-packed drugs for a short duration for onward
distribution to the DCMOs and facilities, removing one level from
the supply chain. The cross-docking hub takes on the role
previously played by the DCMO in performing last mile distribution.
The hub does not hold buffer stock nor does it have the mandate
to re-pack commodities.
Zambia is currently implementing Model B districts nationally. The
implementation of the MSL regional hubs decentralizes the
distribution system. These hubs reduce the impact of district level
bottlenecks and provide more vehicles to deliver supplies to SDPs,
allowing for “last mile” distribution. This new regional hub system
allows each health center order to be centrally processed at MSL
and transported to the regional hubs in bulk. The deliveries are
received at the hubs and sent on monthly delivery routes utilizing
smaller MSL vehicles. This results in a more efficient transportation
and distribution network and the cross-docking hub serve as a
regional MSL presence in the community. Currently 3 regional hubs
of the proposed 7 are open and functioning.
Reduction in
stock out
rates of
Model B
districts (light
blue) vs
Comparison
districts (dark
blue)
Regional Cross-Docking Hubs
Model B Reduces Stock-out Rates
MSL
HC
DCMO
Regional
Cross-
Docking
Hub
Hospitals

5. References
• World Bank. World Bank Policy Note: Enhancing Public Supply Chain Management In Zambia [Internet]. Available from: http://www-
wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2012/08/16/000333037_20120816012127/Rendered/PDF/718560
WP0P12520ain0Innovation0final.pdf
• Ministry of Health. The Health Logistics Press. Zambia Ministry of Health [Internet]. 2013 Oct;(17). Available from:
http://deliver.jsi.com/dlvr_content/resources/allpubs/logisticsbriefs/ZM_NewsOct2013.pdf
• Ministry of Health. The Health Logistics Press. Zambia Ministry of Health [Internet]. 2013 Jun;(16). Available from:
http://deliver.jsi.com/dlvr_content/resources/allpubs/logisticsbriefs/ZM_NewsJune2013.pdf
• Aliza Marcus. The Challenge of Ensuring Adequate Stocks of Essential Drugs in Rural Health Clinics [Internet]. World Bank, Human
Development Network; 2010. Available from: http://siteresources.worldbank.org/EXTHDOFFICE/Resources/5485726-
1288802844934/Zambia-Evid-to-Pol.pdf
• ColaLife. Supply Chain Pilot Results | Zambia | May 2010 [Internet]. 2010 May [cited 2015 Feb 23]. Available from:
http://www.slideshare.net/ColaLife/supply-chain-pilot-results-zambia-may-2010
• Livingstone. MSL Regional Cross-docking Strategy- A Case of Choma Hub [Internet]. 2013 Dec. Available from: http://www-
wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2012/08/16/000333037_20120816012127/Rendered/PDF/718560
WP0P12520ain0Innovation0final.pdf
• USAID. Logistics Brief: Improving Access to Malaria Medicines in Zambia [Internet]. USAID; 2011. Available from:
http://deliver.jsi.com/dlvr_content/resources/allpubs/logisticsbriefs/ZM_ImprAccMalaMed.pdf
• Derrick Nyimbili. Lessons Learned: Designing and Implementing the Hybrid Essential Medicines System Strategy to Improve Product
Accessibility in Zambia [Internet]. USAID; 2014. Available from: http://web.ics.purdue.edu/~aiyer/7ghscs_submission_27.pdf
• MSL. Briefing paper on the external verification and evaluation of the Medical Stores Limited (MSL) Choma Regional Cross-Docking Hub
Performance. MSL; 2015.