Chapter two

Developing supply plan

Activity 2.1. Individual Reflection
Instruction: Recall your previous practice

What procedures have you used while developing a

supply plan?
Time allowed: 5 minute
 Formula MOS

MOS is calculated using the following formula

Months of stock (MOS) = stock on hand or order (SOH or SOO)/Average monthly consumption
(AMC)

To compute AMC, at least three to six months of continuous consumption quantity of a product
is needed.
Activity on MOS
 Funding/budget gap analysis

• If sufficient funding is available, the final quantity to procure for each

product will be the same as the quantity to order
• if funding is insufficient, the quantification team will need to determine
whether additional resources can be mobilized
• When it is impossible to mobilize additional resources to procure the full
quantities of products required or the forecasted quantity will need to be
reduced
 Scheduling delivery of ordered pharmaceuticals
all the quantities required might not necessary be delivered at a time for the
reasons;
• Insufficient storage capacity,
• Seasonality of some diseases,
• Available fund covers portion of the required quantity and
• The stock on hand quantity is greater than the set maximum stock level.
 To accompany these, the arrival of products must be scheduled so that medicines
are sustainably available.
 Scheduling delivery of ordered pharmaceuticals
Scheduling depends on
• the in house tender process,
• supplier/manufacturing lead time,
• method of transport,
• length of time for port clearance,
• quality assurance procedures (pre- and post-shipment) and some other possible conditions.
The supplier/manufacturing lead time can vary for each product and must be
monitored as part of supplier performance.
When lead times are underestimated, the likely results are shortages and more
expensive emergency purchases.
 Scheduling delivery of ordered pharmaceuticals
Timely ordering is achieved through efficient pipeline monitoring, which includes
• Monitoring stock balances, in terms of quantities and MOS (aggregate of stock at all levels or
national stock level)
• Comparing stock balances to maximum and minimum stock levels
• Identifying potential pipeline problems (quantities needed, stock-outs, balances below
minimum or above maximum)
Flexible procurement contracts with suppliers are recommended, so that shipment
quantities can be adjusted to respond to
• uptake in services,
• fluctuations in patient demand,
• existing stock levels, and
• rates of consumption of products.
 2.3. Using supply plan

Well-developed supply plan have numerous benefits in facilitating the

establishment of a resilient supply of products.
The benefits are multi-dimensional when considering the involved stakeholders.
Mangers
• To identify the funding needs and gaps for procurement of the required products
• Leverage the sources, amounts, and timing of funding commitments to maximize the use of
available resources
• Advocate for additional resources, when needed
• To monitor and evaluate the process
 Using supply plan
Supply planners
• To coordinate procurements and shipment delivery schedules to ensure a continuous supply
of commodities
• For easily identification specific matters if problems exists
• To communicate with manufacturers and suppliers for timely delivery
Donors
• Will have clear picture of the funding amount
• Recognize the existence of funding gap
• To evaluate whether their funding disbursement meets the right target
• Gives insight where to provide financial or/and technical support
Reviewing and updating the supply planning