Ask the Expert - Challenges of Covid-19 on Supply Chains

Health Procurement Africa experts discuss the key challenges faced by procurement and supply chain professionals and the situation post coronavirus, in this informative webinar and the two documents available to download, below. Within the webinar, there is an opportunity where YOUR questions are answered by the experts. If you'd like any more information on when the Ask the Expert surgery is open or about any of the topics that are discussed, get in touch with your community manager to find out more. 

Ask the Expert - Challenges of Covid-19 on Supply Chains Q&A

Q 1 - How can we ensure we get best quality of PPEs, ventilators etc. from suppliers since companies are shifting to manufactures items they never manufactured before?

A - The key point here is to follow your organisation’s Quality Policies. This is true for any procurement process you will conduct, whether items have been procured before or not. As part of a Quality Policy, a procurement organization or department will request the following:

• Company’s Quality Assurance (QA) and Quality Management System (QMS): Ask suppliers to provide information on their QA and QMS. You could ask an ISO 9001 certificate from the suppliers and their manufacturers, for instance. For this type of items, suppliers and manufacturers tend to be certified. The items must meet international basic safety standards, which may be prescribed by organizations such as the World Health Organization (WHO). If procuring locally, you may ask for an equivalent certificate from national authorities. At the very least, the suppliers should be able to submit some information about how they manage quality at the level of their company.
• Product Certification: Ask suppliers and/or manufacturers to provide information on their product. You could ask for an ISO certification for the specific product e.g.: ISO 22609:2004 - Clothing for protection against infectious agents — Medical face masks — Test method for resistance against penetration by synthetic blood (fixed volume, horizontally projected) - https://www.iso.org/standard/35055.html In the case of pharmaceutical or medical diagnostics you may demand for FDA (Food and Drug Administration) certification if being imported from or manufactured in the US or by US manufacturers or CE Certification if from EU.
• Laboratory tests: Ask suppliers to send sample that you can test in a laboratory (either your organization’s internal laboratory or an independent laboratory). The test is usually pre-defined by the laboratory and follows a robust evaluation methodology and criteria. It is usually recognized internationally or nationally. If a new test has to be defined, it should be established by an expert. The laboratory will perform tests based on samples sent by suppliers and will evaluate whether the product is passing or failing the test, with a report summarizing the results. It is important to inform suppliers about the laboratory testing to make sure they can prepare samples, and ensure the right quality is delivered.
• Quality Control: It can be easy for suppliers to provide a sample of quality that will be different from the mass produced items. Therefore it can be relevant to perform some quality control tests during production e.g. every 200 items produced, a product is sent to an independent laboratory or a laboratory onsite to be tested and should pass the test criteria.
• Pre-shipment inspection: If you are procuring for a high risk and high value contract, it can be relevant to perform pre-shipment inspections to ensure the manufacturers produced the right quality, according to specifications and laboratory test results.
• Acceptance of the goods/inspection: It is always a golden rule to inspect the goods upon receipt before proceeding to their acceptance. In case some goods are damaged or not produced to the right quality, the procuring agent can refuse the goods and ask for replacement.
• Local Standards : for PPEs and ventilators ensure they also meet local standards even if manufactured outside the country by subjecting them to local quality tests
• Contract management to manage poor quality: Ensure your contracts have clauses on quality, with the possibility of financial penalties/liquidated damages, replacement of the goods at the expense of suppliers. Replacements during this Corona Virus may not be practical for imported products .This is why pre-shipment inspection would be ideal.
• Warranty: Make sure the goods are under warranty of at least 12 months, and more if necessary. You may request for a warranty extension either a supplier’s cost or at your cost, to ensure you mitigate your risks.

Q 2 - Most local markets are unable to meet needs, as highlighted by the speaker the quality of goods by people who don't have experience in production of such specialized health goods may be wanting.

A - The countries’ local standard organizations must approve of such productions to ensure the safety of the patients, users and frontline health workers.

Q 3 - What do we do when we are procuring using grant funds that specify which manufacturers we must procure from?

A - This is common in donor funded organizations. However, the manufacturers may not have all the requirements of the grant recipient. In this case the recipient may seek waivers to procure from suppliers other than those approved by the donors or granters. Such waivers will have to be approved by the donors or their representatives. The challenge is when, for example, the recipient has procured a “closed” diagnostic equipment specified by the donor meaning the equipment can only utilize reagents from the specific manufacturer of the equipment. Many countries are experiencing this kind of problems because of the shortages of reagents for Corona Virus testing, since the manufacturers cannot cope with the demand. The situation gets worse when the equipment breaks down and the solution lies with an Engineer based out of the country and cannot travel due to travel restrictions. Organizations are better advised to invest in more “open” systems to provide flexibility in both testing and maintenance. After- sales training for local technicians/Engineers must be a provision in the contracts.

Q 4 - Best practice in Tanzania the manufacturing of protective gears for COVID-19 has been assigned to the military bases. It is now going very fine and prices have extremely gone down. The government is now working on ensuring Sanitizer is again manufactured locally at the lowest price. Public Private Partnership is now being worked to ensure it is attained by July 2020. COVID 19 has brought in innovation and creativity.

A - Agree. Public-Private Partnerships can ensure that markets are not distorted during a time of crisis and ensure a speedy crisis recovery by containing market price increases or delivery deadlines. It can support a return to “normal” conditions or business as usual. The governments can leverage the innovation and expertise of the private sector. However, health PPPs must be carefully crafted to ensure mutual benefit and outcome. They are usually long-term in nature and are not necessarily the magic wands.

Q 5 - Is supply chain and procurement supposed to be less than one category mainly in Public sector?

A - Usually in Public Sector, the Procurement function will fall under a broader Supply Chain function.

Procurement is defined as the process of getting the goods and/or services your organisations needs to fulfil its mandate or business model. The procurement process involves several activities such as developing needs and specifications, defining standards of quality, tendering, negotiating prices, financing purchases, buying goods, inventory control, and the disposal of products. Procurement stops once your organisation is in possession of the goods.

Supply Chain is broader and includes Quality Control, Marketing, Procurement, Sourcing, Logistics, and Networks. Supply chain is about getting your product into the hands of a customer or end user. This process involves raw material suppliers or manufacturers, transportation (Freight Forwarders etc.), warehousing, product life-cycle management, in-house staff, stock workers, customer service management, etc.

The supply chain is the entire process, while procurement is a part of it.

Share your new knowledge with the HPA Community on Discuss