Section_J.20_SCMS_PERFORMANCE_MONITORING_PLANS.pdf

SCMS FY13 Annual and 4th Quarter Performance Report

FY13 Q4 July-September 2013

December 4, 2013

About SCMS The Supply Chain Management System (SCMS) was established to enable the unprecedented scale-up of HIV/AIDS prevention, care and treatment programs in the developing world. SCMS procures and distributes essential medicines and health supplies, works to strengthen existing supply chains in the field, and facilitates collaboration and the exchange of information among key donors and other service providers. SCMS is an international team of 16 organizations funded by the US President’s Emergency Plan for AIDS Relief (PEPFAR). The project is managed by the US Agency for International Development.

This document was made possible through support provided by the US Agency for International Development, under the terms of contract number GPO-I-00-05-00032-00. The opinions expressed herein are those of the author(s) and do not necessarily reflect the views of the US Agency for International Development or the US government.

Supply Chain Management System 1616 Ft. Myer Drive, 12th Floor Arlington, VA 22209 USA Telephone: +1-571-227-8600 Fax: +1-571-227-8601 E-mail: scmsinfo@pfscm.org Website: www.scms.pfscm.org

Table of Contents

Executive Summary ....................................................................................................................................... 7-9

Quarterly Performance .............................................................................................................................. 10-18

Goal One: Access .............................................................................................................................. 10-12

Goal Two: Strengthen Systems ......................................................................................................... 13-15

Goal Three: Leadership & Partnership

Goal Four Operational Excellence ................................................................................................... 17-18

Appendix 1: Key Quarterly Statistics ...................................................................................................... 19-23

Appendix 2: Measure Specific Performance

Appendix 3: Progress Against Workplan

Appendix 4: Quarterly Financial Reports

Appendix 5: Risk Matrix. .......................................................................................................................... 27-31

Appendix 6: SCMS Performance Management Plan

Acronyms

ACF Allocated cost factor ACT Artemisinin combination therapies AIDS Acquired Immunodeficiency Syndrome ARVs Antiretrovirals BRC Blended RDC Charge CPP Coordinated Procurement Planning Initiative CDC Centers for Disease Control and Prevention CMS Central Medical Store CPP Coordinated Procurement Planning Initiative DRC Democratic Republic of the Congo ETJ Emergency travel justification FASP Forecasting & Supply Planning FDC Fixed-dose combination HIV Human Immunodeficiency Virus HSS Health systems strengthening HRCD Human resource capacity development LMIS Logistics management information system LOP Life of project MMU Materials Management Unit MOH Ministry of Health MOS Months of stock NSCA National Supply Chain Assessment OTD On-time delivery PFSCM Partnership for Supply Chain Management PEPFAR President’s Emergency Plan for AIDS Relief PMO Project Management Office PMP Performance Management Plan QA Quality assurance RDC Regional distribution center RFP Request for proposal RTK Rapid test kit SOPs Standard operating procedures

STGs Standard treatment guidelines SC Supply chain SSU Systems Strengthening Unit TA Technical assistance TWG Technical working group UNAIDS Joint United Nations Programme on HIV/AIDS USAID United States Agency for International Development VMMC Voluntary medical male circumcision VPP Voluntary Pooled Procurement WHO World Health Organization

Executive Summary

SCMS is pleased to submit the FY13 annual and Q4 quarterly report based on the four goal areas outlined in the SCMS Performance Management Plan (PMP):

• Access

• Strengthen systems

• Leadership and partnership

• Operational excellence

As this is the fourth quarter report, this QPR contains both the quarterly data and the annual performance for all measures. Measures identified for reporting on an annual basis only are represented with a final annual score or presented for the first time in the relevant goal area quarterly performance summaries.

Quarterly performance highlights include:

• Delivered $86.2 million dollars in commodities via 778 shipments during the quarter (page 7).

• Continued focus on the potential impact of new WHO treatment guidelines on supply and demand for Tenofovir-based ARV regimens. In Q4, we worked with donors and in-country stakeholders to mitigate these risks (page 10).

• Conducted the semi-annual client satisfaction survey in Q4. Although response rate remains low, overall client satisfaction is high for both procurement services (88 percent) and technical assistance (96 percent) (page 17).

• The breadth of information for health systems strengthening performance continues to grow as SCMS programs extend to lower levels of the supply chain. Over the course of FY13, the number of sites reporting has increased 89 percent, from 5,106 sites to 9,322 sites (page 13).

• Held the annual Supplier Summit in Johannesburg, South Africa, in September, attended by 165 suppliers. We received positive feedback and more than 9,900 business cards were exchanged (page 16).

• We report the results of the national supply chain assessment (NSCA) in Rwanda and how the data was used to inform the development of a National Pharmaceutical Supply Chain Strategic Plan (page 15).

Key Quarterly Statistics

Key statistics FY13 Q4 Annual Performance Life of Project

Value of commodities delivered $86.2 million delivered

$333.2 million delivered

$1.61 billion delivered

Number of deliveries 778 deliveries 3,139 deliveries 16,515 deliveries

Countries receiving shipments 25 countries 35 countries 57 countries

Percent generic ARVs by volume 99% 99% 95%

Counterfeit products detected 0 counterfeits 0 counterfeits 0 counterfeits

FY13 Q4 Performance

Goal One: Access

Goal Two: Strengthen Systems Objective Measure Target

(Interim) FY13 Q1 FY13 Q2 FY13 Q3 FY13 Q4 Annual Performance

2.1 Capacity &

Capability

2.1.1a Strategic Plans 50% Annual Measure 33% 2.1.1b FASP Country Ownership 75% Annual Measure 50% 2.1.1c SOPs 80% Annual Measure 66%

2.1.2 Competency 80% 41% 82% 86% 76% 71%

2.1.3 Supply Chain

Assessment: CMM Score

60% Botswana 54.9% Rwanda 49.5% Namibia 52.0%

2.2 Performance

2.2.1 Supply Chain

Performance: In-country

1. Facility Reporting Rates

80% 74% 79% 79% 77% 77%

1. Expiry 1% 0.22% 0.10% 0.25% 0.66% 0.22%

1. On-time

Delivery 75% 64.3% 84.3% 93% 86% 87%*

1. Stockout 5% 13% 7% 11% 8% 10%

Rate

1. Order Fill

Rate 80% 91.2% 133% 97% 71% 107%*

2.2.2 Supply Chain

Assessment: KPI Score

60% Botswana 72.0% Rwanda 69.0% Namibia 76.0%

Goal Three: Leadership & Partnership

Goal Four: Operational Excellence

Quarterly Performance

Goal 1: Access Provide quality HIV/AIDS commodities efficiently and effectively.

SCMS met or exceeded all of our Access goal annual performance targets in FY13 with the exception of forecast accuracy. With overall performance of 62 percent, forecast accuracy is within the tolerance band of the 70 percent interim target. Interim targets were set without baseline data, and SCMS will review them prior to FY14 Q1 reporting.

Key Results and Challenges

• Tensions between supplier capability and increasing demand for Tenofovir triple fixed-dose combinations continue to be a top priority for SCMS. We drafted an Excel-based tool for USAID’s use to help donors and countries plan and coordinate transition to Tenofovir-based regimens. Manufacturers are increasing production, but SCMS expects supply to remain tight for the next 12 to 18 months.

• Tanzania (35 percent) and Uganda (33 percent) accounted for a significant proportion of emergency orders in FY13 Q4. Both countries have struggled with updating supply plans throughout FY13, and many orders have had short lead-time horizons. Of note, the Government of Uganda has taken ownership of forecasting and supply planning, limiting SCMS’s influence on the completion of timely, accurate supply plan updates and orders.

• During the quarter, SCMS began placing VMMC orders with its expanded base of suppliers from the RFP process, but delivery timelines are longer than originally expected. The first shipments are expected to be available for pickup by the end of 2013, with estimated delivery to the Kenya and South Africa RDCs by February 2014. Based on current projections of demand, we do not anticipate this will cause shortages of VMMC kits, but it will continue to put additional pressure on existing suppliers through February.

• In DRC, UPS agreed to contract with a different freight forwarding agent, GTM, following several months of fruitless attempts to improve the service delivery performance of the existing freight forwarding agent, GTS. GTM has a larger in-country operation and is better positioned to meet the customs clearance and timely delivery requirements of the SCMS program. The change is part of the overall effort to reduce the risk of theft of test kits and other commodities by what is believed to be an organized crime syndicate.

• Throughout the quarter, Alere had problems with Acouns, its local Determine test kit importer in Nigeria. Acouns, who holds the license to sell Determine test kits in Nigeria, froze importation of the product as a negotiation tactic to increase the price. These issues partially contributed to the rapid test kit on-time delivery drop in August (59 percent). Alere successfully addressed these issues with Acouns and by September, supply of rapid test kits to Nigeria resumed with no price increase and on-time delivery rebounded to 88 percent.

Key Issues

Update on FY13 Key Issues and Corrective Actions

Key Issues Corrective Actions Progress Quarter Identified

Delays in triple TDF supply.

Close cooperation with clients and vendors to determine priorities and ensure uninterrupted supply to all.

Demand continues to exceed supply, and introduction of the WHO treatment guidelines by countries is expected to further challenge approved manufactures to meet demand and deliver in a timely manner.

SCMS continues to work with stakeholders to address this issue, including aligning VPP/SCMS strategies.

Q2

Delays at largest VMMC kit supplier, Priontex.

Diversify order base using identified new suppliers to place VMMC kit orders.

In Q4, SCMS began placing orders with several suppliers identified in the RFP process.

SCMS expects supply and demand tensions to alleviate in

FY14 Q2.

Q3

Lack of adequate number of essential medicine vendors.

Evaluate RFP 13-08 and pre-screen additional vendors for direct procurement.

Updates to be provided in FY14 Q1.

Q4

High volume of emergency and unplanned orders in

TZ.

Work with TZ FO to ensure quarterly supply plans are updated, reliable and used for active country-level procurement.

Updates to be provided in FY14 Q1.

Q4

Key Risks

• Theft in DRC is a continued risk. The freight forwarding transition from GTS to GTM — as well as continued implementation of anti-theft measures, such as non-descript packaging and anti-theft tape — will help SCMS mitigate this risk.

• Vendor on-time delivery (VOTD) challenges potentially impact SCMS’s overall client on-time delivery. To mitigate this risk, we plan to continue our carrot-and-stick approach, using VOTD evaluation criteria as well as lengthening the order lead-time horizon by placing orders further in advance.

• An insufficient number of essential medicine suppliers continues to pose a risk to the supply of this product category to SCMS clients. In response, we issued RFP 13-08 in Q4 to seek additional essential medicine suppliers that are WHO pre-qualified.

Goal 2: Strengthen Systems Strengthen supply chains to increase access to quality HIV/AIDS commodities.

This quarter marks the end of the first year reporting on health systems strengthening (HSS) measures that illustrate the impact of SCMS field support programs. These measures provide insight into a large wealth of data regarding the project’s impact on the HIV/AIDS supply chains in the countries where SCMS operates, across 9,322 sites at all levels of the supply chain.

In Q3, SCMS set interim targets using limited or no baseline data for each measure. SCMS fell short of our interim targets for several of the measures for the strengthen systems goal area, although the key measures of expiry, on-time delivery, order fill rate and national supply chain performance exceeded their targets. In partnership with the USAID COR team, SCMS will undertake a strategic review of these targets based on the first year of baseline data including the development of final targets and tolerance bands for each measure.

Objective Measure Target (Interim) FY13 Q1 FY13 Q2 FY13 Q3 FY13 Q4 Annual Performance

2.1 Capacity &

Capability

2.1.1a Strategic Plans 50% Annual Measure 33% 2.1.1b FASP Country Ownership 75% Annual Measure 50% 2.1.1c SOPs 80% Annual Measure 66%

2.1.2 Competency 80% 41% 82% 86% 76% 71%

2.1.3 Supply Chain

Assessment: CMM Score

60% Botswana 54.9% Rwanda 49.5% Namibia 52.0%

2.2 Performance

2.2.1 Supply Chain

Performance: In-country

2. Facility Reporting Rates

80% 74% 79% 79% 77% 77%

2. Expiry 1% 0.22% 0.10% 0.25% 0.66% 0.22%

2. On-time

Delivery 75% 64.3% 84.3% 93% 86% 87%*

2. Stockout

Rate 5% 13% 7% 11% 8% 10%

2. Order Fill

Rate 80% 91.2% 133% 97% 71% 107%*

2.2.2 Supply Chain

Assessment: KPI Score

60% Botswana 72.0% Rwanda 69.0% Namibia 76.0%

*OTD calculation does not include first quarter data due to measure definition update in Q2.

*Order fill rate is 107% due to oversupply in Mozambique.

• Zambia experienced several ARV stockouts throughout Q4, including a month-long stockout of

Truvada (TDF/FTC 300/200 mg, 30 tabs) due to slow implementation of transitioning patients to the preferred first-line TDF/FTC/EFV fixed dose combination product. While significant efforts have been made by MoH and implementing partners to speed up the transition demand for Truvada remained consistently high over the last year. The MOH, in collaboration with SCMS and USAID|DELIVER PROJECT, put into place multiple interventions to mitigate impact to clients, including clinical solutions and alteration of dispensing practices to send patients home with a one-month supply of Truvada instead of the typical three months. SCMS delivered an emergency order of 0.8 months of stock in August, with a secondary shipment due in mid-October that will cover an additional 2.5 months of stock.

• In Guyana, SCMS developed recommendations for the MOH to outsource all supply chain operations for essential medicines to a third-party supply chain service provider. These recommendations included a draft proposal, budget proposal, facilitation of a meeting between the Minister of Health and the USAID Mission Director, and development of a decision paper for consideration by the Government of Guyana’s (GOG) Presidential Cabinet. In September, the Presidential Cabinet approved the outsourced management proposal, marking a major victory, as this is the best chance for sustaining the GOG’s commitment to providing universal, uninterrupted access to quality medicine for all citizens.

• In Namibia, a dormant incinerator at Intermediate Hospital Katutura (IHK), procured by SCMS, was adversely mentioned in the lead story of the July 29, 2013, issue of the Republiken newspaper. SCMS assessed that the incinerator, idle because of the lack of a waste water treatment system, had operational and possible design flaws that needed to be addressed. We have arranged for an engineer from Alfa-Therm, the incinerator manufacturer, to visit in October to address these issues.

• In Nigeria, the unification of the national HIV/AIDS supply chain continues to expand, increasing from 1,200 to 3,027 supported sites over the course of Q4. The number of facilities receiving monitoring and supportive visits increased to 367, and distribution of HIV/AIDS commodities expanded to 1,678 facilities in 23 different states. The unification project also implemented a variety of technical and strategic support throughout the quarter, including LMIS cluster review meetings, strategy development for state-level engagement and training.

• In Q4, SCMS implemented the National Supply Chain Assessment in Rwanda in collaboration with in-country stakeholders. Eighteen MOH employees participated in the assessment, which included a statistically significant sample of 145 sites at all levels of the supply chain. Assessment results were used to guide the development of a five-year strategic plan for the national pharmaceutical supply chain. The strategic planning workshop, which included 33 MOH staff, formulated six strategic objectives and 32 strategic interventions that will drive the Rwanda supply chain forward to becoming a high-performing, integrated system.

Key Issues Corrective Actions Progress Quarter

Identified Competency tests not passed by trainees.

HRCD advisor to work with Country Directors to undertake in-depth root cause analysis of issues passing competency test in ET and HT.

New training definition/framework completed with HRCD TWG and implemented in FY13 Q4 reporting.

Root cause analysis now to be conducted in FY 14 Q1.

Q2

CI: Delays in reporting. Fundamental review of supervision process and outsourced transportation planned for June.

Since Q2, SCMS has contracted with the third-party company ITL to conduct distribution of commodities on seven routes, and this is now ongoing. SCMS is also supporting GF and the PR, PNPEC, in contracting ITL to distribute commodities on 10 routes. On the supervision process, SCMS is now conducting the decentralized supply chain project and working at site level to provide better coaching and supervision to improve quality and timeliness of reporting.

Q2

CI: Transportation delays. Award of contract to an outsourced transporter expected in June.

Complete. Q2

MOH has not prioritized leadership of SC activities

(GY, HT, NG).

Determining National supply chain strategic plan.

Work with champions in MOH/CMAM to develop, change and transfer skills (GY, HT, MZ).

Completed in GY and MZ. HT still outstanding.

Q3

Policy changes, such as months of dispensed stock at SDPs (BW) and testing algorithms (ZW), affected facility management of stock.

Advocate earlier alignment between policy changes and SC via performance communications with national counterparts (BW, ZW).

BW: Completed and performance improved significantly.

ZW: Conversations are ongoing with national counterparts.

Q3

Distribution delays to lower levels.

RW: Share active distribution challenges as part of strategic planning.

CI: Project initiated, monitor results.

RW: Results of the NSCA, including OTD challenges, disseminated at the strategic planning workshop.

Recommendations for improved transportation capability included in the strategic plan.

CI: Contract has since been signed with ITL for distribution on seven routes. This is now ongoing.

Q3

Lack of forecasting and supply planning country ownership due to staffing and commitment levels of MOH(s).

Continue to advocate for creation of LMUs and supply chain champions within counterparts.

Work with HRCD TWG to identify additional activities to drive and increase ownership.

Updates to be provided in FY14 Q1.

Q4

Systemic performance issues at lower-level facilities in CI.

Implement decentralization project activities and recruit staff to expand supervision to

Updates to be provided in FY14 Q1.

lower levels of the supply chain.

• The capability levels of in-country counterparts create potential risk to SCMS’s ability to transition ownership of supply chain management as the project enters its final years. SCMS will continue to support counterparts to help ensure turnover of key supply chain activities between now and the end of the project. SCMS is also working with the project transition manager and respective in-country counterparts to develop concrete strategies for transition of ownership.

• Continued decentralization of SCMS program support deeper into in-country supply chains potentially impacts the performance of the HSS measures within the strengthen systems goal area as the number of sites reporting at lower levels of the supply chain increases. SCMS anticipates that these facility-level sites will have lower performance than the central, regional or district level sites, which may lead to varying performance for the HSS measures. SCMS will accept this risk as part of the expansion of the SCMS in-country programs and identify these changes in subsequent quarters where relevant.

Goal 3: Leadership and Partnership Collaborate with key constituencies to strengthen health supply chains and encourage the adoption of best practices.

SCMS met or exceeded almost all of our performance targets in the leadership and partnership goal area, with only the publication of papers by SCMS falling short of its target at three (instead of four) published articles.

• In July, the WHO published “WHO Policy Brief: Transition to New HIV/AIDS Treatment

Regimens–Procurement and Supply Chain Management Issues,” which had been substantially drafted by SCMS.

• In September, SCMS held the second annual Supplier Summit in South Africa, with a total attendance of 200, including 165 suppliers. Initial feedback from participants was very positive, with particular highlights being our keynote speaker (Euvin Naidoo), speed networking, the field trip to the SCMS regional distribution center and the final day’s discussion on market dynamics.

• Interest in the NSCA from external stakeholders continues to grow. During the quarter:

– Gave a comprehensive presentation on NSCA to Global Fund, which is considering using

NSCA in its own supply chain reviews key component of its grant approvals process.

– The WHO Good Governance for Medicines Model Framework 2012 is reviewing our approach to the enabling environment for possible inclusion in its own tool.

– SIAPS and Harvard University School of Public Health Initiative are reviewing the applicability of the NSCA “upstream indicators” for their work.

Key Issues Corrective Actions Progress Quarter Identified

N/A

Key Risk

• None

Goal 4: Operational Excellence Operate an organization that provides best-value supply chain and system strengthening services.

SCMS met or exceeded all of our performance targets for operational excellence, with the exception of the submission of technical assistance concurrence requests within three weeks of travel.

Although there is significant work to be done to reach the 80 percent target, the performance trend has improved markedly from 8 percent in FY13 Q1 to 56 percent in FY13 Q4.

• SCMS implemented the client satisfaction survey in Q4 with an overall client satisfaction rate of 89% for procurement services and 96% for technical assistance. Response rate continues to be a challenge at around 35% (65 responses) although the 21 countries were accounted for by these respondents. Moving forward SCMS will continue to review the client satisfaction survey process to improve timeliness and utility.

• Timely submission of concurrence requests continued to be an issue into Q4, although performance improved to 56 percent, an 11 percent increase over Q3. Despite this positive performance trend, 41 emergency travel justifications (ETJ) were submitted during the quarter.

Key Issues Corrective Actions Progress Quarter Introduced

Two countries, RW and TZ, provided low scores in response to the client satisfaction survey.

Review STTA with country support team to identify issues and corrective actions.

Complete. Q2

High number of countries did not respond to the customer satisfaction survey in Q2.

Review cause of low response rate and develop plan to improve in the Q4 implementation.

While we received responses from clients in more countries in the Q4 survey, overall response rates are still low. Further analysis will be conducted in FY14 Q1.

Q2

High volume of concurrence requests requiring ETJs continues.

Use the new AD/UD code system to analyze primary cause of delayed submission of concurrence requests.

Using this analysis, SCMS will work on a program to push field offices to adhere to the 11 week lead time for beginning TA requests.

Updates to be provided in FY14 Q1.

• None

Appendix 1:

Key Quarterly Statistics

I. Value Delivered

In the quarter, SCMS delivered $86.2 million in commodities to our clients the highest quarterly value this year, including $47.9 million in ARVs and $16.3 million in lab products. Overall, ARVs have the highest value of procurements at $186.4 million, 56 percent of the procurement value for the year. Labs have the second highest value at $70.2 million, 21 percent of the procurement value for the year.

July-Sept 2013 FY13 Life of Project ARVs 47,965,041.02$ 186,385,361$ 959,574,473$ Test Kits 8,406,791.05$ 30,938,143$ 157,537,517$ Labs 16,305,415.40$ 70,244,350$ 331,601,935$ Essential Drugs (OIs 6,084,740.63$ 17,350,102$ 74,908,178$ Anti-malarial 16,164.00$ 398,221$ 1,106,149$ Food by Prescriptio 826,534.31$ 7,486,738$ 19,737,021$ Male Circumcision 4,016,552.24$ 11,894,414$ 25,291,736$ Other 2,616,501.46$ 9,138,512$ 38,871,302$ Grand Total 86,237,740$ 333,835,842$ 1,608,628,311$

Value Delivered

*This graph illustrates the value delivered by product category for the current quarter, fiscal year and life of the project.

*This graph illustrates the percentage of value delivered by product category for the current quarter. The “other” category includes anti-malarials, food by prescription, male circumcision and other.

For the fourth consecutive quarter, Nigeria accounted for the largest portion of the value delivered, with $14.1 million of the $86.2 million total for FY13 Q4. Uganda, Zambia, Mozambique and

Tanzania also had large value delivered. Combined with Nigeria, these five countries accounted for 60 percent of the value of deliveries for the quarter.

*This graph illustrates the value delivered by country for the current quarter. Each color illustrates a product category, which is detailed in the legend. Countries receiving less than $100,000 worth of deliveries during the quarter are not included in the graph.

II. On-time Delivery (OTD)

On-time delivery declined slightly to 76 percent for FY13 Q4, from 81 percent in FY13 Q3. SCMS has held OTD within 3 percent of the proposed target for the last nine quarters, ensuring clients receive their deliveries within 14 days of the promised date. Vendor on-time delivery improved, increasing from 79 percent in FY13 Q3 to 80 percent in FY13 Q4. Vendor on-time delivery performance for FY13 remains strong at 79 percent.

*This graph illustrates client on-time delivery for all product categories by month for the past 12 months. Per the legend, the dark blue illustrates the percentage of deliveries that meet the OTD target. The light blue highlights the additional percentage of those that are delivered within 15 to 30 days of target. The red background illustrates the number of deliveries per month, labeled on the right axis. The yellow trend line illustrates the vendor on-time delivery rate for each month.

Throughout the quarter, several product categories experienced challenges with on-time delivery, including essential medicines (“drug” in the chart below), which declined from 76 percent in July to 67 percent in August, and test kits, which had a sharp decline in August at 59 percent, but rebounded in September to 88 percent.

*This graph illustrates on-time delivery by product category for each month of the current quarter. The number on the bottom of each bar represents the number of shipments.

III. Freight

Ocean freight continues to make up the majority of SCMS shipment tonnage. In FY13 Q3, ocean freight was at a record high of 87 percent, and other quarters performed well above the 50 percent target.

*This graph illustrates the volume (tonnage) of shipments by each transportation method (ocean, air and road) by quarter. Each color represents a different mode of transportation.

IV. Forward Orders

New Orders Placed from July to September 2013 Grand Total $183.9 million Direct Drop Total $88.3 million RDC Stock Total $95.6 million Order Categories

ARV $130.1 million DRUG $3.7 million TEST KITS $7.2 million LAB $28.6 million OTHER $8.1 million MC $6.2 million

Appendix 2: Performance by Measure

Measure specific performance updates will be provided in a separate attachment each quarter, sent at the same time as this report.

Appendix 3: Progress Against the Workplan

Project-wide workplan progress updates will be provided in a separate attachment each quarter, which we anticipate being able to forward to you by December, 10, 2013 or earlier.

Appendix 4: Quarterly Financial Reports

In view of the confidential nature of the financial details, this report will be provided under cover of a separate email sent coincident with this report.

Appendix 5: Risk Matrix Risk # Quarter

Identified Associated

Measure Risk Probability Impact Response Option Mitigating Actions Owner

1 Q2 2.1.2

Competency & Training

Lack of standardization of what defines competency across countries

High Medium Mitigate Review of competency levels across countries Greg Miles

2 Q2 2.2.1 In Country Performance

Côte d’Ivoire-Global Fund transportation contract delay High High Mitigate Close collaboration with

GFATM, PEPFAR and PR Alan Pringle

Q3 1.1.1 Product

Loss Shipping & Storage

Theft of commodities in the

DRC

High High Mitigate Nondescript packaging, antitheft tape. Antitheft measures, local source.

Procurement

4 Q3

1.2.1 Recipient

Stock Out Rates Stock levels drop below required level, could lead to stockouts

Medium High Mitigate Quarterly updates of SPs to monitor stock levels Chris Larson

Robert Burn

5 Q3 1.2.2 OTD

Delays at largest manufacturer of MC kits (Priontex)

High High Mitigate Orders with 4 new vendors have been placed for RDC shipments, with estimated delivery of Nov-Dec 2013

Juan Jaramillo

6 Q3 1.2.2 OTD Haiti field office continues to have staffing concerns

High High Mitigate Work to hire and train new staff

Phoebe Kenney

7 Q3 1.2.2 OTD

Alere is having contract disputes with its Nigeria distributor Acouns. Issue remains unresolved at this time.

High High Mitigate We are alerting the country team that Nigeria may need to look for alternative HIV kits until this is resolved

Peter Smith

8 Q3 2.1.1 Country Ownership

Quantity of peopled trained vs.

impact of that training

Medium High Mitigate Advocacy for accountability with withdrawal strategy

Erin Hasselberg

9 Q3 2.1.1 Country Ownership

Ability to transition current SCMS responsibilities to countries effectively

Medium High Mitigate Advocacy for accountability with withdrawal strategy Erin Hasselberg

10 Q3 2.1.2 Training & Competency

Supportive supervision declining, reduces ability to have OJT impact

Medium High Mitigate Advocate for more supportive supervision

Country Directors

11 Q3 2.1.3 CMM & 2.2.

KPI

Workplan incorporation of

NSCA

Medium Medium Mitigate Work with missions and field offices

Field Office &

SSU

12 Q3

2.2.1 Supply

Chain

Performance

SCMS-

Supported

Switch to WHO regimen guidelines

Medium High Mitigate Develop TDF forecast tool to share with countries and donor organizations Chris Larson

Risk # Quarter Identified

Associated Measure Risk Probability Impact Response

Option Mitigating Actions Owner

13 Q3

3.1.1 Number of

CPP At Risk Schedule

Submission

External (Steering Committee decisions)

Low Medium Accept Frequent consultation with SC members Dominique

Zwinkels

14 Q3

3.1.1 Number of

CPP At Risk Schedule

Submission

External (Countries/CPP members providing data and information)

Medium Medium Mitigate Ongoing consultative process of CPP value Dominique

Zwinkels

15 Q3 3.2.1 Publishing Risk that articles in progress will not be published by target deadline.

Medium High Accept Continue to push authors to submit and speed editing of those submitted

Jay Heavner

16 Q3 4.1.1b Cost Effective:

Surcharge

Surcharge does not remain within target due to low volume of sales or unproportionate operating costs

Medium High Mitigate Increase volume of commodity sales and/or decrease operating costs Katrina

17 Q3 4.1.1c Cost Effective: ACF

ACF does not remain within target due to lower-than-expected country budgets or higher operating costs

Medium High Mitigate Maintain country activities per extension budget or decrease operating costs

Katrina

18 Q3 4.1.3 Ocean Freight

Lack of supply planning and emergency orders can limit the use of ocean freight. In addition, shortages of warehouse space at high-ocean-volume destinations of ET and ZM can delay delivery of ocean shipments and negatively skew results.

Medium High Avoid

Monitor supply plans against actual orders to see if lack of compliance resulted in use of premium air transportation. Continue to work with SCMS field office staff to improve coordination of ocean deliveries to ET and ZM.

F&L, Demand Planning and

ET/ZM

Field Office

Staffs

19 Q3

4.3.1a Operational Performance Management:

Contractor Reviews

Not completing reviews by 9/30

Low High Avoid Contractual requirement monitored by Contracts Unit. Visits to be scheduled by 9/30.

Afua Ofosu- Barko

20 Q3

4.3.1b Operational Performance Management:

TA Processed on-time

ETJ becomes routine travel request process

High Low Avoid

Signatories need to do root cause analysis at time of receipt Deputy Director

21 Q4 1.1.1 Product Theft of goods in Kinshasa High High Mitigate Antitheft measures, local F&L and

Loss Shipping & Storage source.

Nondescript packaging, antitheft tape

Procurement Units

22 Q4

1.2.1 Recipient

Stock Out Rates

SCMS

Accountable

In country stock levels drop below required level

Medium High Mitigate Emergency orders, Qrtly updates of SPs to monitor stock levels

Chris Larson, Robert Burn

23 Q4 1.2.2a OTD Core Products

VMMC kit production capacity at PrionTex

High High Mitigate Biweekly phone calls to update del. sch.

Juan Jaramillo

24 Q4 1.2.2a OTD Core Products

VMMC waiver delay for Kenya

RDC

High High Mitigate Establish new doc.

procedure

Juan Jaramillo / Ed Nagle

25 Q4 1.2.2a OTD Core Products

Lack of adequate EM sources for direct procurement

High Medium Mitigate Surge capacity dossiers review

Chryste Best/ Henk den Besten

26 Q4 1.2.2a OTD Core Products

Lack of adequate number of vendors (EM)

High High Mitigate Multi Vendor follow up on

RFP

Chryste Best/ Henk den Besten

27 Q4 1.2.2a OTD Core Products

Lack of import waiver leading to un- availability of product

High Medium Mitigate FO’s to work with MOH to secure waivers

Henk den Besten

28 Q4 1.2.2a OTD Core Products

Increasing demands for Tenofovir 3FDC

High High Mitigate Align VPP/SCMS strategy to balance supply/demand

Ard van Dongen

29 Q4 1.2.2a OTD Core Products

Low VOTD impacts overall

COTD (ARVS & EM)

High High Mitigate Continued vendor management implementation

Ard Van Dongen/ Henk den Besten

30 Q4 1.2.3c On-time PQ Turnaround

VMMC Kits

Price Requests placed in the system before funding is available

Medium Medium Mitigate Monitor PRs in the system on a biweekly basis and request PR recall until funding is available

Juan Jaramillo

31 Q4

1.3.1 Pharmaceutical

Product Sampling

Sample collection from Cameroon and Dominican Republic

Medium Medium Mitigate Continue to work with NFO manager for solution.

Mohammed Jinnah/Irma Karsten

32 Q4

1.4.1 Planned, Unplanned, Emergency

Orders

In country stock levels drop below required level

Medium High Mitigate Emergency orders, Qrtly updates of SPs to monitor stock levels

Chris Larson, Robert Burn

33 Q4 2.1.1 Country Ownership

Ability to effectively transition supply chain management to countries

Medium High Mitigate Engage transition manager on project strategy for transfer of responsibilities

Alan Pringle

34 Q4 2.1.2

Competency (Training)

Task shifting in MOH contributing to misalignment of resource with SC tech objectives

High High Mitigate Review and consider additional training strategies

Erin Hasselberg

35 Q4 2.1.3 NSCA

CMM Score

Insufficient preparation and buy in from in-country stakeholders

Medium High Mitigate Develop checklist to ensure adequate preparation complete with external stakeholder tool utilization

Kate Bartram, Melissa

Levenger

36 Q4 2.1.3 NSCA

CMM Score

Competency of teams applying the tool

Medium High Mitigate Develop revised suggestions for core competencies of staff involved in NSCA. Train additional staff to conduct

NSCA.

Kate Bartram, Melissa

Levenger

37 Q4

2.2.1 Supply

Chain

Performance

(SCMS

Supported)

Increasing number of SCMS-supported sites could impact performance (ZW, NG, MZ)

High High Observe Accept N/A

38 Q4

3.1.2 CPP

Country-at risk schedule submission

Steering Committee decisions negatively impact program

Low Medium Accept Frequent consultation with SC members

Dominique Zwinkels

39 Q4

3.1.2 CPP

Country-at risk schedule submission

Countries/CPP members providing data and information failure to provide data

Medium Medium Mitigate Ongoing consultative process of CPP value

Dominique Zwinkels

40 Q4 4.1.1a Cost

Effective: Expiry & BRC Reporting

Stock loss due to expiry Medium Low Mitigate Actively work to place short dated stocks with clients who can use then in normal order flow.

Actively pursue donation options from RDCs for short dated stocks

Chris Larson

41 Q4 4.1.3 ARV Price Comparison

Supplier leaves market limiting available products Low High Mitigate Stimulate Competition Ron Marrocco

42 Q4

4.3.1a Operational Performance Management:

Partner Review

Not following up on CAPA Low Medium Mitigate Establishing a Task Master to follow up on all CAPAs

Afua Ofosu- Barko

Appendix 6: SCMS Performance Management Plan

The SCMS quarterly performance report is based on the SCMS Performance Management Plan (PMP). Use the link below to access this reference document.

SCMS Project Team Booz Allen Hamilton | Crown Agents USA, Inc. | i+solutions | JSI Research & Training Institute, Inc. | Management Sciences for Health | The Manoff Group MAP International | North-West University | Northrop Grumman | PHD | UPS Supply Chain Solutions | Voxiva | 3i Infotech

Quarterly Performance Report

July – September 2012

November 15, 2012

November 2012 | 2

Table of Contents

1. Project Highlights

2. Programmatic Milestones and Measure

3. Procurement and Distribution Statistics

4. Country Reports

Botswana Burundi Côte d’Ivoire Ethiopia Guyana Haiti Kenya Latin America Mozambique Namibia Nigeria Rwanda South Africa Swaziland Tanzania Uganda Vietnam Zambia Zimbabwe

5. Innovations

6. Appendix: Project Performance Indicators

November 2012 | 3

1. Project Highlights This summary covers project achievements, challenges and issues to monitor, grouped into the three main project activities as per the Task Order: Global Supply Chain, Health Systems Strengthening and Global Collaborations. The remainder of the report gives more detail on programmatic milestones (Section 2, page 10), procurement and distribution statistics (Section 3, page 28), progress in countries (Section 4, page 33), innovations (Section 5, page 62) and objectives for the coming quarter (Section 6, page 65). The programmatic milestones in Section 2 and objectives in Section 6 are taken from the project workplans provided to USAID.

This quarter contained three significant events for the project. In July, SCMS was well represented at the International AIDS Society Conference, which returned to Washington, DC, after a gap of 20 years, with many consortium member companies funding the attendance of their staff. Five SCMS abstracts were accepted for presentation, with two verbal presentations on keeping supply chains operational at time of civil unrest in Côte d’Ivoire in 2011 and on human resource capacity development, specifically working with professional training institutions to include supply chain modules in curricula.

USAID/PFSCM jointly sponsored a highly successful and very well-attended satellite session on the supply chain challenges posed by the 15 by 15 challenge to have 15 million people on ART by 2015.

With speakers from USAID, PAHO, CHAI, Mylan Pharmaceuticals, Alere Diagnostics and the Zimbabwe Ministry of Health, the session drew well over 100 people, with standing room only as the meeting commenced.

Also in July, USAID advised PFSCM of an extension to the project to September 2015 and requested PFSCM to produce a new Task Order 3 Budget extended to this new date. PFSCM duly delivered the budget proposal to USAID as requested, with detailed discussions continuing as of the end of the quarter.

In September, the SCMS Vendor Summit held in Dar es Salaam, Tanzania, was the first such summit to include all product categories (the previous summit focused on ARV vendors) and the first to be held in Africa. It also included freight and logistics subcontractors from Africa. In total, some 200 representatives of suppliers from Africa, the Americas, Asia and Europe attended.

Participant feedback was very positive, citing the inclusiveness of the event and the opportunities to share concerns and suggestions and to network. Our primary intent with the summit was to further improve health outcomes through enhanced supplier relationships. This primary goal was achieved, and participant responses to our summit evaluation survey lead us to believe the summit could make a significant contribution toward creating a sustainable supply chain within the private sector in Sub- Saharan Africa.

Key statistics for the life of the project, from October 2005 as of September 2012, are as follows:

• $1,264 million in products delivered to clients, accounting for 12,652 deliveries.

• 54 countries received shipments of HIV/AIDS commodities.

• 98 percent of ARVs (by volume) delivered by SCMS from October 2011 to September 2012 were generics.

• 35 countries received technical assistance in such areas as quantification, warehousing and distribution, laboratory logistics, quality assurance and management information systems (MIS).

November 2012 | 4

• 780 technical assistance assignments completed.

• Three state-of-the-art regional distribution centers (RDCs) are operational in Ghana, Kenya and South Africa.

• No counterfeit products detected in the SCMS global supply chain.

1a. Global Supply Chain

The global supply chain performed strongly during the period, delivering $86 million worth of commodities via 682 shipments to clients. On-time delivery dipped very slightly during the quarter to 79 percent of deliveries within 14 days of the promised delivery date, from 80 percent in the previous quarter. However, on-time performance for the year was directly on the Performance Work Statement of 80 percent within 14 days of the promised delivery date.

Successes:

• Attended the Joint PEPFAR-WHO Meeting on Accelerating the Scale-Up of VMMC for HIV

Prevention in East and Southern Africa. This significant planning meeting facilitated discussions and agreements on country-level and overall programmatic goals. We expect USAID country missions to finalize their individual program targets for 2013 as a result of this working meeting.

We are also establishing a stockpile of strategic VMMC products in addition to VMMC kits.

• In Malawi, although not a country where SCMS maintains an office, PEPRFAR via USAID is providing about $7.5 million for procurement of ARVs to cover a treatment program funding gap as the country transitions from Stavudine to Tenofovir (Tenofovir/Lamivudine/Efavirenz).

PEPFAR has committed to supply around 500,000 units via the SCMS mechanism, while the Global Fund (GF) will supply around 3.4 million units through the VPP mechanism. After this, the Global Fund is likely to continue funding.

• In Tanzania, seven pharmaceutical importers were inspected to determine if their systems and facilities were suitable to temporarily store imported products to be distributed through the SCMS Prime Vendor project. All seven were found suitable for this activity.

• In Zimbabwe, received the first-ever DFID-funded and SCMS-procured ARV shipment, 60,794 bottles of Nevirapine 200 mg tabs worth $147,121. In March, DFID Zimbabwe awarded a contract worth over $28 million to SCMS through USAID for procurement of adult and pediatric ARVs over a four-year period (2012-2015).

Challenges:

• Throughout the quarter, we experienced delays and clearance backlogs on containers imported to Ethiopia. At the end of September, there were 16 containers awaiting delivery, 11 of which were Plumpy Nut. SCMS has been working closely with our client, the Pharmaceutical Fund and Supply Agency (PFSA), to address this issue.

• We have seen an uptick in emergency orders from a number of countries, including Haiti, Rwanda and Uganda. This will be reported more thoroughly in the six-month report on stockouts and emergency orders due by the end of the calendar year.

• Orders for VMMC kits have continued to grow, and production at the most reliable VMMC disposable kit manufacturer (Priontex in South Africa) is quickly reaching its maximum. SCMS is actively seeking to prequalify additional VMMC kit suppliers.

November 2012 | 5

• Vendors and manufacturers have reported that Cotrimoxazole tablets may not be available until December due to a shortage of the active pharmaceutical ingredient (API) Sulfamethoxazole.

This shortage is a result of several factors, including pollution control problems and labor conflicts at the API site of key manufacturer Virchow. These issues have recently been addressed and API production has resumed. Fortunately, only one order for SCMS clients has been impacted by this constraint.

Things to watch:

• The Global Fund sent a team from Geneva to Nigeria to discuss collaboration and integration with SCMS in-country activities. Highlights of the meeting included discussions on including GF-supported facilities in SCMS rapid test kit procurement starting in January 2013, ongoing discussions with the GF board about using PFSCM’s Voluntary Pooled Procurement mechanism for ARV procurement for the National Agency for the Control of AIDS, and GF’s consideration of collaborating with SCMS on the warehouse upgrade at CMS Oshodi.

• The growth of the VMMC program has required SCMS to hold buffer stocks of VMMC kits and accompanying commodities. SCMS set up bond storage facilities in South Africa and applied to the Medicines Control Council (MCC) for approval to extend these facilities to include VMMC pharmaceutical products. MCC approved, and we are currently confirming whether the extension includes all OI drugs.

• We are monitoring how closely the transfer from Stavudine-based to Tenofovir- and

Zidovudine-based regimens matches the assumptions used to prepare forecasts of ARV requirements. A slower transfer than modeled will require further Stavudine formulation procurements in the future, which are not planned currently.

1b. Health Systems Strengthening

Successes:

• SCMS opened two new field offices in Burundi and the Democratic Republic of Congo.

• In Botswana, the new CMS Deputy Manager, Operations, arrived, completing the transition for all six SCMS management team positions.

• In Ethiopia, established a supply chain cost model that PFSA can use to maintain and update information on operating costs to run its business. This enables PFSA to effectively determine the revenue streams required to sustain its business.

• In Swaziland, as per agreement with the Mission and PSI, SCMS completed a full handover of supply chain activities to PSI by the deadline of September 28, complete with supporting documents that will assist PSI after SCMS leaves the country.

• Three significant events in Tanzania: The EPICOR E9 software, MSD’s new enterprise resource planning (ERP) tool, is now live. Pre-go-live activities included completing data cleaning and migration plans, defining and allocating carton and pallet locations, and allotting products to the set categories. MSD senior management has been very supportive in providing the necessary approvals and has been keenly monitoring progress. In a second major deliverable, we handed over the state-of-the-art prefabricated warehouse-in-a-box (WIB) facility in Mbeya zonal MSD at a formal ceremony in Mbeya region. This is the second of three planned WIB facilities under Phase One. At 3,378 square meters, this new facility will greatly expand storage space and includes modern gravity flow technology for enhancing picking and packing. And finally, SCMS

November 2012 | 6 is processing an order to supply the UK Department for International Development (DFID) with essential medicines under the prime vendor model for use in care and treatment sites in Tanzania.

• In Nigeria, the effect of last-mile delivery of commodities to service delivery points by SCMS under the supply chain unification initiative has started to bear fruit, as demonstrated by gradual improvement in commodity availability at the facility level (reflected in the LMIS). Prior to the unification activities, facilities were not being resupplied every two months. By September all facilities were being supplied on time with required commodities.

Challenges:

• In Ethiopia, installation of hematology and chemistry lab machines supplied by SCMS by vendors at selected health facilities is delayed. One problem is the absence of power supply outlets where these machines are to be installed. SCMS is working to procure electrical equipment that fits the power supply system of these facilities. Also contributing to the delay are vendors’ capacity limitation and the difficulty of finding professionals trained in installing these lab machines in the local market. SCMS is negotiating with vendors on the possibility of arranging a TOT for lab professionals.

• In August, MOHSW Tanzania, through the Medical Stores Department (MSD), suspended all distribution of Triomune-30 (T-30) procured with GOT and Global Fund funding due to alerts of the existence of counterfeit products in some regions. The Tanzania Food and Drugs Authority (TFDA) conducted product quality assurance monitoring to assess the gravity of the problem. The problem was subsequently isolated to specific batches. No SCMS products were concerned and we are monitoring the position in case emergency supply is required.

• In Haiti, SCMS has not yet received 2013 targets from CDC/USAID and the Global Fund to finalize the…