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CLICK TO ADD TITLE. The 5th Global Health Supply Chain Summit November 14 -16, 2012 Kigali, Rwanda. Risks in Health Supply Chains: Simple Solutions Prof. Yehuda Bassok University of Southern California And Center for Health Education and Research (CHEaR) . [SPEAKERS NAMES]. [DATE].

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The 5th Global Health Supply Chain Summit

November 14 -16, 2012Kigali, Rwanda

Risks in Health Supply Chains: Simple Solutions

Prof. Yehuda Bassok

University of Southern California

And

Center for Health Education and Research (CHEaR)

[SPEAKERS NAMES]

[DATE]


What is CHEaR?

A group of people in academia that is dedicated to provide training in Health Care Supply Chains.


What is risk?

  • Risk

    • The negative effects of uncertainty on objectives.

      • In this definition, uncertainties include events (which may or not happen). Some times we know the probability of these events

      • Uncertainties caused by ambiguity or a lack of information.

  • There are two ingredients that are needed for risk to exist:

    • Uncertainty about the potential outcomes.

    • The outcomes have to matter in terms of providing utility.

  • Example: Demand Risk

    • Demand for a new drug

      • Events: 1. The demand will be 1M tablets per year

        2. The demand will be 0.5M tablets per year

        3. The demand will be 0.25M tab per ear


What is risk (cont.)

  • How many units should be ordered?

    • Notice that whatever we do one of two things may happen:

      • Shortages

      • Excess inventory

  • Demand risk affects not only the countries

  • It also affects the pharmaceutical, who might be reluctant to develop and produce drugs for LMIC


Example of Demand Risk


Types of Risk

  • Example: Supply Risk

    • An order for 1m units is placed but only 0.5m units are delivered.

    • Goods are not of the quality desired

  • How many units should be ordered

    • Perhaps 2 million units

  • Example: Funding Risk

    • Donors promise to provide the funding to purchase a certain quantity of a drug and they renege on their promise.


What are the effects of risks?

  • Who suffers from risks?

    • The patients

    • The donors

    • The countries

    • The pharmaceuticals


What can be done?

  • Risk is part of life.

  • There are methods to reduce risk.

  • There are methods to reduce the outcome of risk.

  • Reduce risk

    • Better data to better forecast the demand

      • What is a good forecast?

      • Partial shipments reduce wastage of drugs

        • Example: Country makes a commitment to an annual purchase of a drug.

        • Drug is delivered every three month for a total of the annual order.

        • What are the advantages of such an approach?

          • Expiration date is delayed and wastage is eliminated


What can be done?

  • Make long term commitments with some flexibility

  • Example:


  • Safety stock

    • How to calculate safety stock?

  • Safety time

    • Order early enough


Thank You


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