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MTTN45 Humanitarian Logistics Sourcing and Procurement Nonprofit Organizations shaping the Market of Supplies 12 April PowerPoint Presentation
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MTTN45 Humanitarian Logistics Sourcing and Procurement Nonprofit Organizations shaping the Market of Supplies 12 April 2013. Content. Purchasing power in the humanitarian sector Impact of purchasing power on purchasing strategies The case of vaccine procurement

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slide1

MTTN45 Humanitarian Logistics Sourcing and Procurement Nonprofit Organizations shaping the Market of Supplies12 April 2013

content
Content
  • Purchasing power in the humanitarian sector
  • Impact of purchasing power on purchasing strategies
  • The case of vaccine procurement
  • Nonprofit organizations shaping their supply market
nonprofit for profit relationship
Nonprofit-for profit relationship
  • The disdain history
  • The mutual need of collaboration

More relationships, collaboration, and dependencies

distribution of power resource dependency theory
Distribution of Power: Resource Dependency Theory

Resource dependency theory (RDT)

  • Focus on core competencies  outsourcing
  • Exchange relationships  dependence
  • Power as relative dependence more influence

All organizations strive to maximize their power through reformulating these dependencies.

issue of power dominance in procurement
Issue of power dominance in procurement
  • Understand its power position
  • Move toward more favorable position

Buyer power attributes relative to supplier

Buyer dominance

Interdependence

Supplier dominance

Independence

Supplier power attributes relative to buyer

(Cox et al. 2000: 18)

what are drivers of purchasing power
What are drivers of purchasing power?
  • Substitutability
  • Interconnections
  • Demand share
  • Information symmetry
  • Reputation
slide8

What does the humanitarian sector look like?

Humanitarian logistics

  • Added stakeholders with conflicting incentives
  • Shared management and need for collaboration
  • Lack of funding
  • Lack of infrastructure and local capacities

Based on pre-study data

Based on OECD (2011) data

Based on WEF(2010) data

what does the humanitarian sector look like
What does the humanitarian sector look like?
  • The disdain nature of nonprofit (NPO)-for profit relationship
  • Scarcity of supplies

“The products may not always be commercially attractive, nor the market transparent. Manufacturers are often not aware of the needs, or may consider the risks associated with entering the market too high.” (UNICEF, 2008)

  • The essentiality of supplies
  • The limited buying power
purchasing power s impact on purchasing
Purchasing power’s impact on purchasing
  • How do you think low purchasing power impacts purchasing decisions and strategies?
      • Accept the situation and be weak
        • Few suppliers with high prices in country X. Gather funds and buy from
      • Accept the situation and safeguard
        • Few suppliers with high prices in country X. Have a detailed and strict contract so terms are set for a longer time
      • Understand the situation and try to change it
        • Few suppliers with high prices in country X. Insource, invest in developing more suppliers maybe local
delivery of health in humanitarian aid supply chains
Delivery of health in humanitarian aid supply chains

Global health SCM

  • Health a reflection of development and poverty reduction (UN, 2011)
  • Nature of disease: geographical, weather, culture, social, educational, economic
  • The public good nature of the related products
  • Higher weight of quality
  • High donor dependency (viewed as a global good)
  • Different purchase profiles among countries

Based on WEF(2010) data

overview of vaccine scs for developing countries
Overview of vaccine SCs for developing countries
  • Subset of global health SCs
  • Willingness of governments to pay
  • Epidemiological justifications
  • Under valued by governments and market
  • Some differences between industrial and emerging
  • Concentrated supply market
  • Emerging economy producers increasing
  • Procurement being considered a main issue in shortage
slide14
A schematic view of the positioning of different actors along the vaccine chain in humanitarian networks
so power is shifted to the suppliers
So power is shifted to the suppliers
  • What are different ways buyers (e.g. different governments and organizations) can buy vaccines the best way in this situation?
slide18
Several countries which have completely outsourced their purchase to humanitarian organizations (process and funding)
npo initiatives in shaping the market of supplies
NPO initiatives in shaping the market of supplies

GAVI’s consolidation of demand for vaccines secure supply (Gavi, 2009: 16)

Price drop of Pentavalent (GAVI, 2009: 16)