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Africa's Public Procurement & Entrepreneurship Research Initiative – APPERI

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Supply Chain Management – turning professional?


The Guardian

The trend for professionalising supply chain management in the private sector is slowly reaching the public sector in Africa but still rarely appears anywhere near the top of development agendas.

The trend for professionalising supply chain management in the private sector is slowly reaching the public sector in Africa but still rarely appears anywhere near the top of development agendas. This despite the fact that, in many developing countries, public procurement accounts for over 50% of GDP, or considerably more where the private sector is small.

Historically, procurement and supply chain management have been undervalued and viewed as a process rather than a professional function. With the realisation that effective supply chain management plays a critical role in ensuring funds are well used, value for money in the delivery of basic services is achieved, and transparency and accountability is assured, the value of professional supply chain management needs to be recognised. How will this happen in countries where procurement is viewed as an “add-on” to other careers?

The wave of legal and institutional reforms to public procurement across Africa over the past few years has certainly focused attention more firmly on the question of capacity building. Many universities are subsequently providing pre-service training in supply chain management which is beginning to instil an early appreciation of the value of the function.

In the health sector, where the issues are more acute, major programmes to combat diseases such as HIV/AIDS and tuberculosis have highlighted the importance of strong procurement and supply chain due to the critical need for regular access to medical supplies. The World Health Organization identifies equitable access to medical products, vaccines and other technologies as one of the six building blocks to a well-functioning health system. The traditional approach to provide expensive in-service supply chain management training to doctors and pharmacists so that they can add this on to their day job is slowly changing but more needs to be done to raise the profile of supply chain management in health institutions.

This trend towards institutional reform in the public procurement sector is not focused solely on health. Procurement training is increasingly available at all levels, from basic introductions to new procurement procedures to academic courses run by universities. Crown Agents has worked with the governments of several African countries to ensure that their procurement capacity building strategies are delivered. Our long expertise in supply chain management and procurement reform and our ability to understand the local environment enable us to work with procurement authorities across Africa. In Ghana for example we helped to develop a whole programme of professional development that covered short, medium and long-term requirements. We partnered with the Institute of Management and Public Administration to implement the short-term plan which was based on training an estimated 25,000 people including procurement staff, tender committees, the private sector and oversight institutions addressing the cross-cutting nature of procurement. We also teamed up with tertiary education institutions to develop the medium and long term training which included a bachelors level degree course in procurement.

Professionalisation is not just about training; it is about transforming the view of the profession itself to ensure a local supply of qualified new recruits in the future. Securing professional accreditation validates and upholds the importance of the supply chain management role. In Botswana for example the Public Procurement and Asset Disposal Board is seeking accreditation of its training materials both nationally and internationally after Crown Agents helped it to develop a series of procurement training modules and completed a training-the-trainers course prior to building capacity in its procuring entities.
Many countries are even establishing their own national professional bodies as membership of international professional institutions such as UK Chartered Institute of Purchasing and Supply and Chartered Institute of Logistics and Transport expands significantly in Africa.
In the health sector there are also a number of initiatives that support the strategic role of supply chain managers. Crown Agents has provided technical support and is an active stakeholder in ‘The People That Deliver’ initiative which promotes workforce excellence in supply chain management.
Building supply chain competence and promoting and valuing supply chain management as a professional career can make a positive impact on a country’s economic development and its people’s lives.

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South Africa’s Department of Health to clamp down on tender system


Political Analysis

October 18th, 2012

Health Minister Aaron Motsoaledi has stated that tender-based procurement for the Department of Health needs to be reduced. It is his contention that these tenders are destroying the public health care system, and proposes that the majority of work should be carried out in-house. It remains to be seen whether or not the tender process will be separated from the healthcare system, and what repercussions might follow such a decision.

South Africa spends relatively more on health care than many other countries, considerably more than the expenditure recommended by the World Health Organization, yet health services are poor, and patient care is on the decline. With the discrepancy between healthcare spending and results being so significant, it is clear that the Department of Health is not performing adequately.

Motsoaledi claims the problem can be attributed to uncontrolled commercialism; the procurement of even basic essentials is deferred to the tender process, drawing out transaction periods and inflating prices at both the private and public level; Discovery Health and various other medical aid agencies have been forced to hike premiums and reduce coverage in efforts to keep up with inflated healthcare costs in the country. According to the annual budget, the Department of Health spent R6 billion of the R121 billion on security companies, further highlighting the peculiarity of the extant procurement process and the transactions that it foresees.

Motsoaledi proposes to cut costs by implementing an employment system that calls for contracts directly between the Department of Health and prospective employees, instead of contracting jobs through tenders to private contractors. The system will include staff training, however, which will itself require contracting to external bodies; without drastic re-imagining, the healthcare system cannot operate without some form of tender procurement being issued.

By internalising skills and resources, and reducing the concentration of tenders in the procurement process, the Department of Health will reap greater returns on transactions characterised by faster turnaround and lower margins for non-value-adding services, thus increasing the yield of productivity per Rand, which will in turn lead to superior healthcare and lower rates across both the private and public markets.

(For further analysis and tailored research, please contact our analysts, analysts@politicalanalysis.co.za)

Indian drug firms target African anti-malarial market


Business Line

P. T. JYOTHI DATTA

Mumbai-February 22, 2012

It was a decision grounded in practical reasons, but Bliss GVS Pharma’s strategy to sell its anti-malarial medicines through retail channels in African countries seems to have worked for it.

It managed to steer away from large players including Indian drug-makers like Cipla and Ipca, active in the global-funds-driven Government tenders market in these countries.

But that is poised to change – the African anti-malarial drugs market is set to get stirred. Bliss is preparing to make a play for the funds-driven segment, and companies like Cipla are eyeing the private, retail market. Africa accounts for over 80 per cent of the global malaria incidence.

Bliss targeted the retail market as its manufacturing facility was old and would not have passed World Health Organisation (WHO) specifications, says Managing Director, Mr S.N. Kamath, rather candidly. Positioning itself in a niche segment, the company targeted 26 African markets, with the exception of Botswana and South Africa, he said.

But over the next six to 12 months, Bliss is targeting the tender-driven market – where the Government sources large volumes from companies that offer medicines at reasonable prices. These Government-run programmes are supported by global funding organisations including UNAIDS, the Gates Foundation and the Global Fund for AIDS, Tuberculosis and Malaria.

With India being home to several manufacturing facilities that meet global regulatory standards, Mr Kamath says, Bliss will tie up with a third-party to manufacture anti-malarials and target the African tender market. About 80 per cent of Bliss’ over Rs 220-crore turnover comes from exports and a lion’s share of that comes from anti-malarials…Read more.

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