Following a management review, the KEMSA Board adopted a new inventory management policy aimed at guaranteeing adherence to optimal stock holding levels, reducing the Authority’s stockholding exposure from Sh14 billion to Sh9 billion in health products and technology (HPT) inventories.
KEMSA Chief Executive Officer (CEO) Terry Ramadhani said the amended policy, which is benchmarked against world-class inventory management methods, is linked with the Ministry of Health’s National Health Products and Technologies Supply Chain Strategy 2020–2025.
According to her, the new policy is part of KEMSA’s three-pronged reforms and corporate transformation, which focuses on operational excellence, customer experience, and repositioning the company.
KEMSA has distributed Sh25.5 billion in Essential Medicines and Medical Supplies (EMMS) and National Health Strategic Programs (NHSP) supplies to over 8,741 health facilities across the country this fiscal year. Following a consignment flag-off witnessed by Governor Prof Kivutha Kibwana, more than 235 health facilities in Makueni County got Sh37.6 million in vital medications from KEMSA last week.
She went on to say that the amended KEMSA Inventory Management strategy would help speed up efforts to turn the central Nairobi Warehouses at Embakasi into a full-fledged National Distribution Centre.
As the Authority strives to decentralize its operations, she said the national distribution center will feed HPT supplies to regional centers in Mombasa and Kisumu.
The Authority has prioritized the automation of several supply chain operations as part of the inventory management policy amendment to increase end-to-end visibility.
“The reforms agenda to firmly position KEMSA as the lead government supply chain agent for HPTs remains firmly on course, and we are happy to celebrate the reduction of the order turnaround time from a high of 46 days in February last year to an average of 12 days as of last month,” Ramadhani said. “These developments have been facilitated by the recent adoption of a revised Inventory Management policy and strict adherence to the key warehouse and logistical processes outlined in the policy.”
KEMSA is also stepping up the use of the framework supply contracts model, allowing for the staggered delivery of supplies as part of the adoption of world-class inventory management practices.
Adopting revised Just in Time (JIT) inventory management procedures, Ramadhani said, will help curb the risk of holding slow-moving stocks that lead to wastage as short shelf-life products expire.
She further added that the Authority has advanced use of Information Technology (IT) systems to support organisational agility and simplify business processes to improve the Order Fill Rate.
KEMSA has made significant progress on this front, with the order turnaround time reducing from 46 days in February 2021 to 12 days at the end of May 2022.
KEMSA recently announced that it had turned a new page in its procurement excellence journey with the formal activation of an automated purchase order generation system.
As part of its transformation journey, which includes integrating information technology systems, KEMSA has unveiled an electronic Local Purchase Order (LPO) generation process.
The automation of the Procurement process and elimination of manual procedures that require human intervention, such as the issuance of LPO, is also part of the Authority’s ethics and integrity assurance strategy.
“Automating the LPO issuance process will ensure that we eliminate the time spent for suppliers to pick the physical copy before making deliveries of medical supplies,” explained Ramadhani. “Such automation also eliminates the need for human intervention, which has been a key organisational integrity risk area,” she added.
“Soon, we will also automate contracting so that suppliers don’t come to KEMSA to sign the contracts, but rather they shall be emailed to them for their perusal and signing before submitting to us. By doing this, we will reduce the delays that occur when the signing parties are not available at the same time,” she assured.
Further, all LPOs will have an expiry date to tame the delays witnessed when suppliers took too long to deliver under open-ended delivery timelines.