The primary distribution management goal is to maintain a steady supply of pharmaceuticals and supplies to facilities where they are needed, while ensuring that resources are being used in the most effective way. Distribution costs, which include costs related to storage and transportation, are a significant component of the expense of running a public health supply system. Transportation costs alone can represent a significant percentage of the value of medicines distributed to remote locations. Designing a system for storing and distributing pharmaceuticals, medical supplies, and equipment is complex and important.
Effective pharmaceutical distribution relies on good system design and good management. A well-designed and well-managed distribution system should -
- Maintain a constant supply of medicines
- Keep medicines in good condition throughout the distribution process
- Minimize medicine losses caused by spoilage and expiry
- Maintain accurate inventory records
- Rationalize medicine storage points
- Use available transportation resources as efficiently and effectively as possible
- Reduce theft and fraud
- Provide information for forecasting medicine needs
- Incorporate a quality assurance program
The distribution cycle begins when pharmaceuticals are dispatched by the manufacturer or supplier. It ends when medicine consumption information is reported back to the procurement unit.
The distribution cycle includes the following steps -
- Port clearing (for imported products)
- Receipt and inspection
- Inventory control
- Requisition of supplies
- Dispensing to patients
- Reporting consumption
Designing a new distribution system or, as is more likely in practice, evaluating and planning improvements to an existing system, requires systematic cost-effectiveness analysis and operational planning. The basic characteristics of a distribution system include its degree of centralization, the number of levels in the system, and the geographic or population coverage.
A distribution system has four major elements -
1. System type (geographic coverage, population coverage, or both; number of levels in the system; push versus pull system; degree of centralization)
2. Information system (inventory control, records and forms, consumption reports, information flow)
3. Storage (selection of sites, building design, materials handling systems, order picking, layout)
4. Delivery (collection versus delivery, in-house versus third party, dedicated or shared arrangements, choice of transport, vehicle procurement, vehicle maintenance, routing and scheduling of deliveries)
Whenever a new system is designed or an existing one is modified, cost analysis (comparing the total costs of using various options) can help ensure that available storage, transport, and human resources are used effectively. After implementation, a program of performance monitoring should ensure that the distribution system works as intended.
Centralized distribution is one option; some countries procure and distribute medicines regionally, and some use commercial supply systems, which often exist in parallel with public systems. Collaboration between private and public systems may occur at any level.
Operational planning and logistics skills are the key to developing a cost-effective and efficient distribution system. It is therefore important to have a logistics management staff composed of qualified professionals.
The steps in planning a distribution system are as follows -
1. Determine whether distribution operations would be carried out most effectively in the public or private sector, or a combination of both
2. Determine whether a push or pull system is to be used
3. Plan store locations and delivery routes - Map the demand for medicines
and estimate future demand based on population growth or program scale-up
- Locate supply entry points
- Rationalize primary storage points
- Plan primary distribution routes and locate new intermediate stores, as necessary
- Plan secondary distribution routes, if necessary
- Size the stores
4. Plan delivery schedules and the required transport infrastructure