Addressing Procurement Bottlenecks: A Review of Procurement Bottlenecks in Public Sector Medicine Supply Chains and Practical Approaches Taken to Resolve Them. (August 2013, USAID | DELIVER PROJECT, Task Order 4)
(2013; 62 pages)

Abstract

Recently, attention has focused on improving the performance of the procurement processes in public sector supply chains. Inefficiencies that have resulted from procurement bottlenecks are well documented. In contrast, this report documents the successes in overcoming procurement bottlenecks, in particular, those that occur at the first mile of the procurement cycle (planning and budgeting; purchasing activity; contract management) of public sector supply chains for medicine. It presents a set of 14 short case studies from various developing countries that illustrate successful strategies that may help stakeholders and concerned parties in other countries solve their own procurement bottlenecks. While this report includes high-level government and international development community interventions, its value-added feature is what the practitioners have done to unblock specific procurement bottlenecks in their environment. A first mile supply process usually takes place at the central level; however, in this age of decentralization, it often takes place at lower levels, or at both levels, based on threshold spending limits. Thus, the report draws from first mile experiences at lower levels, as well as from the central level, based on the individual country situation.

This report includes information gathered from three main sources: telephone interviews, an extensive literature search, and interview records. The report’s main feature is a set of 14 short case studies that show the positive results from interventions addressing procurement bottlenecks.

An analysis of background material reveals that many common first mile bottlenecks occur during the purchasing activity phase of the three-part procurement cycle (purchasing activity, supply planning, and contract management). However, these bottlenecks more often result from issues and activities that occur outside the purchasing office’s control. Therefore, it is necessary to address the procurement environment where the work takes place, as well as the technical process.

By analyzing the set of short case studies, clusters of bottleneck and resolution action themes were identified. The most prevalent bottlenecks were persistent problems with access to funds, transparency and corruption, and quality concerns; while resolution actions resulted from civil society engagement and stakeholder intervention. Champions (a person or group that monitored the problem and pushed for resolution) were critical factors in every case; almost half the success stories involved action based on information gathered by or provided to the champions.1 Knowledge of the procurement environment and access to reliable information were key tools to address bottlenecks. Findings from a recent, extensive Brookings Institute study (Griffin, de Ferranti, and Tolmie 2010) validated the conclusions from this analysis.

Building on the USAID | DELIVER PROJECT’s 2008 Bangladesh reports (Bates 2008; Dickens 2008), the present report looks deeper into the premise that the procurement environment has at least as much influence on the outcome as the knowledge and skill of the procurement personnel. Capacity development, an important aspect of development effectiveness thinking, is the subject of massive efforts by several organizations in the development community. However, capacity development is considered a long-term approach that must take place in tandem with wider public administration reforms, both within and outside the health sector.

This report concludes with a section called Additional Resources; it includes a list of organizations, information, and tools that individuals and organizations can access to improve their procurement skills and knowledge.

 
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