Public-private partnerships- Where can companies contribute?

Like the private sector, many not-for-profit organizations are involved in supply chain logistics, aiming to get needed products to their clients as efficiently as possible.  In emerging markets such as Tanzania, streamlining in-country supply chain can be a complicated undertaking. Many not-for profit organizations are acknowledging that their supply chain capability and capacity, while a key undertaking for their operations, is not where it should be.   In February and March I spent six weeks on the ground in Tanzania assessing supply chains in the not-for-profit sector, ranging from medical supplies to social products (e.g. water tablets and condoms). I was trying to answer the key questions:  Where are the key supply chain challenges and how can the private sector assists?

The “last mile of logistics” – In the emerging markets where I work, I often hear the central excuse of poor infrastructure to describe sub-optimal performance. In reality the situation is far more complex. Far too often a lack of systems and routines are the main culprits for programs failing to deliver.  Systems are visible up to certain level (e.g. distribution to a district warehouse) with the “last mile of logistics” not clear or often ad hoc. Effective distribution of medical supplies to dispensaries and health clinics, for example, requires detailed planning, territory design and mapping. Too often, distribution to service points (e.g. dispensaries) is plagued by bottlenecks and poor product and information flow. The private sector is by no means perfect, but it can play a major part in assisting organizations in the design and implementation of the required systems in this “last mile of logistics”.

Transportation challenges – working with Third Party (3PL) and Fourth Party (4PL) logistics companies are increasingly becoming an important business strategy for success. Many public sector companies are still in the early stages of 3PL and some are ignoring 3PL and 4PL completely, to their peril. The private sector can play an important part in this regard. During my visit it became apparent that some organizations need to look “beyond the Landcruiser” as a delivery vehicle. Vehicle configuration is critical part of cost effective distribution and the increased availability of other more cost effective means of distribution (e.g. motorbikes) in Africa makes alternatives a viable option.

Assessments –The not-for-profit sector sometimes lacks the require resources, capacity and capability required to conduct detailed assessments of their operations.  Companies often use internal assessments and audits that could be adapted with little effort to evaluate the public sector’s route-to-market and supply chain systems.  Such a technical exchange need not just be viewed as corporate social responsibility.  Private sector project teams can gain valuable insight and learnings from the market that can be used in their operations and industry.

Technology challenges – The private sector can also be a vital technology partner. A good example in Tanzania is the “SMS for Life” project. Novartis has teamed up with Roll Back Malaria, Vodafone and IBM to design and implement a system focused on everyday SMS technology.  The system aims to eliminate stock-outs, improve ordering and to increase visibility in the supply chain.

Procurement challenges – Large multinationals have the required expertise in the system to draw on when it comes to equipment (e.g. forklift) purchases.  Not-for-profit organizations are often isolated from such knowledge and sometimes procure the wrong equipment for the job.  During my site visits I noted such challenges (e.g. the need for narrow aisle forklifts) and a number of interviewees stated that they would like to receive input from the private sector regarding the procurement of operational equipment.

Channel & dealer insights –Deciding on the right distribution strategy for social products such as condoms can be a challenging undertaking. For instance, not all distributors will distribute to all channels (e.g. nightclubs) and some might make use of a multi-channel strategy (purchasing from more than one channel or distributor) because of relationship and category mix (e.g. other products).  For not-for-profit organizations, conducting detailed research can be an expensive undertaking and often their operations are more geared for social marketing than logistics and Route-to-Market. In such cases, some consumer goods companies that already conduct detailed consumer and dealer research might assist with vital channel and market insight using data that are already available in their system.

Capability training – Consumer goods companies have invested heavily in business skills training for their distributors and outlet base. The same business skills training can benefit the public sector’s partners such as health clinic and dispensary workers who also require basic business skills to conduct their business effectively.

Supply chain council– The private sector can also take a leading role in establishing an in-country supply chain council. Councils are great ways to share knowledge and learn from fellow council members. Council events can includes site visits, workshops and key note speakers from industry leaders. During my visit in Tanzania a number of private and public partners expressed an interest in a supply chain council.

The role of public-private partnerships is evolving and there are a number of areas where companies can contribute, make an impact and at the same time gain valuable market and operational insight for their own operations.

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