Optimal Supply Chain Structure for Distributing Essential Drugs in Low Income Countries: Results from a Randomized Experiment

39 Pages Posted: 28 Mar 2015

See all articles by Monique Vledder

Monique Vledder

World Bank

Jed Friedman

World Bank - Development Research Group (DECRG); World Bank Group

Mirja Sjöblom

World Bank

Thomas Brown

Crown Agents

Prashant Yadav

Harvard Medical School

Date Written: March 1, 2015

Abstract

Despite increased investments in health commodity procurement, the availability of essential medicines at health facilities remains very low in many low and middle income countries. The lack of a well-functioning supply chain for essential medicines is often the cause of this poor availability. Using a randomized experiment conducted in over 400 health facilities and 24 districts in Zambia, this study helps understand the optimal supply chain structure for essential medicines distribution in the public sector in low income countries. It focuses on the availability of 15 essential medicines at the health facility level and compares between a cross-dock based two-tier distribution network and a three-tier network. The study shows that a two-tier “cross-dock” like system out-performs a traditional three-tier drug distribution system due to better information flow and better management accountability even though stock is positioned closer to the health facilities in the three-tier system. Results from the study advance existing knowledge in the area of public sector distribution system design in general and drug distribution systems in developing countries in particular.

Keywords: Supply Chain Management, Global Health, Essential Medicines

Suggested Citation

Vledder, Monique and Friedman, Jed Arnold and Sjöblom, Mirja and Brown, Thomas and Yadav, Prashant, Optimal Supply Chain Structure for Distributing Essential Drugs in Low Income Countries: Results from a Randomized Experiment (March 1, 2015). Ross School of Business Paper No. 1269. Available at SSRN: https://ssrn.com/abstract=2585671 or http://dx.doi.org/10.2139/ssrn.2585671

Monique Vledder (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Jed Arnold Friedman

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

World Bank Group ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Mirja Sjöblom

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Thomas Brown

Crown Agents ( email )

St Nicholas House
Saint Nicholas Road
Sutton, Surrey SM1 1EL
United Kingdom

Prashant Yadav

Harvard Medical School ( email )

25 Shattuck St
Boston, MA 02115
United States

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