Managing Commodity Stock-outs in Public Health Supply Chains in Developing Countries: An Empirical Analysis

Forthcoming at Production and Operations Management

43 Pages Posted: 20 Apr 2021

See all articles by Amir Karimi

Amir Karimi

Alvarez College of Business, The University of Texas at San Antonio

Anant Mishra

University of Minnesota - Twin Cities - Carlson School of Management

Karthik V. Natarajan

University of Minnesota - Twin Cities - Carlson School of Management

Kingshuk Kanti Sinha

University of Minnesota - Twin Cities - Carlson School of Management

Date Written: April 15, 2021

Abstract

Public health supply chains are channels through which health commodities are distributed among end-clients. In developing countries, significant resource constraints hamper the effective and efficient delivery of health commodities, leading to supply chain failures such as “stock-outs.” While the prevalence of commodity stock-outs is well-acknowledged, there is little by way of systematic and rigorous empirical research that sheds light on the factors that drive such stock-outs in developing countries. The study documented in this paper is anchored in the “logistics cycle” framework that is well-accepted and widely adopted by organizations involved in managing public health supply chains. Using this framework, we empirically investigate how commodity range and a health facility’s logistics management information system (LMIS) practices impact the likelihood of stock-outs. We estimate our models using a novel field dataset spanning 4,000 health facilities across five developing countries. Our results indicate that the likelihood of stock-outs increases with an expansion in the range of health commodities offered through the public health supply chain. However, the detrimental impact of offering a wider range of health commodities is more severe in resource-constrained rural facilities relative to their urban counterparts. Further, we find that urban facilities can significantly reduce the likelihood of stock-outs by updating their LMIS records on a daily basis. However, in rural facilities, daily LMIS updating is beneficial only when used in conjunction with an electronic LMIS. Our findings have implications for resource allocation to reduce the risk of health commodity stock-outs in developing countries.

Keywords: public health supply chains; commodity stock-outs; developing countries; empirical methods

Suggested Citation

Karimi, Amir and Mishra, Anant and V. Natarajan, Karthik and Sinha, Kingshuk Kanti, Managing Commodity Stock-outs in Public Health Supply Chains in Developing Countries: An Empirical Analysis (April 15, 2021). Forthcoming at Production and Operations Management, Available at SSRN: https://ssrn.com/abstract=3827291

Amir Karimi (Contact Author)

Alvarez College of Business, The University of Texas at San Antonio ( email )

ONE UTSA Circle
San Antonio, TX 78249
United States

Anant Mishra

University of Minnesota - Twin Cities - Carlson School of Management ( email )

19th Avenue South
Minneapolis, MN 55455
United States

Karthik V. Natarajan

University of Minnesota - Twin Cities - Carlson School of Management ( email )

19th Avenue South
Minneapolis, MN 55455
United States

Kingshuk Kanti Sinha

University of Minnesota - Twin Cities - Carlson School of Management ( email )

19th Avenue South
Minneapolis, MN 55455
United States

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